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Uber looks to leverage SSA growth opportunity

Uber looks to leverage SSA growth opportunity

In the same week ride-hailing firm Uber announced its withdrawal from Morocco, citing the North African country's regulatory environment, the company also confirmed plans to increase its investment in Sub-Saharan Africa (SSA).

Alon Lits, General Manager for Uber Sub-Saharan Africa said the company is optimistic about growth prospects in the SSA region because countries there are characterised by rapid urbanisation.

"The United Nations economic report on Africa for 2017 listed urbanisation as a mega-trend in SSA, with profound implications for the demographic profile of the continent and its socio-economic outlook. Half of Africa's population will be living in urban areas by 2035. Each of those people will need jobs, access to services, and a solution to move freely and safely through the city they live in. This is where Uber will continue to play a vital role," said Lits.

In Africa the company competes with the likes of Taxify, LittleCab and Mondo Ride.

According to Uber in September 2017, the service celebrated four years of growth across SSA, with more than 1.8 million active riders using the app.

It has also noted repeat usage in countries such as South Africa, where the app is fast becoming a viable alternative to private car ownership.

"By the end of 2017, 29 000 driver-partners across SSA were taking advantage of the earning opportunities on the app," Lits added.

Tough regulation

In September last year, the company had to jump regulatory hurdles in South Africa as its drivers experienced threats from local metered taxi drivers who claimed unfair competition.

Uber organised a petition and accused the government of failing to ensure the safety of its drivers and passengers.

The company claimed that despite a number of discussions it had with the country's regulators and policymakers, including the police ministry at the time, there had been over 200 recorded incidents against driver-partners since the July 2017 meetings, and the company had not seen any meaningful interventions or arrests made.

Johannesburg Mayor, Herman Mashaba said his administration couldn't respond to the rising levels of violence between metered taxi and Uber drivers in the City.

According to the website that hosts the petition, the latest figures show just over 47 000 respondents.

Asked what the company's approach would be should it experience further regulatory difficulty in SSA, the company stated only that it continues to work openly with regulators.

Below are the company's numbers of riders and drivers in some African countries, as of September 2017 (SA has been updated):

• Sub Saharan Africa: 1.8 million active riders, 29 000 active drivers

• South Africa: 969 000 active riders, over 13 000 active drivers

• Nigeria: 267 000 active riders, 7 000 active drivers

• Ghana: 140 000 active riders, 3 000 active drivers

• Kenya: 363 000 active riders, 5 000 active drivers

• Uganda: 48 000 active riders, 1 000 active drivers

• Tanzania: 53 000 active riders, 1 000 active drivers

Lits said Uber has availed multiple vehicle financing programmes to drivers across South Africa, Kenya, and Nigeria, in aims to reduce barriers to credit and capital.

"Drivers have access to vehicle finance, the model provided is based on driver ratings and earning potential, as opposed to the norm of credit checks. The model was successfully expanded across SSA and is being tested in markets across EMEA."

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