Blocked Traffic, Immolated Cars: Uber’s Problems in Africa
Uber has been on a whirlwind of expansion in Africa in recent months, launching in another 15 cities across eight African countries since it initially arrived in Johannesburg in 2013. And making what CEO Travis Kalanick called a “big push” into the continent in 2016. But in 2017 the company is facing mounting pressure in Africa, the likes of which the startup hasn’t seen before.
Just as it has back home in the United States and Europe, Uber has found itself at the centre of controversy since it arrived in Africa. In March, taxi drivers in South Africa mounted a protest against the company by blocking airport roads, while drivers in Kenya have been attacked, and cars set on fire.
“We do not feel that it should be about Uber or Taxi, but rather Uber and Taxi,” says Uber’s communications lead for Africa, Samantha Allenberg. “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.”
Traditional taxi drivers seem to disagree, however, and Uber is being forced to drive on alone, negotiating with regulators from city to city. Allenberg said the company is pro-regulation but says for it to work Uber needs to work with regulators that support innovative technology ideas. “Many regulators across Africa have been positive about our technology and the benefits we bring to riders, drivers and cities,” she said.
The company has changed its business practices in the face of local realities in places like South Africa and Kenya. Uber has introduced cash payments in Kenya, and is collecting data on drivers in South Africa, Kenya and Nigeria to help them qualify for vehicle financing. And last month, it launched a security system in South Africa and Egypt that uses selfies to identify drivers.
Success could be worth Uber’s trouble. “The market in Africa is both different and exciting,” Allenbergs says. “Africa has some of the fastest growing cities in the world.” Indeed, Tanzania and Ghana are first and third globally in terms of the growth in car ownership, according to the Organisation Internationale des Constructeurs d’Automobiles. Uber now has over 60,000 drivers across Africa, and with the increasing connectivity and growth in mobile penetration on the continent it senses a huge potential customer base.
But the company is is not alone in sensing the potential. The result is that the company faces as formidable competition in Africa as it does anywhere in the world where it operates. Taxify has launched in a number of African countries, while Zebra Cabs recently raised $21.5 million to challenge it in South Africa. In Kenya, mobile operator Safaricom launched Little Cabs, which has an advantage in that it can leverage off Safaricom’s M-Pesa mobile money system.
Yet despite the fierce competition and publicity headwinds, Uber is still the continent’s ride-sharing leader, with better prices and amenities than smaller players. In Africa, as in the U.S., Uber may find that, negative headlines aside, for consumers convenience is still king.
A version of this article appears in the May 1, 2017 issue of Fortune with the headline “Uber’s Africa Push Hits Roadblocks.”
