The U.S.
car-booking company has signed agreements with the South Korean carmaker and
Lagos-based Access Bank Plc to
reduce the down payment required for new vehicles to 95,000 naira ($477)
from almost 200,000 naira, with the balance payable over four years,
Alon Lits
said: “Since we launched in Lagos just over a year ago,
more than 600 job opportunities have been created using the application. That’s
really just the beginning. We feel that the number can be well over 3,000 by
the end of 2016. Uber, which connects drivers with passengers via its
smartphone application in more than 300 cities, is seeking partnerships that
will reduce costs for new drivers as the San Francisco-based company expands in
Africa.”
Uber, which
was founded in 2009, doesn’t own vehicles or employ drivers, and existing taxi
companies in cities including Paris, Moscow and Johannesburg have protested at
what they consider to be unfair competition.
Challenges
According to
Alon Lits, the challenges facing Uber in Lagos, the first sub-Saharan African
city to have the service outside South Africa, include congested traffic and
poor mapping quality. Another is that a relatively small proportion of
Nigerians know how to operate a smartphone well enough to manage the trips, Ebi Atawodi, general manager for Uber
Lagos, said in a chat with Tectono Business Review.
While
Nigerian active mobile-phone subscriptions rose about 14 percent to 148.5
million in the year ending July, according to the Nigerian Communications Communication, fewer than 10 percent are for smartphones,
or Internet-enabled devices. Nigeria is Africa’s most populous country with
more than 170 million people, of which about 21 million live in Lagos.
Alon Lits
revealed that to address the issue of mapping, Uber is working with other
technology companies on ways to direct drivers without access to conventional
directions. In the Kenyan capital of Nairobi, Uber is carrying out tests with a
local company that is developing ways to send pictures of locations, rather
than just addresses.
He said: “Unlike in more developed markets, you often don’t have an
address where the driver will be able to get turn-by-turn directions.”
Huge Opportunity
Alon Lits
stated that Uber’s growth in Lagos can match the speed of take-up in South
Africa. The company’s drivers in Africa’s most industrialized economy have
taken passengers on more than 2 million journeys this year, compared with about
1 million in 2014, the company said in July.
Besides
Johannesburg, the company also operates in Durban and Cape Town. Lits sees the
number of South African drivers growing to about 15,000 by the beginning of
2017 from 2,000 now.
“Lagos is three times the size of greater Johannesburg,”
he said, referring to its population. “It’s a huge
opportunity here.”
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