When planning to venture into any business and making it a million-dollar affair, it’s crucial to take the location where you are operating into consideration. The concept holds true when you are into the mobility business, whether you are a new player or experienced one pondering to expand your taxi business to different geographical locations.
In recent years the worldwide digital revolution has swapped the face of entire world economies. African countries are not an exception to it. Africa is facing a digital innovation boom with smartphone penetration. The internet users in African countries grew by 20%.
In recent times, Africa has emerged as a multi-wheeled ride-sharing market, and it has become a global affair now.
Uber, a big name in the taxi booking industry, is now setting its eye on the African countries. It’s worth analyzing the factors which make African countries a hot stop for taxi booking business startups.
Why Are Africa’s Ride-Sharing Markets a Hot Stop for Taxi Booking Business Startups?
The African region consists of many countries like Ghana, Guinea, Guinea-Bissau, Benin, Cape-Verde, Togo, Nigeria, Gambia, and Mali. There is a major development in the ride-hailing service in these countries in recent years.
Market Statistics of Taxi Booking Industry in Africa
African countries are like a gold mine for the online taxi business, and each taxi booking company wants to dig deeper to establish its business and earn better. The current market statistics also reveal the same. The total revenue in the online taxi booking business is expected to reach $ 447 million by the year 2020. Additionally, the annual growth rate is predicted at 20.4%, which will lead the revenue to climb to $939 million by 2024. So, the online taxi business is a booming economy with robust growth opportunities for sure.
Key Reasons Why Africa Happens to Be a Hot Spot for the Online Taxi Booking Business:
• Latent And Underdeveloped Public Transportation: one major cause of why Africa is not progressing at a rapid rate is because of its malnourished public transportation. A recent study proved that public transportation in Africa is a very costly affair, and Africans very often have to use public transit for commuting. They take two trips per day on public transport. Now, this sets an ideal stage for the taxi booking companies to make ample use of this opportunity by launching an affordable, comfortable online taxi booking app where people commute easily.
• The Low Car Ownership Rate: in 2014, there were a mere 35 cars per 1000 people across Africa. The number is meager and hints at how Africa lacks the necessary infrastructure. So, with a very low number of car owners, people will surely opt for public transportation for commuting. Affordable ride-sharing service is like a blessing to the Africans for sure.
• The Rising Number Of Mobile Users: mobile or smartphones have become part and parcel of every single being. The people in Africa are also multiplying in using mobile phones. In 2017, only 34% used mobile phones, which are expected to rise high to 79%by the year 2025. With the increase in the use of mobile and internet, it’s sure that people will resort to online services as well.
Challenges Faced by the Ride-Hailing Industry in Africa
The African ride-hailing market has enough opportunities to float in your online taxi business. Still, the existing market structure throws enough challenges to the players of the ride-hailing industry. Few key challenges are mentioned below:
• The first and foremost challenge was a monopoly by the local drivers. They charged unfair high charges from the riders. Uber also faces challenges by this practice of drivers as they continue to do so.
• The drivers also went offline to escape payment to Uber.
• Thirdly, there was a big question on the security of the riders. The riders were abducted, robbed by drivers. Such incidents made an unfortunate mark on Uber and other ride-sharing companies.
• The fare price scheme of Uber was challenged by the local drivers as their monopoly was no more in play. Additionally, the discount and offers would ignite the fire of rivalry even more.
So, it was not easy to set up for Uber in the African market. The African market had both opportunities and challenges. Uber, bolt, etc. grabbed opportunities and faced difficulties and came shining.
Uber Ventures Into the African Market for Expansion
Uber, the giant name in the taxi booking business, has set its eye on the African market. Surely and certainly, uber has studied the African market and found massive potential for its expansion there. Let’s elaborate it more for more in-depth and better understanding:
• Uber seems to be omnipresent. It had a strong presence in the south and east African region. It has 36,000 drivers in the sub-Saharan area. The western region, like Ghana and Nigeria, is left untouched. As per Brooks Entwistle, the chief business officer of Uber, the company is all set to embark on its expansion journey in western Africa.
• Uber found the sub-Saharan region just optimal for its expansion because of the low ownership of cars. The absence of a mass transportation system and rising population makes the case of Uber even stronger.
• To offer something more to its loyal clients, Uber, apart from then taxi ride service, is all set to launch boat service in Lagos. Lagos is a populated city which can be suitable for the Uber expansion.
