Ride-hailing in Africa is having a tough time 🚕

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On the morning of July 14th, as Nairobi came to life, Anthony Ochieng’ turned the key to start his Suzuki Alto.

An Uber driver in the city, Ochieng’ would usually be picking up passengers by now.

But today was different.

He was heading out to join his fellow drivers in a five-day strike against Uber and Bolt.

The drivers had come together to fight “unfair treatment” from the two ride-hailing companies.

Fuel prices were climbing fast, but fares hadn’t budged much over the years.

Instead, the two companies had a long history of price wars, driving fares into the ground to win customers.

Then there’s the commission.

For every shilling a driver makes, ride-hailing companies take no less than 18%, plus a tax.

They were fed up with these outdated pricing models.

So, what did they want?

• An increase in minimum fares from $1.40 (Ksh180) to $2.33 (Ksh 300)

• Lower commissions

• And a voice in setting prices.

With the strike on, drivers were turning down rides and missing out on their daily earnings.

And now this protest has evolved, hitting customers in a whole different way.

Unhappy with Uber's rates, some drivers are now setting their own prices mid-trip without telling passengers.

When customers push back, they lock them in and demand more money, with a few drivers even becoming violent.

Ride-hailing apps were meant to make getting a cab safe, super easy and open up new opportunities for drivers.

So, how did we end up here?

A Chicken-and-Egg Problem

Since 2016, ride-hailing drivers in Africa have been hitting the streets over the same issues: brutal hours, low pay, and unclear pricing.

It’s a familiar story all over Africa. Nigeria and South Africa have seen more driver protests lately.

But like in Kenya, the talks that follow these protests haven’t made much difference.

It’s a classic chicken-and-egg dilemma that feels familiar for marketplaces like Uber.

On one hand, customers are looking for a hassle-free ride, away from a chaotic public transport system.

On the other, you have drivers with cars ready to help them out.

So the app connects the two and takes a cut.

To make it work you need to balance having enough drivers and customers.

In Africa though, there’s an additional layer of complexity.

Sure, there’s a massive opportunity in the mobility space, because …

1. Cars are expensive to buy upfront. For every 100 Africans, only 3 will own a car.

2. Public transport, which should be the alternative, is low-quality and ineffective.

Global ride-hailing giants, like Bolt and Uber, have made multi-million dollar commitments to launch in Africa.

But if they only focused on customers who can afford their usual prices, they'd have a pretty small user base.

They’ve had to slash prices and pull users away from public transport to grow their reach.

Bolt gives huge discounts — sometimes up to 90% off.

In Kenya, where the average monthly income is just $156, these low prices are a big draw.

Last year, as Bolt marked a decade in Kenya, they boasted a tenfold increase in trips since their launch, finally hitting 100 million rides.

But it’s come at a huge cost to drivers

In developed countries, gig work like ride-hailing is often a side hustle to make extra money.

In low-income countries like Kenya, Nigeria and South Africa, things are different.

High unemployment has caused an oversupply of drivers chasing a small customer base.

Because of this, drivers are locked in a battle for each ride, and forced to take lower fares.

Many burn out juggling multiple apps and long shifts to make ends meet.

And when the ends fail to meet, that frustration spills over to customers.

A former Uber employee tells us the pressures have pushed drivers to their breaking point.

“It’s the hard truth, but drivers are logical here. If customers feel the pinch, won’t Uber and co. be forced to do something? Let’s understand what brought them here.”

Because they work as independent contractors, they don’t get health insurance and pensions.

And costs like fuel, insurance, car maintenance, and parking fees come out of their earnings.

Sadly, no one thinks of this when setting fare prices.

Where do we go from here?

Ride-hailing companies should work hand-in-hand with their drivers.

If they won’t, governments can step in and make them.

In 2021, the UK Supreme Court ruled that Uber drivers should be treated as employees, not independent contractors.

This means getting a minimum wage backed by the law.

Germany and New Zealand have also shown that finding common ground with drivers is possible.

Why should it be any different for African drivers?

They rely on these jobs, so telling them to just “leave the app” when they're unhappy isn’t the answer.

A win-win solution in Africa is possible

In Kenya, a local ride-hailing company shows what can happen when both sides work together.

Compared to Uber and Bolt, Little Cab is a smaller company.

It’s backed by Safaricom and is seen as a homegrown hero.

(We profiled Little Cab last year, so you can read more about them here.)

But building closely with drivers and riders has helped it punch above its weight.

For each ride, Little Cab only takes 15% commission from drivers, and the fares are slightly higher too.

One driver juggling all three apps says, "I always give Little Cab rides priority. I’ll happily pass up Uber or Bolt rides to take a Little Cab gig.”

So, happy driver-happy rider plays out perfectly for Little Cab.

The price transparency for both parties makes sure drivers don't feel exploited.

Ride-hailing has opened up huge opportunities in Africa.

It gives people who can afford it a better option than public transport.

Now it’s time for drivers in this gig economy, like Ochieng’, to make a living wage.

And frankly, it shouldn’t take strikes or putting customers at risk to get there.

How can Africa’s gig economy for drivers be regulated better?

Hit reply and let us know.

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