With Bridges Burned Elsewhere, Uber Looks to Africa for Opportunity

Investors want to see more results from Uber than its wildly overinflated valuation. But the company is facing its share of challenges, from Austin telling the ridesharing company it could leave town to the increasing angst felt by its drivers across the U.S. The company is trying to develop new revenue streams from delivering Walmart groceries to boosting a subprime automobile leasing program for drivers with bad credit.

But there is one market where Uber is eyeing virgin territory and sees potential: Africa.

Uber is already in 10 sub-Saharan African cities, including Abuja, Kampala, Lagos and additional markets in Kenya and South Africa. It first launched in Johannesburg in 2012, and opened in new markets this year. And the company is just not looking to move passengers across cities, but to deliver goods as well. This weekend, Uber launched in Accra, where it promised users free rides from Thursday until yesterday so that they could become familiar with the service. Its newest market, Dar es Salaam, will gain Uber service by the end of this month.

But establishing a market in Africa has been a challenge for Uber. As The Guardian outlined this spring, Uber drivers have been subjected to protests and even violence in Nairobi. Its reception in other cities have been more muted, generally because it is seen more as a niche service rather than one that has overtaken other forms of transportation.

Part of Uber’s acceptance in Africa, or at least the minimal outrage, is because Uber has been more flexible over how its drivers can be paid. For example, as TechCruch writer Jake Bright has pointed out, Uber is testing the option for passengers to pay in cash instead of through its smartphone app. The company also lets users pay its fares through the regional mobile payment services that have become the preferred means of financial transactions for many Africans. In addition, public transportation is often inadequate in the continent’s largest cities, and mapping software also faces challenges by these cities’ rapid development. The company ended up ditching Google Maps and partnered with a Kenyan startup, Okhi, which combines GPS coordinates with photos in order to help drivers find their customers as well as locations.

So can Uber add to Africa’s growing social enterprise culture, allowing commuters to move across town more easily while at the same time, help create new economic opportunities for citizens? Or is this company just going to expand its reputation as a corporate bully that exploits workers and views suggested regulations to improve safety with disdain?

It may not matter as one African technology company will soon launch a service that could give Uber a run for its money. Safaricom, which operates the world’s largest mobile payment service, M-PESA, announced to Reuters that it has a service that could be a net benefit for drivers and passengers. Named “Littlecabs,” this service will use M-PESA’s platform to match cars with commuters in Kenya. M-PESA already has 20 million customers throughout Kenya, and the company says it will provide drivers WiFi while saying payment for rides will be seamless for all users involved.

Estimates over its size vary, but the truth is that Africa has a growing middle class that could offer a huge opportunity for Uber and its competitors. If Uber does not further its reputation as a corporate bully, the company could have a hand at helping these cities with their choking traffic as well.

Image credit: Núcleo Editorial