7 Reasons Why Uber is Right for Kenya
Why 7? Why not 6 or 13? Well, seven just has a nice ring to it. Say it in whatever language..Saba in Kiswahili..Its the ultimate number, the number of completion according to the good book. The lucky number; Magical even..: if you don’t believe it ask yourself why Sportpesa had to use it in their SMS Code 79079 or why JK Rowling wrote only 7 books in the Harry Potter series. Did you also know that It only took Travis Kalanick, the Uber Founder and CEO seven years to destroy Robert Noyce’s nearly 60-year tech labor legacy or that there are seven continents in the world not 5. Seven days in a week, Seven dwarfs, Seven basic musical notes, Seven world wonders, Seven compartments of the heart, Seven phases of the moon ..Seven colors of the rainbow..were those 7 reasons already? Yap! Lets now jump in.
Hold Up! I assume you have used UberX. Dont worry neither have I, practically at least..maybe I will get my first ride this week but trust me.:I know all there is to know about Uber, my word is worth its weight in medallions :) if all the research I have done about it is anything to go by.
Uber is one of the world’s fastest growing start-ups and most successful on-demand taxi hailing services. While it took 8 years for Facebook to reach $50bn in valuation, Uber reached that milestone in less than 5 years. Starting from San Francisco in the US of A in 2013, Uber is currently in almost 400 cities around the world, in over 60 countries and is currently valued at about $60bn. Pretty impressive, ah? It launched in Nairobi, Kenya in 2015 as its 3rd city in Africa after Jo’burg and Lagos. From its initial 30 cars, the service has continued to grow in Nairobi on the daily and might soon spread to other towns as the demand is becoming more and more ubiquitous among tech savvy city residents who enjoy convenience.
Ready to jump in now? I bet. Lets explore the reasons why the service is right for Kenya, how its poised to grow exponentially and possibly make a dent in the troublesome transport industry in Kenya. In no particular order..:
1. Security
Just the other day a post by Njeri Ngunjiri caught my attention on my Facebook timeline. Apparently she had been assaulted after an altercation with an Uber taxi driver. You can see the full narration of her ordeal here although it was pulled down by Facebook for violation of community guidelines. What I immediately noticed from her account of the incident is that she probably was a bit brash in her interaction with the driver which led to some bitter exchange of words. To get the other side of the story my curious self obtained the number from the screenshot she had posted and called the guy. He did not pick up at first so I left a text for him to call me back. Surprisingly he texted back indicating that I can call.
I cleared my throat, dialed his number and when he picked up I told him that I was a blogger doing a research about Uber with focus on rider-driver relationships. The guy refused to divulge the details of the incident as he sited it was already a case being handled by the police — he knows about subjudice and all..: but prodding him for what exactly led to the incident he freely admitted that the altercation started almost immediately the rider, our lovely Ms. Njeri stepped into the car..I justified my intuition with this revelation. The driver sounded like a nice guy to me.
See, some of the Uber driver- partners are people with a regular job who are looking to scratch an extra coin from driving passengers heading in their direction or utilizing the idle capacity of their cars. You just don't step into someones car and start ordering them around even if you are paying. You don't have to be in your best behavior, complacent or all timid with hands between your legs, sitting in the same stiff posture for the whole trip..:but good interpersonal skills between the driver and the rider is necessary for an enjoyable ride.
Would the incident have been different if she just let the driver do his job? Would the driver have handled the situation differently if he was better trained in customer service?
Uber drivers already know where you are going as they accept your requests..: the app has a map, which works perfect turn by turn.
Were it any other regular cab, would she have access to the drivers personal details, name, car number plate, and phone number?
Uber does thorough screening for all their drivers before on-boarding which includes a certificate of good conduct. Well you might argue that the certificate only proves that the bloke has not committed any crime over the past six months and that it does not guarantee that he shall forever remain a saint. TRUE..:but Uber goes further and lets riders rate the drivers and vice-versa.
That right there is a huge plus for the security situation in Kenya. By sharing your ETA you can enjoy the ride in the comfort that if anything away from the usual happens while ‘Ubering’ on both rider or drivers’ divide..it would be easy to trace with pinpoint accuracy who was involved and probably how it happened. Think of all the security cameras at strategic points across the city to visualize how such infrastructure coupled by the technology that Uber rides on guarantees your safety.
