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Uber intensifies competition with expansion plans in East Africa

Approximate reading time: 2 minutes

Low-cost options have seen the American company excel in the East African market and seek to venture into new markets.

 

The taxi industry in East Africa is growing courtesy of the wide, hungry market for the services. Innovation and technology have come in handy in the wake of digital migration to spearhead economic growth. A number of taxi-hailing firms have ventured into the promising markets, offering business opportunities to the investors. Most have had their fair share of dominance and seek to expand their reach in search of green pastures. The increasing competition in the sector has compelled the companies to make do in order to remain in the race and lure more customers to their services.

Ridesharing company Uber made its debut in Kenya in 2015 and has experienced a series of success since its introduction into the Kenyan economy. The transportation network company has served the country’s capital effectively and expanded its services to Mombasa city, another region that has warmly welcome the services of the American company. Its dominance in Nairobi has eased its penetration in East Africa, namely Tanzania and Uganda. However, there are yet plans to venture into at least two more East African countries.

Low-cost services that were induced in its first appearance in Kenya such as Chap Chap worked well for the company. With the partnership of automobile company Suzuki, which provided its fuel economy car Alto, customers were able to afford the transport services. Its popularity grew over time, with Uber pocketing a substantial amount of revenue. The essence of low-cost services to lure more travellers to the business paid off and last year, the company had over 363,000 active riders in Kenya.

Despite massive competition from Taxify, Mondo Ride and Little, all operating in Kenya, Uber has remained vigilant and adamant to offer quality services at competitive prices. The company’s subsidiaries including UberEats and Motto, just a few have made the company rise above in the business environment. Uber recorded $6.5 billion revenue in 2016 owing to its successful operations worldwide.

Source: The Exchange

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