Uber Fighting On All Fronts In Africa As New Competitors Emerge
Since its first venture into Africa in Johannesburg in 2013, Uber has expanded across the continent, launching in another 15 cities across eight African nations.
It has also been working on innovative new products in Africa. Its on-demand food delivery service, UberEats, is available in Johannesburg and Cape Town, while the company is also offering drivers new ways of funding their vehicles and real-time ID checks via selfies.
It has not had things all its own way, however. As with elsewhere in the world, traditional taxi companies and drivers have reacted strongly against Uber. Taxi drivers in South Africa protested by blocking roads to the Johannesburg airport early last month, while there have been attacks on drivers in Nairobi.
Uber says there’s enough room in African markets for all types of taxi and ride-hailing services. Samantha Allenberg, head of communications for Uber in Africa, told AFKInsider the company feels the issue should be “Uber and Taxi,” not “Uber or Taxi.”
“Uber is an open and non-exclusive application service working with existing operators,” she said. “Our technology is open and pro-choice and we are keen to offer it to a broad number of taxi drivers to boost their occupancy rates and chances for profit.
“In fact many taxi drivers across Africa are already using our technology to boost their incomes and we would welcome more who wish to join their colleagues.”
Working with governments on regulation
Uber has been working with African governments to ensure regulation moves with the times. It was engaged with the South African government from the beginning on introducing a new licensing category. Nigeria’s House of Representatives became the first national government in Africa to unanimously vote in support of a resolution embracing ride sharing.
Uber signed a Statement of Understanding with the Ghanaian Ministry of Transport, which officially welcomed it on its launch in Accra. Meanwhile, the prime minister of Uganda heralded Uber’s opening in Kampala and the economic opportunities it could create.
“Regulation should ensure competition and maximise consumer welfare,” Allenberg said. “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.”
Competition mounts to Uber in Africa
Uber in its early days headed off the challenge of Easy Taxi, Snappcab and Zapacab in Kenya and South Africa. Now new competitors have entered the ring. Zebra Cabs has raised US$21.5 million in funding to fight Uber in South Africa, and Taxify is establishing itself across the continent. In Kenya, mobile operator Safaricom launched Little, which has an advantage in that it can leverage off the M-Pesa mobile money system. Uber, then, is facing battles on all fronts.
Taxify CEO and founder Markus Villig says the taxi-hailing environment in Africa is very competitive, but believes there is room for several players.
“Ride hailing is only 2 percent of urban transport in most cities around the world today, which means there is a lot of potential in the market,” he said.
Villig said Taxify is looking to differentiate on price, while also treating drivers better than any other platform. He also believes e-hailing companies and established taxi companies need to collaborate, while it is key for government to be part of these discussions.
“Some of their grievances are legitimate. However, the transportation industry is evolving at a really fast pace that is actually beneficial for the economy and its people,” he says.
“For the few operators that are being affected by this change, they need to realize that the new operating environment has led to millions of people being transported in a safe, reliable and economic manner whilst creating jobs for hundreds of thousands of new drivers.”
Treating drivers better is the mantra of South Africa’s Africa Ride, another new entrant to the e-hailing space. The company offers drivers a share in the business, empowering them more than Uber. That could be a game changer, said Africa Ride founder Thabo Mashale.
“Drivers will feel like they are building something of their own as opposed to enriching a few individuals,” Mashale said. “Look at this in this way: when there are several apps out there, drivers will want to login on the app which they own and have control over it.”
Mashale feels innovative ownership tools such as this will help Africa Ride overcome relative lack of resources to challenge Uber on the continent. Either way, it is clear companies must adapt to the African context.
African transport defined by agility, creativity, adaptability
African cities — some of the fastest growing in the world — present very real challenges when it comes to congestion, Uber’s Allenberg said.
“While each country offers its own unique opportunities, we have found the African region to be defined by agility, creativity and adaptability,” she said.
She said she believes this is an opportunity rather than a problem for Uber.
“This provides Uber with the perfect conditions to launch and nurture our on-demand economy in partnership with local governments and existing businesses,” she said.