By Paul Ndiho
Born out of the frustration of two Silicon Valley entrepreneurs trying to catch a cab in Paris, Uber services have flourished since being launched in 2010 and IS now offered in more than 450 cities worldwide.
With an Estimated worth of nearly $62.5 billion, Uber Technologies Inc. An American multinational online transportation company operates in over 66 countries and 450 cities worldwide. The Uber mobile app allows clients with smartphones to submit a trip request that’s then routed to Uber drivers nearby who use their cars to pick the customer. The service is giving the metered taxi industry a run for their money.
To get an idea of how Uber works, I signed up as Uber driver. This is an example of my actual Uber driver pay statement. But first, let me explain how Uber calculates ride fares.
When someone takes a ride with you, they are charged a fare plus a “Rider Fee.” The base fare for UberX in DC is currently $1.15, booking fee 1:35 + $1:02 per mile. If there is “Surge Pricing”, then the entire fare is multiplied by that number. Surge pricing means Uber increases the fare prices during certain times of higher demand, making these hours more attractive for drivers.
In Africa, Uber is already operating in more than five major cities. Alon Lits, Uber’s general manager for sub-Saharan Africa says convincing traditional taxi drivers to work for the ride-ordering service was an essential part of the company’s plans to expand across the continent.
“There is an enormous number of taxi operators on the platform in South Africa, a growing number in Kenya and a growing number in Nigeria and part of our strategy when we launch in new markets will be that engagement upfront with the taxi operators.”
Ruth Kagiri signed up with Uber in Nairobi to support herself as she pursued an acting career. With a return of about 400 US dollars a week, she was able to graduate from driving someone else’s car to her own, with a little investment from her dad.
“I am not afraid. Whatever happens, I need to work Friday nights; I need to work Saturday nights, and I do it the whole night till morning. Because I can’t afford to live in fear, this is my job for this season, and I have to do it, and those are peak hours you know. The security issue has not phased me; I just try to be very vigilant.”
Uber drivers around the world have faced threats and protests from regular taxi operators, who say cheap UBER fares are driving them out of business. Consumers are flocking to the service.
“What I typically pay my cab guy is around 7-800 Bob but what I paid to Uber was 500 shillings. So I cut down my cost by 300 bob, and that’s something good to me.”
Uber began making inroads into the Nairobi market by offering lower prices and cutting out haggling that often infuriates customers. Joseph Gitau has been driving his taxi for nearly 20 years.
“I have worked here for 17… 28 years. There are others who have been here for 30 years and over and that person cannot leave here. If a client loses something, they will still find it if they come back. That’s why I say our work is good.”
Uber’s experiment in Kenya to let riders pay fares with cash or via mobile money has boosted growth in Nairobi, where about 100,000 people open the Uber app once a month.
Gitau says his association is looking at ways of creating their mobile platform.
“Whether we like it or not, it seems we have to embrace technology. Because you have to concede when you realize that you cannot win a fight. We cannot fight Uber operators on our streets,”
Uber is facing increasing competition, as many other companies provide similar services. Whether they can maintain this sustained growth over the next couple years remains to be seen.