Uber launched in Johannesburg, South Africa in 2013 with the aim of bringing the company’s disruptive technology to the potentially lucrative African market.
The taxi-hailing mobile app is now available in 15 cities in six sub-Saharan African countries, including Nigeria, Kenya, Tanzania, Uganda and Ghana. But Uber’s takeover of the African market has not always been a smooth ride, as the firm has faced regulation and labour disputes, technical challenges, passenger security issues and protests – sometimes violent – in the countries of operation.
The company has also faced accusation that the drivers that work for the company are underpaid and their jobs are too insecure. But, despite the difficult operating environment, Alon Lits, general manager of sub-Saharan Africa at Uber, believes that the company and its army of drivers still has a bright future in Africa.
“Driver-partners across the continent are excited about what Uber has to offer. It’s not just about creating economic opportunities for individuals, it’s about helping driver-partners build their own small businesses,” he says. “We are really excited about the opportunities in Africa, there is so much potential in this continent.”
“Africa constitutes a melting pot of rapid infrastructural development, rich cultural diversity and burgeoning entrepreneurship. With some of the fastest growing cities in the world, African cities present very real challenges when it comes to congestion.
“We have found the African region to be defined by agility, creativity and adaptability. This provides Uber with the perfect conditions to launch and nurture our on-demand economy in partnership with local governments and existing businesses. Africa is already home to some of the most congested cities anywhere, with places in South Africa, Nigeria and Kenya suffering suffocating traffic yet there are comparatively few cars on the continent’s roads yet.
“This is why Africa is such an exciting opportunity. There is the potential for Africa to decrease traffic congestion and for people to move around the continent in a more time efficient, productive manner, while reducing carbon emissions.”
Uber now has around 60,000 driver-partners across Africa and has plans to continue expanding to new markets as mobile device adoption surges across the continent. The number of mobile internet subscribers in Africa has increased threefold since 2011 to reach over 300m unique users, according to the mobile operators’ trade body GSMA. An additional 250m subscribers are expected by 2020.
Meanwhile, Africa’s population in urban areas – where Uber’s app is available – is set to double to nearly 6.3bn in 2050, which will put a huge constraint on infrastructure, especially transport. This forecasted challenge is an opportunity for Uber to utilise its business model to ease city congestion, according to Lits.
“Uber encourages more efficient use of existing public transportation infrastructures and sees the future less about car ownership and more about car-sharing as smart cities look for smarter solutions to increase mobility while reducing congestion which means fewer cars on the road, fewer emissions and less time wasted sitting in traffic,” he says. “Car-sharing can also reduce infrastructure costs and environmental impacts. Uber has made it affordable and more efficient for riders to get around their cities.”
But, while Lits views Uber’s disruptive technology as an opportunity to respond to some of Africa’s challenges, many in the continent see the firm as a threat to the normal order.
Africa’s unique challenges
Uber’s introduction has been controversial especially with traditional taxi drivers who see the app and its legion of drivers as a threat to their livelihoods. In many cities across the continent, customers prefer to use Uber because they view it as a safer and cheaper option to get around.
However, taxi drivers believe that the firm is undercutting their operations, and the friction even led to violent attacks last year in Nairobi, where two Uber cars were attacked and set alight, and in Johannesburg, where an Uber car was stoned. They have called on their respective governments to regulate the Uber service so it reflects what they see as real market prices.
But Lits is quick to defend the company’s practices: “The competition that Uber has introduced has also encouraged innovation by existing platforms. Taxis across the continent are now using ‘e-hail’ apps to dispatch taxis in a more intelligent manner.
“Our technology is open and pro-choice and we are keen to offer it to a broad number of taxi driver-partners to boost their occupancy rates and chances for profit. In fact, many taxi driver-partners across Africa are already using our technology to boost their incomes and we would welcome more who wish to join their colleagues.”
Regulation is welcome
As for the introduction of tighter regulations, Lits welcomes the opportunity to work with the various governments in each country to develop equitable rules that help push the sector forward.
“Uber is pro-regulation, and we have been working closely with regulators to help shape the future of e-hailing,” he says. “In fact, competition authorities around the world have been among the first government agencies to come out in support of innovative transportation platforms.
“Many regulators across Africa have been positive about Uber’s technology and the benefits we bring to riders, driver-partners and cities. While Uber has been engaging with government since the outset in South Africa, the introduction of a new licensing category in May 2016 – specifically for people using apps like Uber – was a huge step forward in supporting licensed, professional driver-partners.
“A month later, Nigeria’s House of Representatives became the first national government in Africa to unanimously vote in support of a resolution embracing ride-sharing. And in that same month, we signed a statement of understanding with the Ghanaian Ministry of Transport, which officially welcomed us on our launch in Accra, while the prime minister of Uganda heralded our opening in Kampala and the many economic opportunities we could create.”
Only time will tell if the company’s attempts to placate its critics will be effective. In the meantime, Uber’s success in Africa has led to other app developers, including some local ones, to move into the market.
Competition is good for everyone
Since Uber entered the African market, several challengers – such as Estonian-headquartered Taxify, Saudi Arabia-based taxi service Mondo Ride and Nigeria’s Afro – have entered the market. The new players do not currently threaten Uber’s dominance in Africa, but the competition is a good thing for the customer and the sector, according to Lits.
“Competition and choice mean we all have to up our game, and constantly innovate to improve our service and quality. We believe our customers should be allowed more choice in the way they travel, and more choice that’s affordable. Our focus is on reliability, flexibility and opportunity,” he says. “Uber offers riders a new option. In a basic sense, giving riders one more choice can only make them better off.”
But the future remains positive for Uber because it remains the main player in many African markets, and the company hopes to continue its expansion across the continent.
“Uber’s ambition is to be everywhere – any progressive, forward-thinking city that has a need for safe, reliable and efficient transportation,” he says. “We want to be there. We are part of a broader mobility movement, establishing smart cities of the future and we are currently exploring our options of where to go next.”