The world’s largest e-hailing firm, Uber has said that Africa is principal to its growth expansion plans inspite of concerns about profitability, noting that the company sees a very bright future in the continent. To this end,Uber has promised that it is firmly committed to the African market because it holds huge prospects for its growth strategy inspite of the growing competition by both global brands and emerging local services. With 2.7 million active monthly riders and just over 59,000 drivers, Uber says its commitment to the African market remains undaunted.
Since taking the plunge into Africa in 2013 with its first e-hailing service in Johanessburg South Africa, Uber has expanded into 14 cities in sub-Saharan Africa while consolidating its grip on major hubs such as Cape Town, Nairobi and Lagos. It has also started moving into ancillary cities such as Benin City in Nigeria, and Kumasi in Ghana with the broadening of its offer beyond the saloon cars that make up most of the markets. Recently it veered off its traditional market of car taxi’s to offer water transportation in Lagos Nigeria which shows its dexterity and ability to make adjustments to meet customer needs. This decision according to the company is because a that a lot is happening in the transit space with things like buses and waterways opening up as potential modes to overcome traffic restrictions and challenges.
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The Uberboat Lagos which is in partnership with the Lagos State Waterways Authority and Texas Connection Ferries is available on weekdays for now. It was a child of necessity aimed at helping majority of Lagosians who want to escape the ubiquitous Lagos road traffic snarl. In East Africa, Uber offers the UberBoda, a product allowing riders to hail motorcycle taxis, while UberPoa caters for the humble tuk-tuk (auto rickshaw) market. These flexible offerings show the company’s efforts to meet the expectations of local consumers informed the introduction and were informed by the culture of cash payments in a continent where credit card ownership remains low. This according to Uber was after analyzing feedbacks it got from its riders on the need for an alternative payment system.
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The company is aware that with all these changes, and also the fact that it is operating in a continent with more least developed countries (LCD’s) in the world, it will affect its profitability margin in the short to medium term, but with hope that all these innovations and flexible offers will become profitable in the long run. Behind the issue of profitability, the company also face the potential limitations of a commodified taxi product that could be undercut on price by competitors such as Lyft and Bolt (formerly Taxify) which made market watchers to speculate that Uber may eventually develop into an integrated platform for multiple transport and delivery services.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry.