Uber reveals its future is in the logistics market
Within a span of five years, Uber has grown to become the biggest taxi hailing company in the world and currently operates in over 600 cities across the globe.
Business Insider SSA recently sat down with Uber East Africa, General Manager, Loic Amado in a quest to understand Uber’s business model which has sometimes proven controversial and problematic.
Kenya is Uber’s fastest growing market and the second biggest in Africa after South Africa.
Since its entry to the Kenyan Market in January 2015, Uber has so far made more than 12 million trips locally in Kenya while globally; it has made more than five billion.
However, the journey has been bumpy for Uber in Kenya, some of its African markets and even global cities where it operates in.
Uber drivers have gone on a go slow on several occasions demanding for better renumeration from what Uber currently charges.
Uber takes a 25 per cent commission or one-fifth of the fare for every ride transaction a driver makes.
Some drivers feel this is exploitative but Amando is quick to explain the rationale behind it and how they arrived at the number.
“if you look at how we price a specific city or a specific market we have a pricing model that has been tried and tested in over 600 cities and based on that model and the different assumptions that we make the fuel price and maintainance costs we came to an optimum price that makes sense. But if there is a fuel price or inflation then we have a look again at that same pricing model and we adjust accordingly.” Amado said.
So in the face of labour strikes and crack down from some city council governments does Uber have any plans to change its business model?
“No no we feel very comfortable with this business model; it is the same business model all across the world.” Amado stressed.
Ten years from now while Uber may still be offering rides that will not however be the only venture it will have a stake in it.
“The future of Uber lies in logistics not just transportation, we have got a product called Uber Rush which is delivery and also Uber Eats which is food delivery , and so far they are doing super well across the world and now in 100 cities in just under two years.
We are also working on shared autonomous vehicles which is definitely the future because if you add the scales and you have a network of shared autonomous vehicles it reduces the amount of vehicles needed on the roads by more than 90 per cent.” Amado added.
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