Africa’s on-demand transport space has evolved since the San Francisco-based rideshare company Uber first settled in South Africa in 2013, paving the way for its foray across the continent while radically transforming the entire taxi industry.
Almost a decade later, Africa’s taxi industry is now dominated by dozens of local and international on-demand transport hubs, the latest additions being global giants Didi Chuxing from China and inDriver from Russia.
Seeking to get ahead of its rivals, Chinese giant Didi is expanding across the continent, stepping up competition for market leaders Uber and Estonia-based Bolt. Evidence shows it is preparing to enter Nigeria, having started operations in South Africa in March and Egypt last month when the company posted a job offer for a driving center manager in Lagos – the same position he originally advertised for when entering South Africa and Egypt.
A key indicator of the imminent expansion of the company in Nigeria was hidden in the lines of responsibility of the head of the control center: “working with operations and the Didi team to support the successful launch. “
Didi did not respond to several requests for comment from TechCrunch on its expansion plans in Africa.
Didi is one of the largest carpooling services in the world. However, unlike its global rivals Uber and Bolt, which years ago viewed Africa as a key market in their quest for global domination, the Chinese company has so far held off the continent.
Founded in 2012, Didi has around 600 million users in 17 countries in Africa, Asia, Latin America and Russia. The company also has more than 15 million active drivers per year.
In addition to launching other mobility platforms, Didi now owns minority stakes in other global platforms – US Lyft and Uber, Indonesia Grab, Egypt Careem and India Ola . He also acquired all of Brazil’s 99.
As Didi begins his foray into Africa, the Russian inDriver is strengthening its presence in the same markets, where it has recently started collecting commissions from drivers.
Unlike other taxi apps which have a one-sided billing structure, inDriver allows passengers to negotiate travel costs with drivers, making it popular among taxi users.
Taxi drivers in Nairobi, the capital of Kenya, using inDriver, which rolled out its services to Africa in 2018, have received notifications in recent days from the company confirming the introduction of a 9.52% commission for each. journey made. The commission is lower than Didi’s 13%, although both are well below Uber’s 25% and Bolt’s 20%.
InDriver deduced that it was introducing a fee due to the increased demand for the service, but it was keen to keep the commission lower than its competitors. The app was launched about three years ago in several markets in Africa, including South Africa, Nigeria, Tanzania, Morocco and Botswana, with the promise of a commission-free first year. The company has only just introduced commissions in some of these markets, although the deductions are already in place in Nigeria and South Africa.
In a notification sent to drivers in Kenya, inDriver said that it “has become a notable event in the passenger transport market in Nairobi. Many people use it daily and their numbers are increasing. This major work requires significant costs. To cover these costs, we introduce payments for each order in the amount of 9.52%. In order for inDriver to remain profitable for both passengers and drivers, the amount of payments is lower than for others services, where payments can range from 15% to 30% of each order.
The new update comes as the company plans to expand into different markets, having already diversified into the messaging industry.
The company launched its delivery business in April last year, at the height of the pandemic, to meet demand for parcel delivery services. The messaging services listed on the app include auto, football and motorbike, and are available in over 16 countries. The company is now introducing freight services to different markets around the world.
Founded in 2013 by Arsen Tomsky, inDriver is currently available in 34 countries and recently passed the 100 million downloads mark.
By joining Didi to intensify competition in Africa, market pioneers Uber and Bolt are expanding their range of services in cities across the continent.
Currently, Uber is rolling out Pool Chance, a feature that allows passengers going in the same direction to share the cost of the trip, in Kenya, with the intention of offering the service at low cost in Ghana and Nigeria. The company says rolling out budget services is part of its plan to attract price-sensitive users.
Across the continent, Uber has expanded in recent months into new regions and introduced new products as part of its strategy to retain existing customers and attract new ones amid increasing competition. Earlier this month, the company entered two additional cities in Nigeria – Ibadan and Port Harcourt – bringing service already available in three other cities to the regions.
In South Africa, Uber is now available in 40 cities, serving 80% of the urban population, with Uber Comfort, UberX and UberBlack premium services and UberGo economy service. It recently expanded to 21 new cities and added a feature last August that allows travel to be booked one month in advance.
The company plans to continue investing in African cities through collaborations with national and local authorities.
“We know that we face significant competition between local modes of transport in Africa. These are dynamic and competitive with many viable alternatives, including carpooling, personal cars and public transport, which consumers can choose from and have a choice, ”Frans Hiemstra, Managing Director of Uber Sub-Saharan Africa.
“We believe that competition makes us better, which improves service for our runners and our employees, ”he said.
Uber is still king in terms of combined market share in Africa; it claims to have around 150,000 drivers in its eight markets across the continent, while Bolt comes in second.
Bolt was aggressively extend its services in Africa. The firm plans to rolling out electric taxi options in South Africa four months after introducing e-bike food delivery services in Johannesburg and Cape Town. Bolt also launched its food delivery service in Nigeria last month.
Like Uber, Bolt sees a myriad of opportunities on the continent.
“We see that there is room for several players across the continent. The infrastructure and experience we have accumulated with our ridesharing business provide us with a good platform to expand and diversify our services, ”said Paddy Partridge, Bolt’s regional director for Africa and the Middle East.
For new players like Didi, it will be an entry into a market faced with drivers and partners demanding better working conditions.
In Nigeria and Kenya, Uber and Bolt both faced a series of protests earlier this year, with their drivers expressing unhappiness over the rideshare companies’ decision to increase their commissions, despite users being overloaded with charges. price increases. However, no notable changes were made by either of the two companies in line with the drivers’ requirements.
Didi’s operations elsewhere were not without drama. Before going public on the New York Stock Exchange this year – nine years after operating as a private startup and raising $ 25 billion from investors – the company backed by Alibaba, SoftBank and Apple has been the subject of close scrutiny by the Chinese government and regulators. He was accused of using anti-competitive pricing and practices and of misusing users’ personal information.
Didi’s fallout with China is just one of many struggles she has faced this year. Trying to compensate for the problems at home, the company sought to enter the UK market, but the move was greeted by concerns in the UK Parliament that China could collect data from Brits using Didi’s service. However, it appears that its entry into African markets has gone well – and could explain why it wants to keep its operations silent: to avoid scrutiny.