In a sudden move that has rattled the ride-hailing sector across Africa, Uber announced its withdrawal from Nigeria and Uganda this week. The decision marks the end of over a decade of operations in Nigeria, the continent’s most populous nation, and brings an immediate close to its services in Uganda. Following these exits, Uber’s African footprint is now limited to Egypt, Ghana, Kenya, and South Africa.
The San Francisco-based company stated that the retreat was confined to these two markets and did not signal a broader disengagement from the continent. “Our immediate priority is supporting drivers, riders, and local team members throughout this transition,” an Uber spokesperson said. This move follows a recent pattern of contraction, with the firm also exiting Ivory Coast and Tanzania over the past year, alongside a 10% global workforce reduction.
Despite its massive global scale, Uber has struggled to achieve profitability in many African regions. The platform faces intense rivalry from competitors such as Bolt, InDrive, and SafeBoda, which have carved out significant market shares in both Nigeria and Uganda.
For drivers, the exit comes at a time of severe financial strain. Across Africa, many have protested soaring fuel prices, inflation, and currency instability. A primary grievance has been Uber’s commission structure, which deducts between 20% and 25% of each fare. Drivers argue this model is no longer viable given the economic climate.
Abbas Olamide, a driver in Abuja, described the situation as crushing. He noted that for a 30,000 Naira ride (approximately €20), Uber takes 6,000 Naira in commission. After paying additional airport gate fees and parking costs to return to the city for another job, Olamide stated that the remaining earnings are insufficient.
Samuel Olatunji, a 43-year-old driver in Lagos, expressed similar dismay. He indicated that he will need to rely on multiple ride-hailing applications to generate income, though he warned that his take-home pay will not match previous levels. These concerns echo recent strikes by drivers protesting low fares and the impact of Nigeria’s fuel subsidy removal, which was further exacerbated by global oil price spikes linked to the war in Iran.
Ekemsit Effiong, a partner at Lagos-based consulting firm SBM Intelligence, explained the macroeconomic disconnect driving Uber’s decision. He highlighted that Uber’s cost base is linked to dollars, while its revenue is generated in shrinking local currencies like the naira. With double-digit inflation eroding purchasing power, fares had to rise to cover costs, but this made rides less affordable for average users.
“When Uber’s cost base is dollar-linked but the drivers’ revenue base is the shrinking naira, the maths stop working,” Effiong said. He noted that competitors like InDrive use negotiated fares, offering more flexibility than Uber’s standardized pricing model. Despite Nigeria’s ride-hailing market being valued at an estimated $450 million annually, Uber found itself operating on unsustainably thin margins.
The withdrawal has left users like Mary-Esther Anele in Lagos seeking alternatives, though she anticipates traveling less due to increased transportation costs. Uber’s retreat raises broader questions about the stability of ride-hailing services across Africa and potential ripple effects in countries like South Africa, where tensions between app-based drivers and traditional taxi operators have occasionally turned violent.
As Uber reduces its continental presence, thousands of drivers face an uncertain future, with many viewing the end of their partnership with the tech giant as the end of their livelihood in the sector.
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