Uber is embroiled in crisis in most parts of the world but not in Lagos. Here’s why

Uber is always in the news but it is not just because of the pace with which it is growing; the on-demand ride service does not have too many friends. From taxi unions in Paris, London and Berlin, to the family of a rape victim in India and President Dilma Rousseff in Brazil, who says Uber is costing Brazilians jobs, Uber has suffered series of criticisms in its six years of existence. Even Uber’s drivers are at its throat; they recently took legal action against the company in the UK. But is the world being fair to Uber?

“Uber is complicated because it takes jobs away from people … it leaves taxis with less work,” Rousseff said while answering questions from a reporter in August. “It’s not an easy issue. It depends on the rules of each city and state, because it is not a federal government decision.”

Brazilian capital Brasília, São Paulo and Rio de Janeiro have all moved to ban the taxi-hailing service; although no ban has taken effect yet, as authorities weigh the pros and cons of approving it. A Brazilian court had banned Uber in April after complaints by a taxi drivers’ union. The court also ordered Apple Inc., Google Inc., Microsoft and Samsung Electronics to prevent further installation and use of the app by Brazilian residents. But the order was revoked weeks later.

French president, François Hollande shares Rousseff’s sentiment. He said in June, that the low-cost UberPOP should be illegal, as violent protests by taxi drivers erupted in the capital. The service was stopped in July. Two senior Uber executives will appear before a Paris court in February 2016 on charges of “misleading commercial practices” and “complicity in the illegal exercise of the taxi profession.”

Uber protests
Thibaud Simphal (C), manager of Uber France, and Pierre-Dimitri Gore-Coty (R), general manager for Uber western Europe, arrive at the courthouse for the start of their trial in Paris, France, September 30, 2015. REUTERS/Philippe Wojazer

In China, there has also been a clampdown on Uber. Its offices in Guangzhou and Chengdu have been raided this year, and its official account blocked on China’s biggest social network WeChat. Uber’s chief executive Travis Kalanick alleged that the messaging app censored positive news about Uber.

While Uber has suffered torrid times in North America, Europe, Asia and even the Oceania, it managed to maintain its growth and has expanded to Africa where the controversy has only continued. The company which has been in South Africa since 2013 has faced several battles this year, from assault of Uber drivers to the threatening of passengers. The Metered Taxi Council of South Africa has also insisted that Uber drivers get the necessary licences and comply with the rules and regulations guiding public transport like other drivers. But Uber has continued to claim that it is not a transport company, only a Smartphone application.

“Our technology is open and pro-choice and we are keen to offer it to a broad number of taxi drivers to boost their occupancy rates and chances for profit. In fact many metered taxi drivers are already using our technology to boost their incomes, and we would welcome more who wish to join their colleagues,” Uber’s general manager for sub-Saharan Africa Alon Lits was quoted by htxt.africa to have said.

But in Lagos, Africa’s most populous city where more than 8 million people commute daily, Uber is having it good. The company which launched in the city just over a year ago said its app has created more than 600 job opportunities which could grow to more than 3,000 by the end of 2016. As part of plans to make this dream a reality, Uber has signed agreements with South Korean carmaker Kia Motors Corp. and Nigeria’s Access Bank Plc. Under the deal, drivers will be able to buy new vehicles with a down payment of N95, 000 ($477). The balance would be payable over four years.

Uber has not faced any serious resistance in Lagos and it is unlikely this will happen any time soon.

Apart from market size, Uber is going to enjoy business in Lagos for a long time because most of the traditional taxi operators in Lagos are not aware of Uber, and the taxi companies that know them are not ready to put up a fight.

Niyi Oguntoyinbo, CEO of Metro Taxi, whose company has a fleet of over 600 cars, recognizes the Uber threat. However, he seems unwilling to fight off the competition.

Oguntoyinbo who spoke on Changing the face of taxi services in Nigeria at the Urban Mobility Africa conference on September 28, sees nothing wrong in Uber’s operation as an aggregator but with the company now securing low-cost deals for drivers to own their own cars, the Metro Taxi CEO is worried. He wants the government to do something about the emergence of Uber considering the fact that licensed taxi operators pay for everything; from licenses to car parks and Uber doesn’t. He also urged taxi companies to cooperate to build their own aggregator to fight off Uber.

But another taxi company Red Cab, is not going to allow Uber to put it out of business. The company’s 400 Red cabs work 24 hours a day, 7 days a week. Acknowledging that the traditional method of hailing taxis and online booking through a web portal cannot help any company to compete well with Uber, Red Cab is launching The Red Click App on October 31, to run on Android and Apple devices. With this, Red Cab will be hoping it would have done enough to stand up to Uber without the dirty war and messy confrontations witnessed in other cities.

Uber is not concerned. For now, the challenge Uber is trying to overcome in Lagos is Smartphone illiteracy and poor mapping conditions.

The California headquartered company is the subject of ongoing protests and legal action from taxi drivers, taxi companies, and governments around the world. The argument is that the venture-backed startup creates unfair competition to taxis because it does not pay taxes or licensing fees, it endangers passengers, uses untrained drivers, as well as unlicensed and uninsured cars.

Uber protesters in yellow shirts listen to city council debate over new taxi regulations in Toronto, Canada September 30, 2015. Toronto City Council is set to vote on changes to taxi regulations that could regulate ride-hailing app service Uber. REUTERS/Mark Blinch
Uber protesters in yellow shirts listen to city council debate over new taxi regulations in Toronto, Canada September 30, 2015. REUTERS/Mark Blinch

To many of those that are against Uber, it is breaking the law. But to those who love it, the car-hailing app is a disruptive technology that is challenging the premise of car ownership.

However, Uber seems to be learning from its struggles. The company which launched January 2015 in Nairobi, Kenya’s capital city uses taxi companies with fleets of well maintained taxis serving corporate clients. This model can save Uber the troubles it faces in several cities across the world. It is expected that established taxi companies would, with or without Uber, adhere to local regulations.