Photo credit: DW
A week ago, Uber unexpectedly announced its departure from the Nigerian market after spending more than a decade building up its market in Africa’s most populous country. The ride-hailing platform also said it would be winding up its operations in Uganda – also with immediate effect.
DW Canada reports that with the exit from both Nigeria and Uganda, Uber now remains operational in a handful of African countries – Egypt, Ghana, Kenya, and South Africa.
“This decision is limited strictly to only to these two markets and does not impact our operations across the rest of the continent,” Ubwr said in a statement, adding that their “immediate priority is supporting drivers, riders, and local team members throughout this transition,” without sharing details on what this assistance would entail.
In the last year, the multinational company also closed shop in Ivory Coast and Tanzania, while also cutting its global workload by 10%.
Uber has not managed to grow across much of the African market despite its massive global scale. The profit-driven ride-hailing faces stiff competition from rival platforms, including Bolt, inDrive and SafeBoda, which operate in Nigerian and Ugandan markets and beyond.
However, it’s not only Uber that is having to deal with its frustration over the current situation. Many of its drivers across Africa have been raising complaints about shrinking profit margins amid rising fuel costs, inflation and currency volatility, especially in markets like Nigeria.
In their view, Uber’s model of pocketing around 20% – 25% of any trip fare in commissions is no longer tenable.
Uber meanwhile did not provide a detailed explanation for its decision; however, it comes against the backdrop of double-digit inflation in many places across Africa, which has eroded the purchasing power of millions of people while pushing them deeper and deeper into poverty.
This also makes consumers less likely to use the transport company.
Ikemesit Effiong, partner at SBM Intelligence, a consulting firm based in Lagos, explained that “(r)ising costs for such things as fuel, vehicle maintenance, insurance, coupled with a currency that is less valuable now than in 2014 means that fares were climbing faster than the average Lagis or Abuja rider’s willingness or ability to pay for the convenience..”
Mary-Esther Anele, a Lagos resident, told DW that she knows that she is “going to start looking for alternatives.”
In some other African countries like South Africa, ride-hailing apps like Uber have also long been a thorn in the side of taxi companies and minibuses, whose operators say tey don’t want to compete against those drivers, even resorting to violence at times as part of ongoing local taxi drivers.
As countless drivers prepare for an unknown future, the end of their partnership with Uber might – for many – spell their journey’s end.
