NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Tuesday, March 14, 2017

Entry of the mobile technology ride-sharing service, Uber, into passenger transport markets across the world has brought disruptive competition with substantial benefits to consumers. Africa is no exception.

Uber is currently the dominant ride-sharing app used in Africa. It has rapidly grown its African footprint and now has operations in eight countries; Egypt, Ghana, Kenya, Morocco, Nigeria, South Africa, Uganda and Tanzania.

Disruptive competition through technology can bring substantial benefits to consumers, but it also raises competition and socio-economic issues. These result mainly from the displacement of traditional service providers. These issues cannot be ignored in a developing country. Regulation needs to at least ensure that conditions for competition are consistent and not only free but fair across competing services where possible.

There are also concerns that Uber, with its first mover advantage within the ride-sharing market, is growing into a monopoly despite the benefits to consumers. These concerns have been raised by incumbent taxi operators in Kenya and South Africa. As is the case across the globe, traditional metered taxis are seeing red.