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

Tuesday, May 19, 2015

In the traffic-clogged, potholed streets of Kenya’s capital city, there is a battle waging for the future of the African taxi ride that is pitting local startups eager to become the “Uber of Kenya” against, well, Uber.

The winner will help answer a question dogging those who work in technology in the developing world: whether chaotic, impoverished cities like Nairobi will create the tools that bring the “bottom billion” online, or if apps that have already taken off in the U.S. and Europe can be exported here.

Less than 20% of Africans use the Internet, according to the International Telecommunication Union, an industry group. However, the continent’s youth are increasingly getting online, creating an enormous potential market.

“Everybody’s playing for the future,” says Peng Chen, the American founder of Kenya’s Easy Taxi—a franchise of a company that started in Brazil and specifically targets cities in developing countries.

San Francisco-based Uber Technologies Inc. has faced lots of hurdles in its bid for rapid expansion abroad, but its adversary in Kenya isn’tregulators or taxi cartels—it’s companies that are betting they can build a more tailored mousetrap.

The two most-developed local services—Easy Taxi and another called Maramoja—say their apps offer better vetting of drivers in a high-crime city with few dependable ways to do background checks.