Uber in Ghana, Its Growth, and Challenges Faced
• Uber entered Ghana in 2016, looking into its rapidly evolving ride-hailing market. The capital city of Ghana, Accra was in much need of reasonable taxi booking software solutions. Uber made its mark by providing convenient and cheap transportation. The local public transport in Ghana had a monopoly over price. But, Uber grabbed the trust of the people over thereby introducing a price scheme as per the distance. It was a real game-changer for Uber.
• Taxify emerged as a rival to Uber just after one and half years of Uber operating in Ghana. Taxify, otherwise known as Bolt in Ghana, was launched in December 2017. The Uber was no more a single player in Ghana. It faced big-time challenges from bolt online taxi booking app.
• After the arrival of the bolt, the ride-hailing market of Ghana witnessed many striking changes. Bolt launched its ride services at a much cheaper rate as compared to Uber ride prices. Thus, fares were one big factor that attracted more passengers to Bolt than Uber. The people of Ghana now had alternates to choose from.
• Interestingly, though Bolt happens to be a significant competitor of Uber, still Uber’s extensive presence and it is a household name in Ghana made it the first choice of people.
An Ultimate Step by Step Guide to Developing a Taxi Dispatch App for the African Market
As we have discussed earlier in the blog that the African ride-sharing market is booming. It has potent opportunities in store for enthusiasts. Let’s see step by step procedure to build a robust online taxi booking app as per the African market.
• Customization As per the African market: when in Japan, do as the Japanese do. Exactly, this holds true when building a taxi booking app, especially for the African ride-sharing market. It is wise to customize the app as per the local choices. The customization can be for the choice of vehicles. For instance, Mondo provides tuk-tuk or rickshaw, motorbike or car for riders.
• Allow Payment Is Cash: it is surprising to know that at least 50% of Africans are unbanked; that is, they don’t have a bank account of their own. So it’s imperative to allow them to pay in cash for the rides. When you are building a taxi booking app for the African market, then ask your taxi app development company to integrate features in the app to let users pay in cash for the fare. However, in recent years, Africans have their e-wallets like M-Pesa Etc.
• Affordable Rides: the major concern in the ride-sharing market was affordability. Uber, in this regard, launched uber ChapChap, which allows the riders to travel for short trips at just $1. Many other online taxi booking apps follow the uber trail poorly by implementing affordable rides. Thus, it is essential to make rides affordable to make your online taxi booking business a success.
Keeping in mind the above mentioned vital points while creating a customized online taxi booking app like Uber’s, centered around the African market will surely be a win-win situation for you.
Successful Taxi Players in Africa
With digitization peeping into the African market, many taxi booking companies started their online taxi booking app and turned out to be very successful. Let’s elaborate on the success of different taxi players in the African market:
• Uber: Uber stands out among the crowd undoubtedly. First launched in 2014 in Nigeria and 2016 in Ghana made its global reputation even shining. As of now, it is operating in Lagos, Abuja, greater Accra, and Kumasi.
• Bolt: initially known as Taxify is the very first taxi booking app based in Nigeria. It was launched in 2016 and one prominent taxi player in Africa. Bolt has an extensive presence in 20 cities across 15 countries. Bolt is Uber’s biggest rival.
• Mondo: launched in 2016 by Troles Anderson is one more Nairobi, Kenya based online taxi booking app.
• Oga Taxi: its Nigeria based carpooling service. It allows ride-sharing. It operates in cities like Lagos, Abuja, Port- Harcourt.
• Africa Ride: its south Africa based online taxi booking app. It was launched in 2017 and gained much momentum because of accepting payments via mobile services.
• Jekalo: launched in 2015, the platform served people, car owners, and riders as well. The app allows the car owners to provide ride service, and the passengers have to enter the trip information to fund taxi/cans simply.
• Hailer: Hailer app has competitive features like security, affordable trips, to compete with uber and bolt. Hailer markets itself as a local safe brand, so reach out to targeted audiences. It opens in South Africa only.
• Taxi Live Africa: taxi live Africa is the newest entry on the list. It was launched in 2019. The company aims to be a Pan- African service in the future. It was launched in Durban, now operating in many cities.
InDriver: it’s a Russia based online taxi booking app launched in the African market. It operates in Kenya, South Africa, Tanzania, Kampala, Uganda.
Final Words
I’m sure by now you might have made up your mind firmly to venture into the African market with your own brand of online taxi booking app and make it a big name. Yes, a lot is buzzing in the African market as far as the mobility industry is concerned. Taxi behemoths are now plunging into the ocean of opportunities in the African region to leverage their business and make huge profits. While local brands are fighting for share in the marketplace, global brands are also in the competition.
The booming economy has set the stage for the e-hailing services for sure. And the coming years will portray a better and clear picture of the ride-hailing company in the African market.
DepositPhotos – rideshare
