2.5C Scheepers, C. B., & Mamabolo, A. (2019). Uber Africa’s New Business Model Contextual Leadership of cash payments in Kenya (in press)
On September 30, 2017, Alon Lits, General Manager of Uber Sub-Saharan Africa (SSA)
Kenya of making cash payments available to riders.
such as managing driver-partners’ fears around safety when transporting possibly high amounts of cash and passengers at the same time.
The majority of Kenyans did not own credit cards and mistrusted e-commerce.
People
Uber’s General Manager of East-Africa, Loic Amado,
Alon Lits, General Manager of Uber Sub-Saharan Africa (SSA)
Background
Nairobi was indeed the second most congested city in the world after Calcutta,
Uber’s communication manager for SSA, Samantha Fuller,
Uber’s founder Travis Kalanick2
studied actuarial science and mathematical statistics,
INSEAD’s Singapore MBA programme.
graduate programme at Investec, South Africa,
Uber was founded in 2009 in San Francisco,
and expanded to France, the United Kingdom, Australia, Germany, Sweden and the Netherlands.
The service was initially called Black Car, an expensive premium service similar to a limousine hire service.
January 2015, Uber launched its service into Nairobi, Kenya.
started to manage the Kenyan and Nigerian businesses as well as that in South Africa. may 2015
Amado launched Uber in Germany, Croatia, Greece, Morocco, Egypt, Pakistan and then was in charge of expansion across sub-Saharan Africa. They launched Uganda, Tanzania and Ghana too.
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centralizing their teams to be as efficient as possible but whilst still ensuring local knowledge and resources on the ground.
INNOVATION BORN OUT OF NECESSITY
Uber started considering a cash option because of the keen Kenyans’ response
discomfort around the use of online credit card transactions
The magic of Uber was based on the fact that you could request a car to your destination and get out of the car
INFLUENCING GLOBAL UBER TO ACCEPT NEW BUSINESS MODEL
Lits and his executive team had to motivate the idea to the global executive team
A cash option would really complicate the product flow.
persistent convincing throughout the organization.-The pilots took place in Nairobi and Hyderabad, India.
Lits says he used available public data, which showed very low credit card adoption and credit card usage in Kenya,
Uber learned the importance of listening to customers and delivering what they required.
UBER’S OPENNESS TO INNOVATION AS A YOUNG TECH COMPANY
Lits realised that they had to adapt their product to local needs and not introduce a ‘one size fits all’ approach to doing business in all countries
As a relatively young, technology-driven company, Uber could use technology to measure things.
experimental and control groups and discovered that passengers with the cash option were converting and taking trips more often than those without access to this option.
Rider behaviour indicated that some passengers would first take a cash trip to gain trust in the system and later convert to the credit card option.
M-PESA PAYMENTS AT THE END OF A TRIP
More than 50% of the cash payments were riders paying through M-Pesa4.
In India, they had an integration with Pay TM which was a mobile wallet.
It was a massive opportunity in Kenya because nearly half of the GDP went through M-Pesa6.
EXPANDING CASH PAYMENTS TO OTHER COUNTRIES
roll it out in Nigeria in early 2016.
implement foreign exchange restrictions on many of their credit cards which presented challenges with credit card transactions
The fact that they had the cash solution, was actually a saviour for the business and that had not been the intention.
Uber then launched cash in South Africa in June 2016.
Having the cash payment option offered ways to reduce barriers and made the service more accessible to a larger market.
operating on the African continent, including Egypt and in Saudi Arabia,
CHANGING THE BUSINESS MODEL FOR LOCALISED SOLUTIONS
implementation of the cash system Uber changed the value proposition to their customers.
Uber realized that if they had not changed, they would have had a fraction of the size of the business they had currently, on the African continent as well as in India and Latin America
DRIVERS SAFETY CONCERNS
Some drivers were not comfortable accepting cash trips, especially in South Africa.
product called Cash Indicator,
also introduced a rider verification process,
However, it posed a problem, because some people were visiting who would not have ID numbers, so ultimately what they landed with was Facebook verification.
Another safety innovation was the way Uber used data to understand if a trip request may be risky. Variables considered included, time of day when an account was created,
GOING FORWARD
Uber Pool
In Mombasa there were more Tuk-Tuks (auto rickshaw) roaming around the streets than Nairobi. Introducing Tuk-Tuks or boda-bodas was definitely something they were investigating for that market in Kenya and had been on their radar for some time.