Uber has announced its withdrawal from Nigeria and Uganda, bringing an end to its operations in two key African markets and raising fresh questions about the sustainability of ride-hailing businesses on the continent.
The global ride-hailing company said it had taken the “difficult decision” to leave the two markets with immediate effect following a comprehensive review of its operations.
Uber entered Nigeria in 2014, initially establishing itself as a major player in the country’s fast-growing urban transportation market. Two years later, it expanded into Uganda, where its services became particularly prominent in the capital, Kampala.
The exits come amid mounting pressures across Africa’s ride-hailing sector, including soaring fuel and vehicle-maintenance costs, pressure from drivers over low fares and commissions, regulatory challenges and intensifying competition from both international and local platforms.
For Nigeria, Uber’s departure marks a significant shift in a market that has become increasingly difficult for ride-hailing operators and drivers alike. Drivers have repeatedly complained that fares generated through ride-hailing apps have failed to keep pace with the rising cost of fuel, vehicle maintenance and general living expenses, while platform commissions have remained a major source of contention.
The difficulties have been compounded by the removal of Nigeria’s longstanding petrol subsidy in 2023, which triggered a sharp increase in fuel prices and substantially raised the cost of operating vehicles for commercial drivers.
The latest development also comes as Uber’s global chief executive, Dara Khosrowshahi, announced plans to cut the company’s workforce by 10%, signalling a broader period of restructuring for the technology-driven transportation giant.
Uber has already retreated from other African markets. Over the past year, the company withdrew from Côte d’Ivoire and Tanzania, leaving Egypt, Ghana, Kenya and South Africa as the remaining African countries where it operates.
In a statement, Uber stressed that the decision was restricted to Nigeria and Uganda and would not affect its operations elsewhere on the continent.
“We remain committed to sub-Saharan Africa, where we continue to see strong growth and opportunity,” the company said.
A Changing Nigerian Ride-Hailing Landscape
Uber’s 12-year presence in Nigeria saw the company expand beyond conventional car-hailing services as it sought to address some of the country’s unique transportation challenges.
In Lagos, Nigeria’s commercial capital and one of Africa’s most congested cities, Uber launched a boat service in 2019, offering commuters an alternative means of navigating the city’s notorious traffic gridlock.
Its exit, however, comes at a time when Nigeria’s ride-hailing market has become significantly more competitive.
Bolt and inDrive have expanded their presence, while several indigenous operators have also emerged to compete for passengers and drivers. Yet the growing number of platforms has not eliminated the fundamental challenges confronting the sector.
Drivers across the industry have staged protests and industrial actions over fares, commissions, fuel costs and working conditions, highlighting the widening gap between what passengers are willing to pay and what drivers need to remain profitable.
The pressure has created a difficult balancing act for ride-hailing companies: increasing fares risks driving passengers away, while keeping prices low can make the service increasingly unattractive to drivers.
Uganda Faces Similar Disruption
In Uganda, Uber’s exit is also expected to reshape the urban transportation market, particularly in Kampala.
However, the gap created by the company’s departure could quickly be absorbed by competing platforms, including Bolt, Faras and SafeBoda, which already have established operations in the country.
Uber said it would provide support to employees and drivers affected by the decision. Its help centre will remain available to users in Nigeria and Uganda until September 23 to address outstanding concerns and issues arising from the closure.
The company’s withdrawal from the two markets underscores a broader reality facing Africa’s digital transportation economy: market size and rapid adoption alone are no longer enough to guarantee sustainability.
For operators, the challenge is increasingly about finding a viable balance between affordable fares for passengers, sustainable earnings for drivers and sufficient margins to maintain profitable platforms in economies facing persistent inflation and rising operating costs.
-Source: BBC