How Uber is making inroads into South Africa
THE SHOW IS ON ROAD FOR UBER, the smartphone app that helps passengers hail drivers of swanky cars for hire, in South Africa. Users are swearing by it because it facilitates on-demand urban transportation – that means there’s no need to reserve in advance or waiting in a queue. For those who are tech-savvy, have a smartphone but no car, Uber offers this modern, posh and efficient way of travelling. There is no hassle of carrying cash on you either. Your card info is saved, after the trip you will just get out of the vehicle and go about your business.
The app introduces you to the chauffeur, gives you the make of your cab, its colour, license number, and even tells you what earlier passengers said about their experience being driven by the particular chauffeur. After choosing the cab, the app will let you track it, thereby saving you the anxiety of wondering when the cab will reach you. The built-in rating mechanism will let users and the drivers rate each other as well. Chauffeurs, who had repeated poor reviews will be removed from the platform. It also offers cool features like Spilt Fare, Surge. ETA (estimated time of arrival), and so on.
The challenges of underdeveloped transportation infrastructure, hectic commute, safety and security issues can be addressed by this next-generation cab hailing and transportation application. And this makes what Uber brings to the table particularly relevant in Africa.
— Mich Atagana (@MichAtagana) August 23, 2013
Seed-stage fund from South African investor
Uber is young in South Africa but it is a three-year-old company, which started out of San Francisco. The reception in Africa has been such that, soon after opening its account in Johannesburg, Uber is now connecting passengers with black and silver C-Class Mercedes-Benzs and other luxury cars in Cape Town and Durban as well. The company also has the seed-stage backing of South African investor David Frankel, founder and managing partner of the Founder Collective. At the recent funding round, Google Ventures has put in a quarter billion dollars.
Regarding the African operation, EMEA & India expansion head Jambu Palaniappan told YourStoryAfrica: “For us, each city is unique. For example, Johannesburg is very different from Cape Town. Our philosophy is to celebrate the city that we are operating in. That may mean a different type of car that can be requested via the Uber app, but the same reliability and user experience that an Uber user may get anywhere in the world. Our focus is on being reliable — getting a car to you as quickly as possible at any time, day or night. This particularly relevant in Africa, given that many of the alternatives people may use to get around are not as reliable.”
Thinking global while riding hyper local
Uber is all about empowering more driver partners to sign on to use the Uber system, and therefore bring Uber to many more people across the cities in which they are aggressively expanding. Uber clearly thinks global – they operate in 80 cities worldwide currently — but acts hyper local in each and every markets it gets in to. They believe in hiring the smartest and brightest locally.
The company has a playbook (wide-ranging compilation of strategies for surmounting obstacles on the local level). Going by the playbook, city managers are free do anything innovative to localize Uber. Their philosophy isn’t to look at the world country by country but city by city.
Going local brings its own challenges as local cabs start mushrooming and VCs start pumping in funds. Around the world, Uber has competitors like Lyft, Sidecar, Instacab, and Hailo in the US and Europe, and in India, Olacabs. In South Africa, there are Zapacab, Snappcab.
Jambu told YourStoryAfrica, “Our ambition as a company is to be in every major city in the world. Across Africa, there are several cities that we have our eyes on. We’ll keep the actual list to ourselves until the time is right. Take a look at the large cities across the continent and you can get a sense of where we want to be.”
Uber and the future
Giving what could be a glimpse into their future plans, Uber CEO Travis Kalanick, recently said: “The way we look at Uber is as a cross between lifestyle, which is, give me what I want, give it to me right now (instant gratification) and the logistics to get it to you.” That pretty much means before Amazon Prime Air (Delivery Drone) becomes operational to deliver, Uber would be delivering on-demand – what you want when you want. They have done a few good promotions, delivering ice creams in the scorching NY summer, flowers on Valentine’s day and so on. This Christmas season Uber is delivering trees. Going by it, you might never know what they would deliver next.
The other side of Uber business
On one side the Uber platform plays demand fulfillment role for users, but on the other side of their business is partner empowerment, managing relationships and empowering their drivers.
Jambu Palaniappan tells us: “Particularly in Africa, the empowerment of drivers to become entrepreneurs and business owners through partnering with Uber is something we’re very proud of. We look forward to continuing that.”
For now though, high demand and low supply will hurt the growth prospect and customer experience. For this Uber has devised a strategy to rise above its growing pains by launching a pilot program in the US to finance new cars for drivers to join its network. The company established strategic partnering with GM, Toyota, and financial institutions to offer 100,000 drivers and reduced monthly car payments. Clearly, it’s an impressive move to make more drivers become Ube’reneurs (Uber
Entrepreneurs). Similar programs in Africa could have significant impact on partner drivers, and how they build their own businesses on Uber platform. Drivers who couldn’t get credit to buy their taxi would be able to afford it because Uber’s big data & analytics would predict the income of well engaged drivers somewhat accurately — making it easier for banks while giving credit.