Uber's innovations in Africa have helped shape its global operations



Since then, the rally tuning service has disrupted Africa's fragmented transport market, raised 1.3 million riders in sub-Saharan Africa alone and expanded its footprint to 15 cities in 8 countries, including North Africa.

But the journey has also been bumpy, marked by violent protests, price wars, regulatory challenges and accusations of a monopoly position.

Quartz spoke with, Ubers general manager for Sub-Saharan Africa Alon Lits, to discuss the company's struggles with drivers and regulators, its support for African innovation, and its determination to expand to more countries, including Rwanda and Ivory Coast.

Question: How big is Uber in his five-year operation in Africa?

Answer: South Africa was the first country for Uber outside the US, where we had three cities operational at the same time. Part of the reason why that happened and why the company has had an impact on the entire continent is the value we bring. If you look at the segments of the market that we are currently responding to, [they are] people who normally rely on their own private vehicle. Given our launch, suddenly for that segment market, there was now an affordable and reliable option for public transport.

The next piece is on the driver's side and unfortunately we know that unemployment is a reality in South Africa, Kenya and many of the cities and countries where we operate. I am convinced that Uber creates better and more meaningful economic opportunities for our driver partners.

It really is about looking at how people move in our cities. Is there something we are not currently looking for and how can we locate our product range to ensure that we can really be part of that mobility framework in our cities? In 2017 it really started to focus on getting those products right and getting those cities scalable and growing. In 2018 you introduced cheaper options in our cities, the first being the CHAPCHAP product in Nairobi, where we wanted to make sure that we could offer a cheaper product to drivers, while at the same time making the economy logical for drivers. Also launching the POA (rickshaw) product in Dar, and the BODA (motorcycle) product in Kampala.

Question: What does your expansion strategy mean in Africa? And which other locally popular forms of motorized transport do you consider?

Answer: For the cities where we are currently active, we always look for products that meet the needs of people in the city. For example Kekes [tricycles] in Nigeria. Is there a CHAPCHAP equivalent that we can introduce in Ghana? The following issue from an expansion perspective is clear for the existing countries where we are active: are there opportunities for us to launch in new cities? Perhaps that would be a launch with only a BODA product or just a tuk-tuk product.

And the last bucket would be expansion to new countries, we always look for opportunities. We do not have fixed timelines, but I can tell you that we are looking at Rwanda, Ivory Coast, Senegal and possibly Mauritius. We are very encouraged by the changes in the regulations we see in Ethiopia. When I think of the first type of geo-expansion, I do not think that Ethiopia will be part of it, but if we think a bit further into the future, it is certainly top of mind and something that we are going to be looking at more seriously in 2019.

Ask: What are some of the lessons that Uber has learned in Africa and that have been applied to his worldwide activities?

Answer: Cash is probably the best example of this. Nairobi was the second city for Uber worldwide to test cash as a payment method. We received consistent feedback from both riders and drivers that we needed to launch a cash option. That is why we launched a pilot in Nairobi, where we tested cash as an option for a period of two months, and it was incredibly successful. During that period of two months the company grew more than three times. Cash is now available in cities around the world and I think this was the most crucial or most impactful innovation, and I believe Africa has played a major role in driving the global money-making strategy.

In many cases drivers driving a vehicle do not have access to capital and then have to work for someone else. This means that they share the revenue they generate with the owner of the vehicle and that they only receive a part of that revenue. We hired a South African in 2015 to help us build a vehicle solution for Uber in South Africa. What this person did was work with financial service providers to say to them: "If you look at this person's bank statements because they receive only part of the rates they generate, they may not be eligible for a loan But if you look at their service record using the Uber app and you look at what their historical earnings were, what their appreciation was, how many trips he or she has completed, that almost becomes a proxy for a credit score. "took that approach and we did the first deal with WesBank in South Africa. We extended this to Barclays and Stanbic Bank in Nairobi.

Ask: Can you tell us which lessons have been learned from dealing with African supervisors?

Answer: I would say that the reception we have received from regulators is generally positive. If I could say what we could have done differently, I think that if we were to launch at first, we would launch in a city and then stand in line with regulators. While we are talking to supervisors beforehand, the first time they hear about Uber is not from a newspaper, but rather because we had a conversation, we explained the app and we explored ways we can use both.

Another big part is to ensure that we are involved with the existing taxi industry before the launch. Because from our perspective it is not really about Uber or taxi, but about Uber and taxi and how those two can coexist. Dar es Salaam is a good example of this. Many operators who use our technology come from the taxi industry, but use Uber during the downtime to increase their revenue.

Ask: How do you deal with the different preferences of drivers for cash versus card payments in African cities?

Answer: In South Africa, drivers were concerned about their own safety before accepting cash travel. They wanted to have the option of not getting money if they were not at ease. And they wanted a form of verification process for riders who registered with the cash payment. So what we introduced was for riders in South Africa who signed up with the cash payment option to link their Uber account to their Facebook account. And there are checks and balances that take place in the background to ensure that this is a legitimate Facebook account and not an account that someone has just created.

The next thing we did in South Africa was to introduce the cash indicator. So when the journey comes through, drivers can see that a card or money transfer. If the driver does not feel at ease with the location where the request comes from or if he is not comfortable with the money journey at that time, they can not accept that request and are not penalized in any way .

Cash is the majority for trips in both Nairobi and Dar, and so far we have not had a scalable way for drivers to reimburse their service costs to Uber. We recently entered into a partnership with a company called Direct Pay Online, where drivers now have a way of repaying the service to us, and they are indifferent to whether it happens in cash or with a ticket.

Ask: We did a story last year of a number of motorists in Nigeria with fake GPS to raise prices. How do you handle that?

Answer: It is clearly a violation of our community guidelines. That kind of fraudulent activity completely undermines the trust on which Uber is built. We have checks and balances in which our systems monitor fraud by both riders and driver partners who try to play the system. We have automated rules that cause this to be alerted if this is the first violation of the community guidelines or that accounts associated with that fraudulent activity are permanently deactivated, depending on severity. And if a driver reported this to us, and for whatever reason, if our system had not picked it up yet, we would make sure that the trip was fully reimbursed.

Ask: Fluctuating fuel prices have led to strikes of drivers in South Africa. How are these increases?

Answer: We offered drivers an incentive to complete a certain number of journeys per week and we would essentially cover the extra costs of what it would cost to fill the tank. Part of what we want to see is where the fuel price will go. Will this continue to increase and is it close to a historical record, or is it likely to decline? Until we get an idea of ​​this, we prefer not to pass on that cost increase to customers, but at the same time we want to ensure that drivers do not feel the pain.

Ask: How do you use local talent in Africa? And in what ways do you support local businesses?

Answer: There are many companies throughout the value chain that we try to reach with our driver partners. We have our greenlight hubs and something we are certain is that there can be suppliers who make goods and services available to our driver partners.

On the technical side, Nairobi was the first African city where we did Uber Pitch, giving entrepreneurs the opportunity to pitch for investors. Something else that we started in SA is what we call an Innovation Masterclass. This is intended for students who are still in school and who want to expose them to opportunities and offer them a broader insight into potential career paths that they can follow with a focus on science, technology, technology and mathematics.

In SA we have this collaboration with Aura, a local national network for response innovation. In Kenya we have a similar collaboration with a company called Flare, where they send out ambulances with the help of an app. We are therefore always looking for local partners who can offer value to both drivers and drivers and can look at ways to integrate with them.


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