On demand companies in Kenya are finding it difficult to scale their businesses due to licensing requirements that fall out of step with innovation, industry players have said.

Legislation has impacted significantly on operations of bus hailing services Swvl and Little Shuttle.

Little Shuttle was forced to shut down its services in late 2019 following a series of back and forth exchanges with the National Transport Safety Authority (NTSA) which insisted that the company did not have the requisite license to operate.

Swvl has also been targeted by the regulator over similar claims. The NTSA said that the company lacked proper public service vehicle (PSV) license. They also want the firm to have proper route licenses from the county government.

According to media reports, Swvl is currently pursuing compliance from the regulator.

Glovo, a service that allows users to order for 'anything' and have it delivered using motorbike riders as delivery agents, is also facing challenges.

General Manager for Glovo Kenya William Benthall said that they are losing revenue due to the licensing structures from government and county governments.

He said that the company's agents require a license to operate in Nairobi central business district. These licenses expire with a new calendar year, so at the tail end of the year, riders look to delay renewal – and this impacts the business' bottom line.

"We have seen the challenges in the shuttle space and ride hailing and there are some consultations taking place," Bentall said.