Uber’s decision to leave Nigeria and Uganda will change the way thousands of drivers and commuters access the ride-hailing market, while giving competing platforms an opportunity to offer services that better respond to local market conditions.
The global ride-hailing company announced that it was ending its operations in both countries with immediate effect after what it described as a “difficult decision” following a thorough review of its business.
Uber began operating in Nigeria in 2014 and entered Uganda two years later. Over the past decade, the company established itself as a major player in both markets, providing transport services to commuters while creating income opportunities for drivers.
Its departure is therefore expected to have an immediate effect on drivers and passengers who have relied on the platform. At the same time, the decision creates room for other ride-hailing companies to increase their presence and compete for Uber’s customers and drivers.
The impact could be particularly significant in Nigeria, Africa’s most populous country, where ride-hailing has become an important part of urban transport in major cities.
However, Uber’s exit also reflects the difficult business conditions facing companies operating in the sector. Rising operating costs, pressure from drivers and increasing competition have made it harder for ride-hailing companies to maintain a balance between affordable fares for passengers and sustainable earnings for drivers.
Rising Costs and Competition Put Pressure on the Market
Uber drivers in Nigeria have for years raised concerns about the economics of working on the platform. Many have argued that fares are too low compared with the rising cost of fuel and vehicle maintenance, while commission charges reduce the amount drivers take home from each trip.
The issue has become more serious following changes in the country’s fuel market.
The removal of Nigeria’s fuel subsidy after President Bola Tinubu’s election in 2023 led to a sharp increase in the cost of living and placed additional pressure on motorists. The subsidy had kept petroleum prices relatively low for decades.
Motorists have faced further pressure this year following rising petrol prices linked to the United States’ war with Iran. For drivers who depend on ride-hailing as their main source of income, increases in fuel prices can have a direct effect on their earnings.
These pressures have not affected Uber alone. Other ride-hailing companies operating in Nigeria have also faced challenges, with drivers staging protests and taking industrial action over fares, operating costs and working conditions.
The market has also become increasingly competitive. International platforms such as Bolt and inDrive have expanded their operations, while several local companies have entered the sector in an effort to meet demand for affordable and convenient transport.
Uber’s departure could now give these companies an opportunity to increase their market share. They will be competing not only for passengers but also for experienced drivers who have already built their businesses around app-based transport.
For commuters, the change could result in more attention from competing companies as they seek to attract Uber users. Platforms may respond by improving their pricing, driver incentives, customer service and technology.
The challenge, however, will be ensuring that these improvements can be sustained in a market where both customers and drivers remain sensitive to price.
Uganda presents a similar opportunity.
Uber’s departure is expected to bring a major change to commuters in Kampala, where the company has been part of the city’s transport system for years. However, the market already has alternatives, including Faras, Bolt and SafeBoda.
These companies are now better positioned to capture customers who may be looking for alternatives after Uber’s departure. Their ability to provide reliable services at prices that work for both passengers and drivers will be important as the market adjusts.
For local mobility companies, this could be an important moment to demonstrate that African markets can support home-grown transport businesses that understand local conditions.
A New Phase for Africa’s Mobility Industry
Uber’s withdrawal from Nigeria and Uganda is also part of a broader change in the company’s African operations.
Over the last year, Uber has pulled out of Ivory Coast and Tanzania. With Nigeria and Uganda now leaving its network, the company will operate in only four African countries: Egypt, Ghana, Kenya and South Africa.
Uber said its decision should not be interpreted as a withdrawal from the continent.
“This decision is limited strictly to these two markets and does not impact our operations across the rest of the continent,” the company said in a statement to the BBC.
It added that it remains “committed to sub-Saharan Africa, where we continue to see strong growth and opportunity.”
The company’s decision comes at a time when it is also restructuring its global business. Uber Chief Executive Officer Dara Khosrowshahi has announced plans to cut the company’s global workforce by 10%, with the restructuring expected to affect more than 3,000 jobs.
Against this wider background, the decision to leave Nigeria and Uganda appears to reflect a review of where the company can achieve sustainable growth and make the best use of its resources.
Uber’s 12-year presence in Nigeria also included efforts to develop services specifically suited to the country’s transport challenges.
In Lagos, the company launched a boat service in 2019 to give commuters another way to travel around a city known for severe traffic congestion. Lagos is one of Africa’s largest and busiest commercial centres, but its long traffic jams regularly affect workers, businesses and economic activity.
The boat service demonstrated how ride-hailing companies could expand beyond traditional car-based transport to address infrastructure and mobility problems.
The end of Uber’s operations will now leave other companies with an opportunity to build on that demand and develop services that reflect the realities of African cities.
For drivers, the key issue will remain whether competing platforms can provide sustainable income as fuel, maintenance and other operating costs continue to rise. For commuters, affordability, reliability and availability will remain major considerations when choosing which service to use.
Uber has said it will support employees and drivers affected by the decision. Its help centre will also remain available to users in Nigeria and Uganda until 23 September to deal with outstanding matters.
While the immediate impact will be felt by Uber’s drivers, employees and customers, the longer-term effect could extend across the wider mobility industry.
