What is Uber up to in Africa?

Uber’s usual tricks -- to provoke price wars in an attempt to increase their share of markets, evade taxes, and undermine workers’ rights -- are alive and well in Africa.

Taxi driver in Accra. Image credit Paul Scott via Flickr.

Technophiles and liberals across the African continent are embracing the ride sharing application Uber. Their services are especially popular with the young urban middle classes. In most African cities, public transport is limited, unpredictable and often dangerous, especially after dark. Uber is also cheaper than meter-taxis. Uber’s mobile application makes taxi rides efficient and easy, and women feel safer since rides are registered and passengers rate their drivers.

Since 2013, Uber has registered drivers in 15 cities in nine African countries: from Cape to Cairo; from Nairobi to Accra. In October last year, Uber said they had nearly two million active users on the continent. The plans are to expand. While media continues to talk about how Uber creates jobs in African cities suffering from enormous unemployment, the company prefers to couch what they do as partnership: They have registered 29,000 “driver-partners.” However, through my research and work with trade unions in Ghana and Nigeria, and a review of Uber’s practices in the rest of Africa, I found that there are many, including Uber’s own “driver partners,” who have mixed feelings about the company.

Established taxi drivers rage and mobilize resistance to the company across the continent. While Uber claims to create jobs and opportunities, taxi drivers accuse the company of undermining their already-precarious jobs and their abilities to earn a living wage while having to cope with Uber’s price wars, tax evasion and undermining of labor rights.

Take Ghana, for example. Uber defines its own prices, but regular taxis in Accra are bound by prices negotiated every six months between the Ghanaian Federation for Private Road Transport (GPRTU) and the government. The negotiated prices are supposed to take into account inflation, but currently negotiations are delayed as fuel prices continues rising. The week before I met Issah Khaleepha, Secretary General of the GRPRTU in February, the union held strikes against fuel price increases. Uber’s ability to set its own price gives it a distinct advantage in this environment.

Like in most African countries the taxi industry in Ghana is part of the informal economy. Informality, however, is not straightforward. Accra’s taxis are licensed, registered commercial cars, marked by yellow license plates and painted in the same colors. Drivers pay taxes. Uber cars are registered as private vehicles, marked by white license plates, which gives them access to areas that are closed to commercial vehicles, such as certain hotels.

Uber is informalizing through the backdoor and pushing a race to the bottom, says Yaaw Baah, the Secretary General of the Ghana Trade Union Congress (Ghana TUC). The Ghana TUC, the Ghanaian Employers Association (GEA) and the government all support the International Labor Organization’s formalization agenda, which says that the formalization of informal economy will ensure workers’ rights and taxes owed to governments.

The fault lines in Uber’s business model have been exposed in other parts of the continent as well. In Lagos, Uber cut prices by 40% in 2017, prompting drivers to go on strike. Drivers have to give up 25 percent of their income to Uber, and most drivers have to pay rent to the car owners. Many drivers left Uber for the Estonian competitor, Taxify, which takes 15 percent of revenues. In February 2017, an informal union of Nairobi drivers forced Uber to raise their fares from 200 Kenyan Shillings to 300 (from 33 to 39 cents) per kilometer; yet still a far cry from a foundation for a living wage.

In Kenya, South Africa and Nigeria, the fragmented and self-regulated taxi industry is associated with violence, conflicts and criminal networks. There are reports of frequent violence and threats to Uber drivers. So-called taxi wars in South Africa, which began in the 1980s, have turned into “Uber wars.” In South African, xenophobia adds fuel to the fire sine many Uber drivers are immigrants from Zimbabwe or other African countries. In Johannesburg two Uber cars were burned. Uber drivers have been attacked and killed in Johannesburg and Nairobi.

The fragmentation and informality of the transport industry makes workers vulnerable and difficult to organize. However, examples of successes in transportation labor organizing in the past in some African countries, show that it is necessary in order to confront the challenges of the transportation sectors on the continent.

A decade ago, CESTRAR, the Rwandan trade union confederation, organized Kigali motorcycle taxis (motos) in cooperatives that are platforms from where to organize during price negotiations, and to enable tax payment systems.

For Uganda’s informal transport workers, unionization has had a dramatic impact. In 2006, the Amalgamated Transport and General Workers Union in Uganda, ATGWU, counted only 2000 members. By incorporating informal taxi and motorcycle taxes’ (boda-boda) associations, ATGWU now has over 80,000 members. For the informal drivers, union membership has ensured freedom of assembly and given them negotiating power. The airport taxis bargained for a collective agreement that standardized branding for the taxis, gave them an office and sales counter in the arrivals hall, a properly organized parking and rest area, uniforms and identity cards. A coordinated strike brought Kampala to a standstill and forced political support from President Yoweri Museveni against police harassment and political interference.

South Africa is currently the only country in Africa with a lawsuit against Uber. There, 4,000 Uber drivers joined the South African Transport and Allied Workers Union, SATAWU, who supported them in a court case to claim status as employees with rights and protection against unfair termination. They won the first round, but lost the appeal in January 2018. The judge stressed that the case was lost on a technicality. The drivers have since jumped from SATAWU to National Union of Public Service and Allied Workers (Nupsaw), and they will probably go to court again.

Taxi operators don’t need to join Uber or to abandon labor rights in order get the efficiency and safety advantages of the technology. In some countries, local companies have developed technology adapted to local conditions. In Kigali in 2015, SafeMotos launched an application described as a mix of Uber and a traffic safety application. In Kenya, Maramoja believes their application provides better security than Uber. Through linking to social media like Facebook, Twitter and Google+, you can see who of your contacts have used and recommend drivers. In Ethiopia, which doesn’t allow Uber, companies have developed technology for slow or no internet, and for people without smartphones.

Still, even though the transport sector in Ethiopia has been “walled off” from foreign competition, and Uber has been kept out of the local market, it is done so in the name of national economic sovereignty rather than protection of workers’ rights. By contrast, the South African Scoop-A-Cab is developed to ensure “that traditional metered taxi owners are not left out in the cold and basically get with the times.” Essentially, customers get the technological benefits, taxis companies continues to be registered, drivers pay taxes and can be protected by labor rights. It is  such a mix of benefits that may point in the direction of a more positive transportation future on the continent.

Further Reading