The struggles of multinational ride-hailing companies operating in Africa are far from over. Though there is a bump in demand for their said mobility services, these app-based companies are yet having a hard time adjusting to the regulatory and economic realities which now seem to be negatively controlling the continent’s commuting markets.
Just last month, it came to light that the United State’s Uber and Estonia’s Bolt were—and are still—struggling to operate smoothly in the South African market. Over not making any profit from their trips, drivers working with the two companies went on a day’s strike, took to the streets with placards, and demonstrated why the government’s intervention [regulation-wise] is now more paramount than ever.
The ride-hailing scuffle in South Africa might have also contributed to the exit of DiDi Chuxing, the Chinese multinational mobility startup backed by Masayoshi Son’s SVC juggernaut SoftBank—but that is an entirely different and equally ironic narrative.
At present, in the faraway Tanzanian market, Uber and Bolt appear to be running out of steam. In the East African jurisdiction, these two prominent ride-hailing companies, based on newly-sprung complications, are contemplating whether the route may be worth the taking.
Uber made its official entry into Tanzanian broadways in June 2016, starting from the capital city of Dar es Salaam. The launch, at the time, marked Uber’s 475th city, its 14th in Africa and 4th in the East African region after Kampala in Uganda and Nairobi and Mombasa in Kenya. With a 4 million populace and a people willing to embrace innovation, Dar es Salaam made the right takeoff point for Uber Tanzania.
As for Bolt, the service joined the convoy in 2017, seemingly following its biggest rival’s tracks to first launch in Dar es Salaam. From there, the service expanded [car-hailing and boda-boda offerings] to Dodoma, Mwanza, Arusha, and Zanzibar—in that particular order.
Unfortunately, after a few years of serving the private commuting needs of Tanzania’s busiest conurbations, both Uber and Bolt contemplate a cessation of operations. The reason for these chew overs? Tough regulations. While the situation has forced Uber to suspend activities indefinitely, Bolt is still at a crossroads.
In March, Tanzania’s Land Transport Regulatory Authority (LATRA) suddenly issued an order mandating ride-hailing actors to reduce their service charges to 15 percent, down from the 25 percent commission known to all parties.
LATRA also warrants all mobility companies to cut down on dead kilometers, which is typically the distance drivers need to cover before reaching passengers’ location(s). A part of the order points to a non-negotiable need for a platform dedicated to lodging complaints and settling driver-passenger disputes. Meanwhile, the watchdog doubled the set rate per kilometer due to hiked fuel prices.
According to Uber, its pull-over was decided after its attempts to inspire a review of the directive proved abortive. Bolt, on the other hand, seems to be hanging on a thin thread. Though the company’s efforts are vested in seeing to an adjustment of the fare decree, it is willing to shutter its car category if those efforts prove similarly futile.
Uber and Bolt’s Tanzanian travails are still ongoing, and only a reconsideration of the new set of rules would ensure that the market’s increased demand for ride-hailing transport does not go unexploited. in time, the outcome of this ruffle will be more easily determined.
In elsewhere African markets—from Nigeria to Ghana and from Kenya to Uganda—Uber and Bolt face other harsh actualities; either drivers are migrating to rival platforms, or a court ruling is in the works.