2. Mobile Technology
The Communication Authority of Kenya quarterly sector statistics for the period between July and September 2015 as broken down by Moses Kemibaro sheds valuable insights on the trends and opportunities bought about by the advancements of Mobile technology in Kenya.
Mobile Metrics
- Mobile subscriptions grew to 37.8 million during the quarter in Kenya after growing by an impressive 1.7 million subscriptions in the last quarter.
- Mobile penetration grew to an impressive 88.1% which is just a shade under 90% meaning that all of Kenya will soon be on mobile devices.
Internet Metrics
- Internet subscriptions in Kenya hit 21.6 million meaning a penetration of 74.2% was achieved during the same period. Its fairly obvious that Internet growth in Kenya is very clearly linked to mobile penetration as the two are exploding in tandem.
- Broadband Internet subscriptions which are still 99% mobile were 6.3 million for a penetration of 14.7% which is obviously being driven by inexpensive smartphones and other mobile devices.
Postal & Courier Services
- The number of letters posted locally dropped by 17.2 per cent to stand at 12.9 million letters down from 15.7 million letters registered the previous quarter.
- There was a decrease of 2.8 percent in the number of courier items sent to register at 305,248 down from 314, 272 items recorded in the previous quarter.
The mobile and internet metrics resonate with the reasons Uber chose to set up shop in Nairobi, while the courier metrics tell of the potential for other other Uber services like UberRush. Kenyans catch on with technology very fast, the population from young to old has remarkably adopted mobile phones and its use as a unique means of connection to some remote terminal. The success of Safaricom attests to this fact and demonstrates that Kenya is the most vibrant economy in terms of technology in East & Central Africa.
Further Jacob Kushner, notes in his article:
“For Uber, as for many corporations, the developing world’s potential upside is clear. With an estimated 3 billion people living there — almost half the world’s population — the growth opportunity is off the charts. Even more tantalizing: A predicted 1.3 billion people will move into cities between 2007 and 2025, half a billion of them in Africa and most of them without cars.”
Who wouldn’t want a piece of all this action when backed by solid technology and sufficient resources to launch and scale??
3. Employment Opportunities
According to the Kenya Youth Survey 2016 conducted by the Aga Khan University, Kenya is a very youthful country. The median age is estimated at 19 years, and about 80 percent of Kenya’s population is below 35 years.
The university interviewed 1,854 respondents aged between 18–35 years from across the country, including both urban and rural areas. The survey reveals a number of important and sometimes surprising insights, and offers reasons both for optimism, deep concern and the need for urgent action. Below are some of the findings and insights from the survey:
A majority of Kenyan youth (48%) would like to go into business. Only 26% percent wish to pursue careers such as engineering, law, medicine, and teaching; only 11% would wish to go into farming.
Overall, unemployment among youth was 55%. Unemployment was highest among women at 62%.
Low capacity to absorb the growing supply of school leavers, college and university- educated labor in the decade when Kenya recorded the highest headline GDP growth: With an employment rate of 30% among university graduates, there is likely a weak positive association between education and employment.
Where does Uber fit in this puzzle? Will the success of Uber in Kenya mean that that the regular taxi guys are unfairly pushed out of business? The company has faced opposition albeit not as aggressive in Kenya compared to other cities where the taxi associations tried to block their operations.
How I think Uber can help towards easing the employment crisis is two fold:
First: Uber’ s business model hinges upon recruiting driver partners who use their cars as taxis where a commission is charged in exchange for using the platform. The direct opportunity for early adopters is to either use their cars to drive people going in the same direction or dedicate the car for full time service by renting it out for a fixed monthly income or alternatively hiring a driver and paying a cut out of what is made from the Uber rides monthly.
The obvious caveats are insurance, maintenance and personal convenience but as my friend Livingstone Ndegwa aptly argued the other day is that you can cover all these costs and still make a handsome amount monthly in whichever option you consider. Ndegwa informed me that he is aware of several individuals who have seen the opportunity and are either looking to hire cars and importing some for the Uber business. Just today Nailabs CEO Sam Gichuru posted a job advert on his timeline. Find it here. From the job description and requirements I can bet they are looking for Uber drivers.
