NAIROBI, Aug 19 (Reuters) - In eight years of working as a taxi driver in Kenya's capital, Judith Chepkwony has never seen business this bad.

A bruising price war between ride-hailing companies Uber Technologies (UBER.N), Estonia's Bolt and local start-ups Little and Faras has driven fares down to a level that many drivers say is unsustainable, forcing them to set their own higher rates. "Most of us have these cars on loan and the cost of living has risen," Chepkwony told Reuters. "I try to convince the customers to agree to the higher rates. If they can't pay, we cancel and let them find another driver."

About half the passengers who get in touch eventually agree to pay more than the price flashing up on their app generated by the companies' algorithms, Chepkwony said, keeping her going.

But Uber has said such arrangements break its guidelines and told its drivers to get back into line, setting up a clash between the slick, automated world of the international ride-hailing industry