Cash is king for Uber’s expansion into Kenya

Kenya has become the fastest growing market in sub-Saharan Africa for mobile taxi service Uber with more than 1,000 drivers and cash payments a crucial factor in the growth of the app-based taxi service, according to Uber’s Africa manager. Uber’s Kenyan venture has faced fierce opposition from taxi associations and there have been attacks on Uber drivers and vehicles in Nairobi.

Kenyan taxi waiting for clients, Nairobi, 4 February 2016. SIMON MAINA / AFP

“We've been very encouraged by the response that we've received in Kenya, it's one of our fastest growing markets,” said Alon Lits, general manager for sub-Saharan Africa. “The turning point was the launch of cash.”

Interview: Alon Lits, Uber

Over 100,000 Kenyans are using the Uber application each month to request a ride, according to Lits, saying they have not released official statistics yet. The service was originally launched in Nairobi in January 2015 and recently expanded to Mombasa.

Offering cash payments as an option was a big draw for Kenyans. Uber ran a three-month trial period with cash payments in May 2015 and using hard currency was so popular it led to a doubling of their business, said Lits, "that growth has continued since that initial cash experience".

The majority of payments for Uber in Kenya are made in cash and exceed the number of rides paid for by mobile money service M-Pesa, said Lits.

Uber’s Kenya launch has not been without its problems - at least two Uber taxis have been attacked and burnt. There have also been reports of Uber drivers being harassed and intimidated by conventional cabbies, who say that Uber is operating unfairly.

Uber is registered as a technology company in Kenya and not subject to the same government regulations as taxi firms.

"We partner with licensed transport operators,” said Lits. “We've been fully transparent and engaged proactively with government stakeholders and we've really got nothing to hide.”

There is a lot of “misinformation” about how Uber operates, said Lits, who believes that the solution lies in active engagement with taxi operators.

"Uber is something which allows meter taxi operators to supplement their income, during their downtime, during their quiet periods,” he said, in a Skype interview from Johannesburg.

"We're a technology platform that really empowers the transport industry and transport operators, specifically small operators, to grow and scale their businesses in a way they couldn't before,” said Lits.

There have been calls from Kenyan taxi associations to have Uber brand all of its vehicles in order to create a level playing field and identify Uber cars who do not carry the same livery as conventional taxis.

“We don't think that is a necessary requirement, but if it is something that government feels strongly about, it is something that we would comply with," said Lits, pointing out that the Uber application provides the rider with details of the driver and the vehicle.

Uber is already operational in South Africa and Nigeria and there are plans to roll out the service in three more African countries over the coming months.

"We're exploring launches in Ghana, Tanzania and Uganda, and with those launches we'll be building an east African hub out of Nairobi, supporting our launch and growth in the east African region," said Lits. "There's huge potential across the continent."