Uber banks on smaller UberGo cars for post-lockdown growth
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Johannesburg - After seven years of ferrying customers in more spacious sedans through UberX and Uber Black, Uber is now banking on smaller, more economical cars through UberGo.
Uber expects cash-strapped South Africans to look for cheaper rides and they believe the R6 per kilometre UberGo is the answer.
UberGo cars are typically smaller, have smaller engines and are more fuel efficient. Drivers of bigger sedans are also allowed to accept UberGo trips, but at the lower rates.
At a launch event of UberGo, held in Sandton, Uber said it was expecting more smaller, fuel efficient and economical cars to infiltrate the market post-lockdown.
Uber sub-Saharan Africa general manager Frans Hiemstra said there were currently 12 000 driver-partners in South Africa, ferrying over 1 million active customers, mainly in Johannesburg, Pretoria, Cape Town, Durban, East London, Port Elizabeth and Pietermaritzburg.
Hiemstra said the past seven years of operations in South Africa and the sub-Saharan market had been “incredible”, but he admitted that the lockdown – from April last year – had forced Uber to review the model and provide customers with cheaper rides.
“It is incredible to see how far we've come and a lot of that is about how much we’ve learnt, if we go back to 2013 when it started for us in sub-Saharan Africa.
“We flagged risks to growth, characterised by red tape and debt. There were a lot of challenges and risk.
“On the back of that, there were opportunities. Africa is important because it has the largest untapped territory,” he said.
Of the Covid-19 lockdown and its impact on the business and the business model, he said: “The year 2020 was a big year for us. When the world shut down we had to go back to the drawing board. We spun up Uber Connect quickly, last year, using our Uber Eats drivers.
“We rolled out UberGo because we understood that our driver-partners, our customers, were all feeling the economic pinch. UberGo offers compact, cost-effective vehicles and we give access to drivers.
“It’s the lowest cost for drivers as they manage their own businesses. We have created economic opportunities for entrepreneurs. We have over 60 000 drivers serving 3 million riders in sub-Saharan Africa,” he said.
Hiemstra also said they were looking for more female driver partners as a company and, by last year, Uber International had reached its global target.
Locally, he said: “We are still going strong and we are excited to have reached our goal.”
Meanwhile, on the issue of safety of driver-partners and customers, he said driver-partners and customers had 24/7 access via the Uber app, which could send an SOS to a private security company which would respond immediately in the event of danger.
“Safety is a top priority for us, whether you are a driver-partner or a customer. We understand that South Africa is a dangerous environment and we want to make sure we can keep the driver and the customer as safe as possible. As a rider or a driver, you have 24/7 access to private security using your app,” he said.
Returning to the impact of the Covid-19 lockdown, he said Uber had been severely impacted, particularly during the level 5 lockdown when only essential workers were allowed outside their homes.
“We hit our lowest point in April (2020), but we are seeing a recovery. We are seeing fewer airport trips than in the past. It’s a different type of recovery, we are seeing an increase in day-to-day trips and we are observing that the demand is stretched across the day a lot more.
“Another thing we saw at the worst of the lockdown was at the call centres in the big cities. They had to get the workers to work and they didn’t want to put them in public transport, so they partnered with us with Uber Business.
“I am confident and positive about the recovery. We will give access to a rider base we have not had in the past, we are seeing new riders,” he said. | IOL