Africa’s Electric Ride-hailing Regulation Is On The Slow Road
Ride-hailing giant Uber has recently disclosed that it is currently in regulatory talks with several African governments, as the company looks to inspire the formulation of policies that would favor its intended introduction of electric vehicles in the region.
Frans Hiemstra, the regional general manager for Uber’s operations in the Middle East and Africa, speaking at an event in Cairo, said the platform is actively looking to make governments in Africa more aware of the upsides to electrified transportation. The company seeks to help develop a see-through regulatory framework that will prepare the continent better for the transition.
Uber’s lobbying efforts are in line with its global commitment to become a net zero-emission mobility service.
As part of its Green Future initiative, the company looks to spend USD 800 M on the cause—supporting thousands of drivers in their switch to battery-powered automobiles. In Africa, it became partners with Go Green Africa, a group of organizations pledged to accelerate the continent’s green economy changeover.
No doubt Bolt, its biggest rival, will ply similar routes. The company, which recently surpassed 1 billion rides on the continent and plans to invest €500 M (~USD 547 M) in the industry, has began preparing for electric car offerings in South Africa and Kenya back in 2021.
However, given the dynamics currently at play, getting many African markets regulation-ready for electric vehicles will be a lot more than a leisure drive in the park.
Though a few governments like Rwanda and South Africa have earnestly begun their electric trips to the future, many nations to date allow the importation of over-15-year-old four-wheelers with substantially low emission standards.
According to a 2020 report by the United Nations Environment Programme (UNEP), 40 out of 49 countries in the Sub-Saharan have little to no strong used-vehicle laws.
As a result of this, while other continents race to an electric future, the region risks becoming the last bus stop for the world’s rejected combustion vehicles. 40 percent of used cars exported from various parts of the world end up in Africa, a threat to Africa’s electric transport journey given that fairly priced EVs would strugglingly compete with regular low-cost alternatives.
Limited regulatory intervention leaves adoption as a matter of whether or not electric vehicles are affordable and available. A McKinsey report predicts that used car-dominated segments will transition much later than generally expected (until after 2035).
Even in South Africa where EVs have made inroads on the back of actual demand, high prices and lack of charging infrastructure slow down adoption, according to the 2022 AutoTrader mid-year industry report.
Besides, the growing EV startup ecosystem—front-lined by names such as Nigeria’s Metro Africa Express and Rwanda’s Ampersand—have a focus on two-wheelers, a much faster way for the market to accelerate the adoption of electric mobility. These startups do have their fair share of challenges.
Moreover, African transport regulators have a love-hate relationship with ride-hailing service providers, as do some of the drivers working with them. From Nigeria to Kenya, South Africa, Tanzania, and Cameroon, authorities have interfered with Uber and Bolt’s operations to allay the fears of drivers and help better protect passengers.
In some cases, ride-hailing platforms have had to suspend their services, and in some others, partner drivers embarked on strike actions to protest unfair treatment and low earnings. Given these events, the ride-hailing industry’s relationship with regulators in the continent has been rocky at best.
As such, the path to getting governments to create EV-friendly policies is hardly a clear one. The right environment, given the current regulatory complexities, is at least a decade away from reality.
