JOHANNESBURG - Until recently, public transportation in Cairo, Freetown, Lagos, Nairobi and many other African cities was chaotic and accident prone.
The mostly unreliable local taxicabs did not alleviate the situation. But Uber’s entry into the continent could be changing the narrative.
Uber, the global ride-sharing company that relies on smartphone technology for dispatch and fee payment, has become the most recognised alternative to traditional taxicabs.
Many prefer Uber, launched in the US in 2009, because of its fair prices, quality standards and convenience. The concept has spread globally.
By last June, Uber was operating in 15 major African cities, with some 60000 drivers in Egypt, Ghana, Kenya, Morocco, Nigeria, South Africa, Tanzania and Uganda.
Uber’s ambition is to dominate the transportation sector in Africa, but it faces stiff competition from local companies. Unintentionally, Uber triggered the spread of mobile and mapping technology for collecting geospatial data from a mobile vehicle.
Local technology
And the result is that Africa’s local tech companies are creating their own apps that provide different types of services to aid transportation.
And with Africa’s growing technical know-how, local tech companies are producing products and services tailored to suit customers in different countries or even different cities, giving themselves an edge over foreign services.
For example, the Kenya-based Little Cab, an app-based ride-sharing service launched in 2016 by cellphone operator Safaricom, operates just like Uber, except that it accepts the local cashless mobile-payment system, MPesa, unlike Uber.
Uber, however, pays no parking or other city charges, hence charges less.
Still, 94% of Kenyans prefer MPesa to other forms of payments. According to Safaricom’s 2016 annual report, Little Cab has been able to slow Uber’s attempt at grabbing a huge chunk of the market.
In South Africa, the locally based Africa Ride, which offers a variety of payment options, including weekly and monthly payment plans, and accepts payment via mobile wallet apps, is gaining popularity with citizens.
The company operates in Cape Town, Johannesburg and Rustenburg and allows individuals, corporations, NGOs and government departments to set up their own accounts.
Uber, however, appears determined to beat back local competition, and is partnering with indigenous companies to broaden its appeal.
In Nigeria, Uber has teamed up with the payment platform Paga, allowing users to pay for services through its mobile money app.
Paga also facilitates payments via local debit cards and cash for its 6.4million users.
“Partnering with Paga enables more Nigerians to access the Uber platform, many of whom are not yet comfortable using their debit or credit cards,” said Ebi Atawodi, the general manager of Uber Nigeria.
Competition
In total, Africa hosts nearly 60 ride-sharing services across 21 countries.
Some services have tried to adapt to local socio-economic realities, though they have not always succeeded. For example, the Nairobi-based Bod-app, launched in 2016, shut down its (boda bodas) motorcycle taxi and cab service after only two months.
The company said it decided to concentrate on its core logistics business at a time when competition in the cab sector was growing.
Still, in the face of competition, many African transportation companies have begun offering various forms of incentives to drivers and passengers in a bid to stay afloat.
Reacting to complaints of short changing by Uber drivers in South Africa, Africa Ride announced its more than 500 drivers would be given a larger stake in the business.
“Our drivers own the business with us. We have put all the drivers in a trust and the trust owns a certain percentage of the business,” Africa Ride founder Thabo Mashale told Disrupt Africa, an outlet for tech start-up news.
In 2017, South Africa-based start-up WhereIsMyTransport launched its Transport for Cape Town app, which provides information for those planning journeys, including timetables, traffic incidents and places of interest.
The scheme is expected to expand to six other South African cities during 2017: Bloemfontein, East London, Durban, Ekurhuleni, Johannesburg and Pretoria.
-BUSINESS REPORT
This article was provided by Africa Renewal. Visit www.un.org/africarenewal for more.