Rideshare in Africa
Many African countries are moving toward urbanization. Residents are discovering that mobility is being limited by the overcrowding of roads and the lack of public transit. However, rideshare in Africa has quickly gained footing, bringing with it a new set of possibilities for the economies of the cities they serve.

Benefits For the People

Despite many countries in Africa boasting some of the fastest growing economies in the world, it is still home to 11 of the 20 countries with the highest unemployment rates. With the rapid growth of rideshare, there is an equally rapid need for drivers, providing jobs to tens of thousands of Africans in many of the continent’s major cities. Uber, an American-based company that has been servicing Africa since 2013, providing hundreds of thousands of people with rides.

Rideshare in Africa also alleviates some of the biggest transportation hindrances people in dense cities face. While Africa has quickly seen a surge of residents owning and regularly using technology such as smartphones, many still do not own personal vehicles. For those who do, the underdeveloped infrastructures of many African cities, most of which were not designed to hold the numbers they now contain, make driving difficult and impractical. Companies like SafeBoda, which started in Uganda but hopes to service various regions throughout Africa, are deploying “boda-bodas” (motorcycle taxies) instead of cars, allowing citizens to move about the city centers more easily and work in places previously out of reach.

Benefits For the Economy

Currently, almost 40 percent of Africans live in cities, and this number is expected to grow to 50 percent by 2030 and 60 percent by 2050. With this increase in population, there is a corresponding increase in demand for transportation that does not require a personal vehicle. Rideshare companies have set out to fill this demand, bringing with them foreign and domestic investors who see rideshare as growing in popularity among the people, bringing economic potential.

While Uber remains the top rideshare service throughout Africa due to its worldwide brand recognition and its ability to keep rates low, many African-based companies have been able to use their local knowledge to compete with the larger foreign companies. Kenyan-based rideshare company Mondo Ride, for example, understands that overcrowding in the city streets means that passengers taking rideshare cars would only add to the problem. Therefore, they offer the option for boda-bodas or tuk-tuks (three-wheeled motorbikes) in many of the cities they serve. This allows them to compete with giants like Uber, thereby bringing more investment into their city as they grow in popularity.

The Future of Rideshare in Africa

As rideshare in Africa takes off, it faces two battles that will shape the futures of both rideshare itself and the cities in which they operate: market competition and government regulation.

While local rideshare companies have the advantage of regional familiarity over the giants like Uber, the larger companies’ ability to lower prices threatens to make smaller African-based companies obsolete. In many African cities, there have been protests by these smaller companies, claiming that Uber is creating a monopoly over the industry, mitigating the positive economic effects of healthy competition.

 As rideshare continues to grow in Africa, local governments are struggling to regulate the industry. Ghana became the first to create formal documentation detailing Uber’s presence in its cities, but other countries have not been able to keep up with the high rate of growth this industry has seen.

Regardless of any frustrations with market competition or difficulties in regulation, rideshare in Africa is quickly becoming the norm. It is a sign not only that Africa is embracing technology but also that it is excelling in doing so. As rideshare companies and local governments begin to understand their local markets, residents will be better able to enjoy the benefits and the economic opportunities will continue to grow.

– Rob Lee
Photo: The Africa Report

Middle EastIt seems like every year, another company or app comes out that changes our lives and disrupts traditional businesses. Netflix changed movies and TV shows, Uber changed individual transportation and Airbnb changed the hotel industry. These new and innovative companies have allowed more people to access services that may have been out of reach in the past.

Now, this trend has taken hold in an unlikely place: the Middle East.

Currently, the two most prominent Middle Eastern startups in the region are Souq, an online e-commerce retailer and Careem, a ride-hailing service. While these firms are not based around wholly original ideas, the mere fact of their creation shows a desire for citizens in these countries to utilize smart technology to improve their daily lives.

Amazon’s acquisition of Souq in 2017 showed the effectiveness of the firm in the region, considering that Amazon’s modus operandi when entering new regions involves launching its own platform paired with a substantial investment component. The efficiency of Souq, however, allowed Amazon to make a direct buyout instead.

Startups like those seen in other parts of the world are sprouting up in the region regardless of the challenging economic and political circumstances they face. In 2016, the top 100 startups in the region raised over $1.42 billion, with each firm raising at least $500,000. But this does not come easily.

Many Middle Eastern countries do not have a conducive climate for startups compared to western Europe and North America. Bankruptcy laws and overregulation have stifled innovation for decades. However, the increase in startup firms in a variety of sectors shows a young, tech-savvy population that seeks to innovate and reinvigorate the economies of the Arab world.

