Ride-hailing is driving EV adoption

November 12, 2024

From the newsletter

Frans Hiemstra, Uber's GM for the Middle East and Africa, has outlined big EV adoption plans for South Africa and other markets. He told the Business Day newspaper that Uber will accelerate its EV rollout across Africa, aiming to be fully electric by 2040. Uber’s moves will put pressure on competitors such as Bolt to follow suit.

  • Ride-hailing companies are increasingly popular across Africa. There is also a growing demand for last-mile delivery.

  • Uber is actively working towards a more sustainable operating model by way of strategic partnerships and initiatives tailored to specific markets.

More details

  • Uber operates in over eight countries in Africa, including Kenya, South Africa, Egypt, Nigeria, Tanzania, Uganda, Ivory Coast, and Ghana. 

  • However, they are not the only players in the African market. There is a presence of other international ride-hailing companies like Bolt and other local players.

  • The ride-hailing market in Africa is expected to reach $2.01 billion in revenue by 2024 and $3.39 billion by 2029 and the number of users is expected to reach 268.2 million by 2029. 

  • The urban segment of the ride-hailing market is expected to see the largest growth, as people prefer to take taxis to get to their destinations.

  • These companies' mode of business, particularly with electric motorcycles, has been attractive to riders who want to save more. Typically, an electric motorcycle enables riders to save up to 40%, and consumers pay roughly 75% of the cost they would pay for a fuel vehicle.

  • Both Bolt and Uber have set sustainability goals targeting carbon neutrality by 2040.

  • Uber is collaborating with various stakeholders, including governments, EV manufacturers like BYD, and charging infrastructure providers. 

  • To incentivise drivers to switch to EVs, Uber offers financial support, such as subsidies for vehicle costs and incentives on rides, making EVs more accessible and affordable.

  • Furthermore, Uber invests in driver education programs to raise awareness about the benefits of EVs and provides training on operating and maintaining electric vehicles.

  • Uber has seen success with its EV motorcycle (boda boda) program in Kenya, where it plans to roll out 3,000 electric motorcycles.

  • In South Africa, Uber is piloting electric package delivery services, expanding its sustainable offerings beyond passenger transportation. 

  • Addressing concerns about grid reliability and load shedding, Uber is partnering with EV OneStop to pilot solar-powered charging infrastructure in South Africa.

  • Uber incorporates gamification into its app, allowing riders to track their carbon emission savings when choosing green ride options. 

Our take

  • Where there is demand, sales follow. Africa's demand for motorcycles is big, and this demand keeps growing with urbanisation. Electric motorcycles have proven themselves capable of meeting demand and offering riders greater savings, and this demand will only increase.

  • Ride-hailing companies have formalised the motorcycle taxi sector, introducing measures like background checks for drivers, standardised fares, and digital payment systems. This has increased accountability and customer trust through features like ride tracking and driver identification within their apps.

  • EVs are expensive, so to scale up adoption, ride-hailing companies need to partner with asset financing companies. Additionally, government policies could help promote adoption by providing tax credits and exemptions to EV riders and drivers.