Why Uber Will Be Africa Challenged.
The other day I was in Europe for the holidays and there, for the first time, I experienced the joys of the technology innovations Uber and AirBnB.
Fascinating, interesting and definitely a must try. How with a mobile app, you have a place to stay, how to move around all privately. Just bring your own beer.
A friend that I was visiting asked me if we have Uber in ‘Africa’, after I put out the tweet
“@g33kmate: Now more than ever i understand why and how innovation in the global north like @Uber and @Airbnb work so well…”
My response to him at the moment was that there is in South Africa but I doubted it would work so well in Kenya and others. I gave a few reason then but after a lot of thought, here is a more comprehensive list:
1. Efficiency and accuracy.
@NyawiraNjuki: @kenyanpundit @uber niche, few cars available, heard from friends drivers not reliable (naija (Nigeria) habits of I’m 10 min away)
Uber works well in cities where it is easy to estimate time, traffic and speeds. In most African countries, however, this is easier said than done. Transit innovation and efficiency is still an untapped market. A response like that in the tweet above is very common from taxi drivers, “I see your house, I am almost there..” While in fact, they are not. They just try to manage your expectations.
Unlike global northern countries where Google maps can determine traffic and road works and propose alternative routes, this is not the case in Africa. For this reason, arrival time estimation might will not work very well.
The good thing, though, with Uber is that you are able to track the Driver’s exact location
2. Best Buy
We are the kings (and queens) of bargains. Well, that is what mama taught me! Don’t settle for the initial price, bargain. I have never taken a cab in any African city that I have visited without bargaining. The closest I came was in Egypt where they had metered taxis and even then, they had an alternative for no meters. Uber negotiates a price for you mostly because they can determine a lot of things on distance and congestion. They try to give you the best price. With Uber, well, I am not sure if I could have gone lower than the accepted price.
Most cabs are not metered. In Kenya there are no metered taxis, although most taxi companies have zone prices. From one zone to another attracts a standard price.
3. Modes of payment
Uber relies a lot on people using credit/Visa cards for payment. In a continent where Ecommerce is not largely trusted, payments for this becomes a hard conversation. With recent hacks on credit card information, eCommerce transactions take a step forward and two steps back. Uber works in a way that lets you enter your correct details and every time you use the service, your card is billed and you do not need to carry or give any cash to the driver. In our mobile money economy, this logic will not work as seamlessly as the card one.
4. Security and trust.
I know people who had had the same taxi driver for years! Some of my friends trust their cab drivers with their house keys and for this reasons, they find it hard taking a ride from someone new; even then, they only work on recommendation, “hey, what’s the number to your cab guy! Mine is busy..” With insecurity issues in Africa, it is generally harder to take a random driver each time you go home especially when not from licensed taxi companies with driver profiles.
The WorldBank, USAID and the UN use specific taxi companies and even for their visiting expats, they only recommend these. Use another at your own risk.
5. Licensing and legal issues.
Just like the licensing issues Uber drivers are experiencing in Belgium, Germany etc, the same is evident with this week’s case in South Africa where cars were impounded for lacking proper licenses. There are many unlicensed drivers especially in kenya, who do a more off the grid version of Uber and signing up for a service like this brings them to the limelight especially with getting into trouble with the law.
In Kenya, for example, any public service vehicle is insured and licensed differently. With Uber, this means that the drivers have to go through the same registration with the government and insurance as they are now PSV. Why not be a legal taxi all the same?
Generally, having taken both, legally registered and the unregistered taxis charge the same amounts for movement. Uber’s competitive advantage is the lower price index.
This post in no way suggests that Uber will never work in Africa.
When @kenyapundit asked how Uber was doing in Nigeria, one of the responses said:
@tizomu: @kenyanpundit Not too bad actually. Nigeria is actually quite a Target for Cab hailing App companies. I know at least 2 set to set up camp.
This just means that Uber will have to rethink they strategies on how to mitigate some of these challenges especially to successfully enter the African market.
But that said, just like I think some cities will alter their licensing plans to accommodate Uber drivers, I am certain there are some drivers that will find a way to make Uber a success.
If you have any more reasons, please post in the comment section. Thanks.