Jamalon, an online book-selling firm, was started by a Jordanian who grew up in Palestinian refugee camps. Ala’ Alsallal saw a need for greater access to Arabic-language books for people in the region, especially works that are banned by various governments in the region.

“You know what the censors told me? ‘We don’t want any books that can change the way people think,'” Alsallal told Forbes Magazine. “That doesn’t matter,” he says. “We just keep sending them.”

Entrepreneurship with a social mission is common among startups, and it is no different in the Middle East, as shown by Jamalon. Average citizens are destined to benefit immensely from these companies. If this trend continues, the advent of Middle Eastern startups will increase access to services and will improve the quality of life for the people of the region.

Daniel Cavins
Photo: Flickr

Car loans in Africa

Uber, a popular ride-hailing phone app, is helping people in poverty obtain what is usually out of reach: a car. Drivers, like Michael Muturi in the Kenyan capital of Nairobi, have a chance to buy a new car through a bank loan program that uses data from Uber to assess risk. Muturi is one of many drivers who will be able to obtain car loans in Africa, changing the way people affected by poverty finance their cars around the globe.

“I felt like I won a jackpot,” exclaimed Muturi, after receiving an Uber message in June telling him his profile was good enough to apply for a car loan. “With my own car I will be able to afford a good house, take my kids to a good school, and save for the future.”

Kenya’s Sidian Bank has approved over 10 car loans for experienced Uber drivers using a model Uber hopes to expand across Africa, where poor customer data limits lending.

Uber’s mission is very different than that of car companies: the app wants more Ubers on the road by any means necessary, and the newer the car, the better.

Getting car loans in Africa is a major challenge for people and small business owners. Few people have bank accounts or a credit score to go with them so lenders can assess risk.The first credit rating bureau opened in Kenya in 2010. A lack of credit history is one of the reasons why just 4.4 percent of the 45 million population have a personal bank loan.

“Sidian’s financing is focused more on the applicant’s proven Uber experience than on his or her credit history,” says the bank CEO.

Uber’s app is a way for Uber drivers to obtain this data. The app registers customer satisfaction and provides the bank with information it needs to decide whether to offer Uber drivers relatively cheap loans to buy their own cars. To obtain a car loan from Sidian Bank, a driver must accumulate at least 500 trips with Uber and have an average passenger rating score of at least 4.6 points out of five.

Uber created Xchange Leasing last year as wholly-owned Uber subsidiary. For a $250 deposit, drivers in the United States can lease a new midsize or economy car. The car can be returned at any time with two weeks’ notice, and the customer just loses the deposit with no further obligations.

Similar to the ride-sharing business, auto financing also requires country-specific solutions. Uber started Lion City Rentals in Singapore, a subsidiary rental company, while in countries such as Kenya, India, and China it is mostly working with third parties like Sidian Bank.

By the end of 2016, Uber expects that the vehicle solutions programs will have provided 100,000 cars globally.

Uber is just one of many apps that are helping people improve their lives in poverty by making it easier for people to obtain car loans in Africa.

Alexis Pierce

Photo: Uber

A new wave of smartphone applications has facilitated transportation within South Africa. The first of these, Uber, is an application used worldwide that allows users to be driven to their destination in luxury vehicles. Though Uber is popular, it is less useful among the common South African population.

Uber set the stage for other transportation applications including Zapacab and Snappcab.

Zapacab’s founder, Rupert Sully, created the cab-hailing application in order to satisfy South Africans’ needs to use “their phones in smarter and smarter ways.” Zapacab is the first cab-hailing platform that was launched this past August and allows users to “zap” a nearby cab and receive a text message when the driver arrives.

Snappcab works in a similar fashion to Zapacab; however, it includes more safety precautions. Because public transportation can be used for kidnapping and abduction, it is important to ensure that the vehicle is a registered form of transportation. Snappcab makes this background check easier by providing the user with the cab driver’s name, photograph and vehicle photograph.

Users can also contact the driver directly and plot their trip on the Snappcab map. In order to ensure that the cab driver is not taking any unnecessary detours, the trip is recorded on the application. This technology could transform South Africa’s transportation system but will first require that the cab drivers be taught how to use the applications.

Sully of Zapacab ensures that “they [the drivers] are very comfortable with the whole concept that these markets are becoming more tech-savvy”.

Though cabs are a popular method of transportation, most South Africans use minibuses, buses or trains more often. The Innovation Hub, a community of innovative companies, has funded Snappcab and other transportation-related platforms in an effort to encourage the technological advancement of the cheaper forms of public transportation, including trains and buses.

Both Zapacab and Snappcab plan to expand outside of South Africa.

– Lienna Feleke-Eshete

Sources: ZapacabBBC NewsThe Innovation Hub
Photo: My Broadband