If my memory serves me right, Uber is currently operating with 1000 cars around Nairobi where there are over 800,000 vehicles, both public and private. About 85% of the city’s population of over 4 million depend on the less than 30,000 public service vehicles. If you happen to be in Nairobi traffic as you read this just observe the number of personal cars with only one or two occupants and compare it with the almost always full and sometimes congested matatus..: Therein lies the opportunity. We can definitely do with more butts in more seats — Win-Win for everyone. The Matatu culture is quite interesting with original graffiti, cool music and WiFi. What if Uber cabs can adopt the good stuff besides just having mineral water. Having free reliable WIFI would be really cool..Kenyans looove free internet..:
Secondly: Using Motorbikes popularly referred to as Boda Bodas or Nduthis if you like for the last mile is common place. The only reservation sited among those who avoid to use them is the numerous accidents usually caused by non-adherence to traffic rules. Most of the guys speeding off on those 100–180 cc bikes have never been to a driving school. But there is this new breed of elite riders with superbikes in Nairobi.
Chech out the short clips Here and Here. Credits to David Mbaya.
This swarm of bikers are guys with regular jobs who can offer a ride at a slight premium for last mile as biker partners. Uber is already running the service in Thailand, Bangkok dubbed UberMoto. What if you could request one of those trained, elite super bikers from your Uber app in Nairobi to pick you up because you are notoriously late for a meeting, want to beat traffic or simply want to enjoy the thrill?
4. Culture
Aren’t Kenyans a hospitable lot? We obviously have our tribalism problems but I think that only comes out when we are talking politics. For the rest of the time we are really good with each other, kind and rise to the occasion to help whenever we can. We have been taught to share since we were kids..: I dont know how you grew up but for most of us both in school and in the family settings we have had to share resources..:From toys, books in school, beds at home, post office boxes, to even sharing girlfriends <forgive the pun>..The point I am trying to pass across is that we are very comfortable sharing resources.
Uber is based and thrives on the sharing philosophy. According to Uber car pooling leads to a reduction in carbon emissions and therefore a reduction in the adverse effects of global warming. I don't know how you were affected during last year’s Elnino..: I spent the whole night stuck in a bus, with a very expectant lady seated besides me.Traffic was jammed on Ngong Road, I got home in the wee hours of the morning from boarding the bus at about 10 pm at night. I cant comment much about the metrics of how ‘Ubering’ would lead to reduction of gas emissions in Nairobi but trusting that Ubers claim is valid let us share! I never want to be in a position where I could suddenly be called upon to midwife. The effects of global warming also mean higher temperatures which would be dire in this skin bleaching age.<Again forgive my pun, I digress.>
How does the idea of UberPool for Easter, Christmas or even Road trips to #TembeaKenya sound for you? Kenyans like to travel over the holidays to be with family..: If UberPool could work in Kenya guys will be more than happy to pool rides for these occasions.
What of weddings, ruracios and all those #gettogether manenos? Ooh! and what about Valentines? How about a commercial around Fadhili William’s ‘Taxi Driver’ for Uber? The nostalgia it can arouse will definitely attract the attention of the old folk. For the younger guys why didn’t Uber Kenya run a promotion around a phrase like ‘Muonyeshe Mapenzi na Uber’ — Show her love with Uber. ‘Huba’ is a swahili word that means Love, it sounds a lot like Uber and the phrase from a popular song would really resonate with Kenyan music lovers. Heck! I’d appreciate the creative design of a fine Kenyan lass holding some roses on a billboard with the phrase or maybe its close permutations.
5. Growing Middle Class Population
Did you know that Africa now has the fastest-growing middle class in the world? Some 313 million people, 34% of Africa’s population, spend USD 2.20 a day, a 100% rise in less than 20 years, according to a report by the African Development Bank.
The bank’s definition of middle class in Africa is people who spend the equivalent of USD 2 to USD 20 a day — an assessment based on the cost of living for Africa’s near one billion people. It is acknowledged that many living on USD 2 to USD 4 a day could easily slip back into poverty. But even when you take these people out of the equation, the bank puts the stable middle class at 123 million, 13% of the population. By 2060, says the bank, the number of middle-class Africans will grow to 1.1 billion (42% of the predicted population). The bank describes the trajectory as ‘unstoppable’.
Narrowing down to Kenya, a study conducted by Standard Chartered , The Emerging Affluence Report 2015, shows that Kenya’s middle class saves six times more than their American and British financial peers in the West. Kenyan respondents said in the poll that launching their own business is their number one wealth goal over the next 10 years while acquiring high-end property forms their medium-term goal.
Owning an Uber Cab can be the first step for a proportion of those who will choose to invest in the public transport business. The statistics also speak volumes about the propensity of the growing population to spend in more luxurious, convenient and sometimes cheaper modes of transport like Uber.
6. Regulatory Environment
One Mr Waihiga Muturi notes in his LinkedIn post that:
The business war in Nairobi between Uber app service providers and local taxi operators highlights the challenge of regulating and taxing new technology.
Uber contracts private drivers who use the app and pay the firm a royalty of 20 per cent of revenue earned, but none of the cash goes to the government through direct taxation.
With much technological advancement comes resistance to change. Even Mpesa was once thought to be a passing fad, got its fair share of resistance from local commercial banks but as time went by the same banks have ended up benefiting from the service. Like is the norm with disruptive technologies, Uber strayed from the normal operations in the local taxi industry attracting the bile from operators. However, its benefits cannot be slighted. There are glaring gaps in regulation but the app is helping towards organizing the industry by creating a registry of taxi operators complete with their personal details and revenue earnings.
Can this spark a domino effect which will see the benefits overflow into the other facets of the industry, specifically in Matatus leading to a better regulated and technologically advanced public transport?
I will be keen to observe how this develops fully aware that Uber’s model has already piqued the interest of young innovators. Running the Start-up Matserve Msafiri, a road safety tech solution taught me a great deal about the cantankerous (for lack of a better descriptive word) industry that is the Kenyan public transport. Despite all the media coverage, exposure and support we received from technology incubation hubs iHub and Nailab it was really difficult to make inroads and create any significant change in the industry.
Looking back I now know that one of the reasons we failed was that our app to a large extent required a change in culture through the community policing component. You could tell the exact speed the Matatu you are in was moving at and if over-speeding the app allows you to send the report to either traffic police or the bus company/matatu sacco. More about the Matserve Msafiri app here and here. I stand corrected but my feeling is that it can take a company like Uber only 1 year to achieve what our start-up would in 10 years..: The industry requires muscle — strong team with sufficient resources and to an extent change in culture which lies in the very fabric of what constitutes Uber.
7. Fusion of E-commerce and On-demand service
E-commerce is gaining popularity in Kenya fueled by the growth of Mobile technology. Have you ever ordered and paid for an item on either OLX, Jumia or Kilimall? I have, and was required to pay once I received the item. This tells of the trust issue that exists between buyers and sellers when making online purchases. Besides verification for quality of the items the logistics of how you receive the products after purchase has always been a challenge given the state of the addressing system in Kenya. The good news..:
E-commerce prospects in Kenya have gone a notch higher following the active involvement of reputed delivery companies in the transactions mix such as DHL and G4S. These companies provide their customers with an inspection service for all online goods before payments are effected and real-time tracking ability to monitor movement of parcels from dispatch point to the delivery office.
The edge for Uber to get into this market and thrive is it seamlessly combines an on-demand service for e-commerce in a slick intuitive app that is UberRush. Besides tracking, Uber’s offering in this niche might be even more appealing if its going to be a cheaper alternative. The Kenyan addressing system is still under development I believe. Currently there is an ever shrinking number of postal address boxes/accounts for the growing population.
What if your phone number could be used as your unique identity to identify your location and get items conveniently delivered to you when you order? How about if you can dynamically change your location anytime if you move houses, or prefer having your parcels delivered in the office instead of your house? Sound interesting, ah? A huge opportunity abounds here, almost everywhere you look for Uber.
Just wondering, there any way we could have UberGovt for Kenya, On-Demand service for public servants..Hiring..read voting only best performing incorruptible individuals with the best ratings from around the world? Outlandish..I Know :)
I never thought that this would be such a long post. There are just to many ideas, experiences that I wanted to share and sometimes useless information that came to mind as I was hitting the keys for this. If I was to compress it down in one or two lines this is what would be my conclusion..:
Uber runs superior technology with huge potential to thrive in Kenya and leverage its experience here to scale in other counties in Africa. They however need to get it right going forward as they realize growth..: The dynamics are very different compared to other cities around the world in terms of culture, infrastructure, business environment and more so the labor force as it is people who build a company. Uber is practically into everything, I will be keen to observe their endeavors which are ultimately geared towards pushing humanity forward. All the best Uber!
Are you still here? That means you survived the long read, CONGRATULATIONS..: and Thank you for reading. This is my first post on Medium, actually my first blog post on any media :) If you like it hit the recommend button below. Adios!
Twitter: Kamau_Nij
