Ethio Lease this month became the first foreign-owned company to secure a financial services license in Ethiopia. Simplifying the country’s forbidding bureaucracy would help the country’s leasing market to reach its full potential.
‘We don’t sell rider details’: Lola Kassim, West Africa General Manager, Uber
Uber has made moves to grab a big market share in Ghana and Nigeria, but faces challenges from local operators and their host governments
Governments and trade unions around the world are hot under the collar about the ride-sharing app Uber. Lola Kassim will have to lean on her experience in the public sector, advising on policy and governance, to negotiate the sometimes rocky road in Uber’s third- and fourth-largest markets in sub-Saharan Africa: Nigeria and Ghana.
Kassim took up the role of general manager for West Africa in October 2017, overseeing operations in Accra, Kumasi, Lagos and Abuja. The Ivy League-trained professional began her career as a policy adviser in the Canadian government.
She spent a year advising the Liberian presidency on governance before joining McKinsey & Co. in 2014. “Engaging with regulators is one of our top priorities, we want to be able to provide the Uber service and Uber experience to as many people as possible in these countries,” she says.
Uber launched in Nigeria in 2014, and relations with the government started off well. They turned sour in late 2016, however, when the Lagos State government threatened to clamp down on Uber vehicles that were not registered with the transport ministry and thus not licensed as taxis. Lagos State also claimed the company owed N600m ($1.7m) for failing to properly register its business.
No smooth ride
The situation has been slightly better in Ghana, but it has not all been smooth sailing. The tech firm signed a Statement of Understanding with Ghana’s transport ministry in 2016 – the company’s first in Africa – to mark its launch in Accra.
But early this year reports surfaced online of a meeting with Ghana’s transport ministry, during which Uber was said to be ordered to rebrand its drivers’ cars as taxis.
Both Uber and the transport ministry denied the reported directive, though Kassim confirmed a meeting had occured. Since the ride-hailing service launched in the United States in 2009, the multibillion-dollar company has been at the centre of regulatory disputes around the world.
In December 2017, the European Union’s highest court ruled that Uber is a transport company and will be subjected to the same regulations as other taxi operators. This was a major blow for the disruptor, which had capitalised on its status as a digital service to circumvent transport industry laws and regulations.
Ghana, Nigeria, and Uber’s other African markets – South Africa, Egypt, Kenya, Morocco, Uganda, Tanzania – are not there yet, but the growing anger among local taxicab drivers is increasing the threat of such laws. In Ghana, taxi drivers accuse Uber of violating a local law that requires commercial drivers to pay a quarterly vehicle insurance tax, in addition to the ubiquitous accusation of stealing their passengers.
This is an opportunity for someone to earn a living, create their own small business and have a way to help support themselves and their families
The US-based firm has also been criticised by the International Transport Workers’ Federation for its treatment of drivers – Uber refers to them as “driver-partners” – who often lack basic employee benefits like healthcare and a minimum wage.
Kassim points out that the company has provided work for 7,000 and 3,000 active drivers in Nigeria and Ghana respectively, and that they are not employees but rather independent contractors. “This is an opportunity for someone to earn a living, create their own small business and have a way to help support themselves and their families,” she says.
Kassim says Uber has tailored its services to meet the unique challenges of each African city it operates in, which often include heavy traffic. In Lagos, the company increased its per minute and per kilometre fares in November last year – from N5.5 ($0.01) to N11, and from N55 to N60 – to better compensate drivers for the time spent in traffic.
The company charges drivers a 25% service fee, a standard in all of its markets. Earlier in October, the firm announced new app features for drivers, including the long trip notification and the ‘no thanks’ feature, which allows them to turn down trips.
And keeping drivers happy is essential. Competition in the ride-sharing industry has become increasingly fierce, with home-grown players fighting Uber for a piece of its pie. In Nigeria alone, there are more than a dozen Uber-style apps including main rivals Taxify and Oga Taxi.
These indigenous firms are fast changing the landscape of the sector, introducing additional features to stand out from the global brand: free WiFi on board, a built in SOS-button for emergencies, and driver/passenger liability insurance. New players have also successfully penetrated other Nigerian cities that Uber is yet to reach, such as Benin City, Port Harcourt, Abuja and Ibadan.
Kassim embraces the competition as a great way to motivate companies to do better: “At the end of the day competition […] forces everybody to up their game and innovate so that you can provide better quality of service and choice for consumers”.
Uber has launched a free tool called Movement to help improve urban planning
In addition to improving the app, Uber has introduced alternative payment methods in its African markets. “There are a lot of people who are still attached to paying things in cash. We made sure to introduce that option locally and it is popular both in Nigeria and Ghana,” says Kassim, who is not eying any regional expansions at the moment.
In June 2017, it was reported that the Egyptian government had requested access to Heaven, Uber’s internal software that provides live ride tracking and customer and driver data.
A similar request was made to its Middle Eastern arch-rival Careem. Both companies refused to comply, but the demand has raised concerns about future laws that could force ride-sharing companies to give out sensitive passenger data.
According to Kassim, such a move will go against Uber’s current policies: “We work very hard to protect the privacy of both our riders and our driver partners, and we don’t use or sell driver or rider details,” she says.
But the tech giant is open to some degree of sharing. It has launched a free tool called Uber Movement, which allows access to some of its aggregated and anonymised data on traffic flows, with the aim of helping policy-makers and regulators make decisions on urban planning. Johannesburg was the first African city to get Movement, in September 2017.
With 267,000 and 140,000 active riders in Nigeria and Ghana, Uber remains the dominant ride-sharing app in the region, and Kassim says there continues to be great potential for growth: “I think the uptake that we’ve seen in Nigeria and Ghana has been amazing, both riders and drivers have been excited to have more alternatives in terms of how to move around”.
Staying in the good books of local policy-makers will also be key moving forward.