Continuing with its drive to adapt to the markets its moving into, Uber has brought in cashless payments in several of the new markets it is moving into. Ride seekers can now use Uber’s mobile application to hail a car in 12 cities spread across South Africa, Nigeria, Kenya, Morocco and Egypt.
We were expecting something like this after Uber CEO Travis Kalanick’s statement about making a big push in the African continent near the end of 2015. So the move is not much of a surprise, however the form it has taken certainly is. Instead of expanding its services across more locations as was being expected, Uber has instead chosen to strengthen its position in the existing cities.
Speaking on the topic and its reasons for choosing to incorporate cash based payments, Uber General Manager for Sub-Saharan Africa, Alon Lits, told TechCrunch
We are a global company but we take into consideration local things. We can’t enter new markets with a one size fits all mentality.
Upon the company’s rather radical approach to Africa, he added,
There are things that are truly Uber we absolutely maintain, but Uber Africa managers are empowered to adapt the business to local markets.
The shift to cash is reaping rich dividends for the company. For example, the shift to cash in Kenya has led to a three-fold increase in Uber usage in the country. Looking at it from the perspective of India, most people who don’t use Uber, do so because of an unwillingness or inability to use plastic to pay — instead of having anything against the company itself — so yes, moving to cash payments is probably a good idea.
However, however, Believe it or not, Kenya has the highest mobile payments use in the world, thanks to Safaricom’s M-Pesa product which has propagated the payment service to the corners of the African country. However, the company hopes that by introducing cash to the country, the company will be able to do better business.
Uber is also attempting to make sure that it’s services in the continent improve. The company’s mapping services across Africa are not as comprehensive across the continent as it’s other markets — understandably creating problems for its drivers. The company is now attempting to map inaccurate or non-existent postal codes, street names, or physical addresses by tying up with local startups, such as OkHi.
Rather than the Uber driver aiming for number, say, 7 Mombasa Road—which may not be mapped—he or she can aim for the white fence or green gates of the exact location as seen on a mobile device.
The company is also testing other stuff in the continent as well.
There are a lot of things we are testing in Africa, from ordering Uber cars to landmarks, to new security and crash protections, that could have relevance to our model across the globe.
Well, the cab aggregator already has a significant presence in most of the world, and its doubling down upon the places where it doesn’t — a sensible strategy by any standards. The company may also be looking into the alternative services that can be offered by its drivers, many of which are already up and running in places across the world.
We’re at a point now in most of our African cities where, on average, one can get an Uber car in five minutes or less. Given the logistics alternatives in those cities, if drivers can carry a passenger and a car effectively across distances, what else can those drivers carry?
Predictably, it has had to face significant opposition from local players, who see the company as a threat to the normal order of doing things. There have been protests, demonstrations and even violence. However, the company remains undaunted.
Uber charges about one quarter of normal fares and comes directly to the passenger so it’s good for consumers. It’s tough on the local drivers, but is forcing changes to the analog way of doing things.
The company will soon be expanding to other locations, including Ghana, Uganda, and Tanzania.