Safaricom’s best chance to take on Uber lies in an old tool — the SIM Card — not an app.
As the curtain drew on the 19th century, the first motor vehicles took to the street. Human history had been altered forever.
On 1st July 1991 another most important develoment in human history happened. Then Finnish prime minister Harri Holkeri placed the first GSM call to the Mayor of the city of Tampere, Kaarina Suonio.
Sixteen years later — in 2007 — yet another important development occured. The first M-PESA transaction was made. Now the GSM simcard was no longer just a means of making calls and sending messages,it was a way to bank.
Fast forward to present day Kenya. Safaricom, skilled experts at applying the SIM card to all manner of things, have upon them a great opportunity. The opportunity to take on one of the world’s fastest growing companies ever using the sim.
Uber’s main competitive qualities; political savvy and a war chest from here to Wall Street and back. Safaricom’s: the good old GSM sim card, which Saf is betting is mightier than the dollar.
The company launched Little Cabs, an e-hailing service developed in conjuction with Craft Silicon, yesterday. Both Craft Silicon and Safaricom are big players on the Kenyan Fintech scene. Safaricom has M-PESA. And Indian born Kamal Budhabatti made his fortune with Craft Silicon selling a banking software solution — Banker’s Realm — to Kenyan Tier 3 banks. Craft Silicon was behind nearly a dozen different early mobile banking apps.
Naturally one wondered whether both companies could bring their fintech expertise to bear in the world of e-hailing apps.
My trust in Safaricom’s other non GSM offerings had wavered since I purchased their ill fated set top box a couple of years ago. Their cloud offering leaves a lot to desire.
Still, Big Green has unwavering loyalty from a large customer base in Kenya where it operates a virtual monopoly, brand name recognition, Mpesa and the STK.
Safaricom’s best chance to take on Uber would be to integrate the cab hailing service into its STK. Its the primary reason that M-PESA was a such a resounding success.
My brother would have an easier time using the service than signing up for Uber with a debit or credit card. In fact there would be no signing up. He would just set a pin for Little Cabs taxi hailing on his phone. The network operator already knows who he is , thanks to stringent SIM card registration rules in Kenya. He just needs to set up a pin or pass phrase. He would be able to pay for his ride with M-PESA which he and 18 million other Kenyans already have.
He may be notified about nearby cabs via SMS. Uber has recently taken to integrating its service with Facebook Messenger. In this context the value of a graphic visualization of nearby Uber vehicles on a map is increasingly debatable. After all it is the time to pick up that most interests us not a fancy animation of how the vehicle moves.
Rumors had been afloat for most of the year that Rocket Internet backed Easy Taxi was looking to exit the Kenyan market. There had been concerns that American investment bank Goldman Sachs — an investor in the African Internet Group consortium that brings together the Samwer brothers and various other investors — had decided to place all its bets on Uber. No further financing would be coming from them for EasyTaxi. EasyTaxi competes with Uber in markets such as Nairobi. When the decision was finally confirmed a couple of months ago, it was announced that a hitherto unknown e-hailing startup LittleCabs would be taking over EasyTaxi’s Kenyan staff and partners. Soon details emerged that LitleCabs was backed by Safaricom. This was potentially big news.
I was disappointed however to find out that their offering consisted of an app made by Craft Silicon, and little more. At launch yesterday Little Cabs touted a possible USSD e-hailing service extension.
The secret to Uber’s success lies not in just an app. It lies in reshaping an experience. With LittleCabs, Safaricom have been presented with a great opportunity to reinvent the e-hailing and transportation experience.
As things stand, Craft Silicon seem to only have achieved a bit of buzz for their app by having Safaricom headline their launch announcement. Safaricom’s involvement seems to be limited to support services such as installing WiFi . Safaricom customers may redeem their loyalty points in exchange for free rides. They will also be enabling M-PESA payments for LittleCabs. The value of integrating M-PESA payments in this context is dubious. M-PESA has not exactly taken off in short range transactions. Even after Uber enabled M-PESA payments the bulk of payments is still made in cash.
There is little by way of an unique value proposition in LittleCab’s offering. In fact Safaricom’s C.E.O Bob Collymore was quoted citing the ability to relay in car radio station preference as a major sell for the service. This is hardly revolutionary.
Safaricom doesn’t seem to know it yet. But in the SIM card and its STK lies its best chance to take on Uber.
If Safaricom can bring cab hailing to the SIM card then Little Cabs has a way better chance of success. And they might just achieve the marriage of motorised transport to the humble GSM sim card as they have so successfully married it to money.