Uber has had things easy in most African cities it has expanded to — except for attacks by local taxi drivers — but now a formidable force in Kenya is backing a rival that will launch in three weeks.
Kenya’s biggest telecoms company Safaricom is teaming up with local software firm, Craft Silicon, to launch a ride-hailing company, Littlecabs, to take on Uber.
“It is effectively a rival for Uber,” Safaricom CEO Bob Collymore told Reuters in an interview. “It is a local competitor which will be cheaper and better for the local community.”
Uber began operations in South Africa in 2013, its first market in sub-Saharan Africa. It had since expanded to four more countries, the latest being Ghana where it launched this week. The American company also plans to expand to Tanzania later this month as it continues its expansion on the continent. So far, no local firm offering similar services has been able to edge out Uber, with attacks by taxi drivers the only significant challenge the company has faced since launching in Africa. Not anymore. Uber is set to face its first real fight in Africa.
A rival backed by Safaricom in Kenya is a worthy rival Uber should be wary of. The telecoms company, 40 percent of which is owned by Britain’s Vodafone, is investing in Craft Silicon in search of new sources of revenue. It is therefore expected to go all out to ensure the business is a success.
Safaricom will help in developing the application and also offer the network connectivity, as well as put Wi-Fi in vehicles that will be signed up on Littlecabs. The telco will also use its mobile-phone based financial service M-Pesa to process payments, according to Collymore.
Although Safaricom remains focused on its core businesses of calls, text messaging, internet and M-Pesa, Collymore says the company will not hesitate to go into partnerships that have the potential of bringing more revenue for the company
“When M-Pesa was launched it wasn’t launched as a big thing. It was just launched as a thing that was right in the edge. Now it is 20 percent of (Safaricom’s) revenue,” he said.
The next couple of months will be very interesting, as we see Uber and Littlecabs battle it out. It will also be interesting to see how taxi drivers react to the emergence of “cheaper” Littlecabs, as they have often complained that Uber’s cheaper fares affect business.