The U.S.-based taxi-hailing service Uber first launched in East Africa in Nairobi, Kenya. However, the ride Uber has experienced has been a far cry from a smooth ride; with traditional metered taxi picking a fight (literally) with taxi operators that have decided to work for Uber.
According to Reuters, Uber is planning on expanding into the Tanzanian, Ugandan and Ghanaian market this year. The cab-hailing mobile app will engage traditional taxi drivers in a bid to convince them to work for Uber.
Currently, Uber is present in seven cities across Kenya, Nigeria and South Africa. Nonetheless, it has had to make do with severe challenges. Such as the lack of credit cards, heavy-traffic roads and high rates of crimes in some cities. The biggest problem Uber has (one if face not just in Africa but from Rome to Rio) the animosity between traditional taxi drivers who see Uber drivers as a threat trying to disrupt the food chain by taking them out of the food chain altogether.
Currently, Nairobi remains Uber’s fastest growing market in sub-Saharan Africa, but there have been several reported incidences where the traditional taxi drivers severely attacked Uber drivers. In one incident, which happened last month, an Uber driver’s cab was torched. The traditional taxi association in Nairobi even staged a protest demanding that the local government ban Uber entirely from the country. However, the government rejected these calls.
Against the backdrop of these hostile attack from traditional taxi drivers, Uber is taking a new approach both in the market where it already operates and the markets it wants to venture.
“Part of our strategy when we launch in new markets will be that engagement up front with taxi operators. We will be doing a better job of engaging.” Alon Lits, the General Manager of Uber sub-Saharan Africa told Reuters.
Part of this strategy will involve convincing traditional taxi drivers to work for Uber when they do not have fare and continue working on their own when they deem fit.
Lits said Nairobi and Lagos will become Uber’s hubs that will act like Launchpad into Tanzania, Uganda and Ghana. Uber also plans on extending its services to other cities in Kenya and Nigeria.
Uber currently boasts of presence in over 400 cities worldwide. In North America and Europe, Uber customers’ credit cards are linked to their Uber accounts for automatic cashless billing. However, in sub-Saharan Africa where bank account holders are the minorities, the low credit cards usage presents a tremendous challenge to Uber’s growth.
In Kenya, Uber has been ‘experimenting’ with cash or mobile money payment and so far has registered impressive results with about 100,000 people opening an Uber account per month. Another challenge Uber is facing in Africa is that most Uber drivers (much like the regular drivers) rent their vehicles, meaning the income they get has to be split with some going toward paying for the car rental fee.
Thus, Uber is looking for ways drivers in Kenya and Nigeria can rent vehicles cheaply. While in South Africa, Uber has teamed up with money lending institutions to assist drivers in purchasing cars. Uber drivers are eligible for the car loans based on their work history with the taxi hailing services and their ratings by commuters on the app.