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6 Reasons Why Uber May Fail In Nigeria

Updated on February 19, 2016

Uber was founded by Garrett Camp, the founder of StumbleUpon, and Travis Kalanick in 2009.The Company was unanimously supported to raise $200,000 in seed funding that same year.In 2010, Uber raised $1.25 million in additional funding.

Uber was founded as "UberCab" in 2009 and the app was released the following June. Beginning in 2012, Uber expanded internationally. In 2014, it experimented with various features and made other updates. Klout ranked the San Francisco-based company as the 48th-most powerful company in America in 2014.By late-2015, Uber was estimated to be worth $62.5 billion.

In 2014, Uber unveiled Ice Prince Zamani as the Rider Zero in Lagos, Nigeria signifying its launch in the largest city in Africa and most populous country in Africa-Nigeria. However, it has not been a roller coaster for Uber in Nigeria since its launch. Uber still remains latin to many people living in Lagos as they wonder what Uber is all about.

Perhaps some reasons have contributed to the snail growth of Uber in Lagos, Nigeria since its launch. This article will however try to highlight some.

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Low Advertisement Budget

I am not sure Uber had it in mind to hit the media in Nigeria during it launch rather they have leveraged on their global popularity to penetrate the Nigerian market. However, this does not appear to be successful as many people in the selected areas of operation in Lagos still don’t know what Uber is all about. The population in Lagos alone is about 20million, which is the largest business Hub in Nigeria. What could be the reason for the low profile of Uber in Lagos could be due to the limited number of partners that have shown interest in providing cabs for Uber taxi service in Lagos. Constant advertisement may mean having too many customers than the available cabs which will consequently result to poor service as Uber has no plans to have cabs of its own.

Uber does not currently own any of its cabs and does not payroll directly any of its drivers yet still have low budget for advertisement. Uber will definitely need to start taking bold responsibilities in order to retain its market share. Uber may not be able to eat all the cake and still have it for a long time in Africa.

Unrealistic Expectation from Uber Drivers

Some Nigerian Drivers who are currently driving for Uber have complained about Uber’s unrealistic expectation from them despite the meager pay often paid by Uber partners.

  1. Uber Nigeria has mandated its drivers to put on well-polished shoes and expensive formal clothing.
  2. Drivers are also mandated to constantly ensure that their mobile phone is well loaded with call card at all given time.
  3. Drivers are not allowed to accept tips from customers, etc.

This was found as unrealistic as many Uber Drivers in Nigeria are paid about N30, 000/month (Apprx. $150) by their partners. This is certainly a passive stream of income but cannot sustain anyone to fulfill these mandates as specified.

Unnecessarily Tedious Recruitment Process

To be qualified to drive an Uber cab in Lagos, you will need to undergo about 10hrs recruitment process. You will be made to undergo a written aptitude test and sometimes a driving test. All through this process you will never know what will be offered. This type of recruitment process often would have weeded out the older or even more experienced candidates.

Some candidates have lamented false promises by the recruitment agencies handling the recruitment process. The recruiters often promise of good pay only for the drivers to later find out that the pay is so low after going through the rigorous recruitment process. Some will have no choice than to walk away during or after the process.

Lack of Sense of Belonging for Uber Drivers

Working for Uber in Nigeria as an Independent Contractor requires that you learn to make friends with the app. Drivers are not allowed to come to Uber’s office for no reason-come what may. Drivers are also left to negotiate their own salaries with partners who often abuse this by offering Drivers very low pay. Uber has not set a minimum wage for partners to offer Drivers and will never negotiate pay on behalf of its drivers.

This is a deal breaking point as many candidates often back out when offer is made. Since you do not have anyone you report to except the apps and when you are yet to join Uber, you do not have access to this app so you are left in your own world during the salary negotiation. Even when you finally accept the offer to work for Uber, you solely rely on apps for communication in your subsequent operation. This has not been helpful for many as they do not have a feel of the sense of belonging for a company they work for.

Incomplete Contract of Service for Uber Partners

One would think Uber partners also make so much money on their fleet of car seconded to Uber. This is often not the case when you think of cost of maintenance and day-to-day running cost such as fuel, toll fee, etc. They are also made to have mandatory premium insurance on their cars. After bearing all these, they still have a percentage of their profits to share with Uber. However, many of these things are often not highlighted during the contract provided to partners in the first place. You do not get to know who is responsible for what at first.

Non Existing Customer Service

If there is anything that will slow down the growth of Uber in Nigeria, it will be lack of conventional customer service. Comparing Africa with developed countries like US when it comes to customer service is like saying ‘Bentley is just a car so also is Kia Spectra’. The need for human touch in customer service in Nigeria cannot be substituted with an app at this time. People need the assurance and the human factor for feedback and further clarification as issues coming up cannot not be totally ruled out during customer-driver relationship.

Except Uber re-examines its operation in Nigeria and re-position itself considering some of these factors, Uber may struggle to gain more market share in Lagos, Nigeria. Though Uber seem to have recently partnered with MTN Nigeria in order to increase its popularity but the question is; what does an average Nigerian know about Uber?

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    • Elesh profile image
      Author

      Elesh 21 months ago from the jungle of Africa

      Great comment. I am going to develop the challenge you included and make it the 7th reason.

      Thanks for your contribution.

    • Uberdriver profile image

      Uber Driver 21 months ago from Washington DC

      How about the reliability of mobile services? Last time I was in Lagos, the quality if service of mobile networks was a very serious problem with frequent network outages. This could come across as a challenge.

      With a significantly smaller proportion of people with credit cards in Nigeria compared to other parts of the world, I can assume that payment is an issue unless if Uber is using mobile money transfer.