Why is Uber pulling out of some African markets?

Live Click here to searchsearchSign upNewsWhy is Uber pulling out of some African markets? Uber’s exits from Nigeria and Uganda highlight the growing challenges of making ride-hailing work in Africa.

1. Al Jazeera Centre for Public Liberties & Human Rights.
2. Why is Uber pulling out of some African markets? | News | Al Jazeera Skip linksSkip to Contentplay Live Sign upShow navigation menuNavigation menu.

The company ended its 12-year run in Nigeria and about a decade in Uganda on September 2 , saying the decision followed a “thorough review” of its business priorities and was limited to those countries.

Reuters informou que a Uber não forneceu razões específicas para a saída da Nigéria.

But the latest pullouts follow a series of exits from African markets. After six years in Ivory Coast, Uber left last year and ended its Tanzania service in January this year after nearly a decade there.

The closures do not point to a simple lack of demand. Instead, they highlight a harder calculation: whether platforms can keep fares affordable for passengers, whether drivers can earn enough to stay on the road and whether commissions are high enough to make the business worthwhile.

Nigeria provides the clearest example.

Por que a Nigéria se tornou tão difícil para os motoristas da Uber

President Bola Tinubu’s economic reforms, including the removal of the fuel subsidy and changes to the naira’s exchange-rate regime, have reshaped the cost of doing business in Nigeria.

For ride-hailing drivers, petrol, imported spare parts and vehicle maintenance have become more expensive, squeezing incomes at a time when fares remain under pressure.

A frustração atingiu seu auge em março, quando motoristas que trabalham para Uber, rivais Bolt e inDrive organizaram uma greve de três dias em Lagos e Ogun, protestando contra tarifas que consideram insustentáveis e condições de trabalho precárias.

Uber driver Farouk Adebayo, who joined the strike in Lagos, told Al Jazeera how the economics had changed.

For drivers, the problem was not simply what Uber charged. It was the accumulation of costs on top of the platform’s commission.

Ayoade Ibrahim, co-fundador e secretário-geral do Sindicato Amalgamado de Transportadores de Aplicativos da Nigéria (AUATON), disse que os motoristas estavam sendo apertados por várias direções.

That shift matters because Uber is competing not only for passengers, but also for drivers who can move between platforms.

Bolt and inDrive are major competitors in Nigeria, alongside local platforms, such as Rida and LagRide.

inDrive permite que passageiros e motoristas negociem tarifas, enquanto seu modelo global geralmente envolve uma taxa de serviço de cerca de 10%.

For drivers, the ability to switch platforms, or leave them altogether, gives them an alternative when commissions or fares become unattractive.

That makes the market harder for platforms to navigate as operating costs rise. A large customer base can generate plenty of rides without necessarily generating enough margin.

Uganda presents a different market but a familiar problem.

The Smart Online Drivers Association resisted platform commissions in 2019 when it petitioned parliament over what it described as exploitative practices. Drivers were particularly concerned about Uber’s 25 percent commission while fares remained low.

Bolt and SafeBoda were already established competitors in Kampala before Uber’s departure. Smaller platforms, including Faras, Yango and Tinka, have increased the competition.

Uber entered the Ugandan market in 2016 and later launched UberBODA.

The challenge, as in Nigeria, is not necessarily finding passengers. It is keeping the three sides of the business, passengers, drivers and the platform satisfied enough for the model to remain viable.

A Uber não afirmou que Nigéria ou Uganda não eram lucrativos, nem forneceu uma explicação detalhada país a país sobre as saídas.

Instead, it says it is focusing investment on markets where it can provide earning opportunities for drivers at scale and where riders can travel seamlessly. The company stressed that it remains committed to sub-Saharan Africa.

Kenya shows why pulling out is not inevitable.

In 2022, the Kenyan government introduced regulations to cap the commission of ride-hailing platforms at 18 percent. Uber had been charging 25 percent and after driver protests, the company cut its commission to 18 percent.

Em vez de sair, a empresa alterou a economia de sua operação.

That suggests Uber’s calculation varies from market to market. Where it sees enough long-term value, it can respond to pressure by changing fares, commissions or other parts of its model.

Quando a economia já não justifica mais esse investimento, a saída se torna uma opção.

Nigeria has a huge population – 237 million – and substantial demand for urban transport. Uganda has a growing urban market. Tanzania and Ivory Coast had their own opportunities.

Yet market size alone is not enough.

For ride-hailing platforms, the calculation is ultimately simple: passengers want affordable journeys, drivers need enough income to cover their costs and the company needs a commission large enough to sustain its service.

Uber’s exits from Nigeria and Uganda, following the leaving of Tanzania and Ivory Coast, point to a more selective approach to Africa.

Por enquanto, a Uber diz que permanece comprometida com o continente. Mas seu futuro pode depender cada vez mais não da quantidade de demanda que pode encontrar, mas de quais mercados podem fazer a economia funcionar.

For Ibrahim, the calculation ultimately comes back to the people behind the wheel.

Anúncio Conectar ConectarMostrar mais Nossos CanaisNossos CanaisMostrar mais Nossa RedeNossa RedeMostrar mais Seguir Al Jazeera English.