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An Uber in South Africa update

I’ve written before about Uber and how I thought it was a bad idea in South Africa (read about it here). I’ve used the service in both Joburg and Cape Town and have been suitably impressed by the service. You request a cab on your phone, they call you to confirm and then pick you up. Simple and easy. In Cape Town the pricing was totally different making the service both affordable and easy. In Joburg though the minimum cost per trip was R85, making it quite expensive. Things have changed and these are the new prices:

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This is an Uber bad idea

A recent job posting by Uber.com shows the service is coming to both Cape Town and Joburg according to this job posting. If you’re like me you’re probably thinking: “what the hell is Uber.com?” Here are the details:

Uber is a venture-funded startup company based in San Francisco, California that makes a mobile application that connects passengers with drivers of luxury vehicles for hire. The company arranges pickups in the San Francisco Bay, New York City, Los Angeles, Seattle, Chicago, Boston, Washington, D.C., Toronto, Paris, Berlin, Philadelphia, Dallas, San Diego, Amsterdam, Atlanta, Denver, London, Melbourne, Minneapolis–Saint Paul, Munich, Baltimore Phoenix, Stockholm, Sydney, Baltimore, Detroit, Milan, Sacramento, Rome and Singapore.

 

Uber drivers have cars such as Lincoln Town Cars, Cadillac Escalades, BMW 7 Series, and Mercedes-Benz S550 sedans. Cars are reserved by sending a text message or by using a mobile app. Using the apps, customers can track their reserved car’s location.

 

Uber has indicated it is planning to expand operations to include non-taxi ridesharing in the near future.

Considering they’re taken the service to large parts of America, Europe, Australia and some parts of Asia I guess they’ve run out of places to try market the service. It’s great to see a massive startup looking at South Africa and Africa as a whole to enter however I wonder if someone forgot to do their homework. While it’s technologically a great product (you hail a car with your phone) and it’s going to be a good employer for drivers and the tech industry I’m skeptical.

With our complete lack of public transport you’d think that Uber would make a lot sense however there are two major issues here:

  1. South African’s love their cars: We spend fortunes on buying, maintaining and showing off our cars. Ownership of a car is for some, more important than a house.
  2. Cars are expensive in South Africa: Cheapest BMW 7-series in the US is $77,000 or about R800,000. Locally the cost of entry is just over a million.

Uber have money, they recently ended a $50 million funding round but the target market might be problematic. High end cars equates to high end consumers, the type who may have an iPhone probably would rather make a call than use an app to get a taxi. The other issue is that you load your credit card once and then it’s automatically billed after the trip. I’m pretty sure the average South African has the attitude of “you want to me to load my credit card with who?”

I’m fairly certain this will come down to the person who manages to run the project. A good Country Manager could make this work but anyone less than amazing and the service will flounder.