Moving from one point to another has never been easier and more convenient as transportation or mobility applications have come to play. In Tanzania, where internet penetration stands at around 25 percent, digital mobility services simplify transportation, thanks to Bolt and bber ride-hailing services.
However, this was not always the case, as in early 2022, Uber decided to leave Tanzania. Bolt also limited its operations due to regulatory concerns and the increase in transportation taxes imposed by authorities.
With population expansions in cities such as Dar es Salaam, Arusha, Mwanza, Kilimanjaro, and Dodoma, digital mobility services are again getting attention and usage over time and space.
Tanzania is witnessing the stark rise of locally developed solutions such as Paisha, Twende, and Linkee, which are challenging the status quo established by Uber and Bolt, which are progressively resuming their services.
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On a broad scale, the mobility sector in Africa is at a competitive pace, attracting other players from various regions. For instance, Egypt-based SWL is chiming into the sector with a unique value offering that stands to transform the way people and goods are moved over space and time.
According to a 2020 World Economic Forum report on mobility, the Egyptian-based start-up, founded in 2017 and already operating in five countries – is possibly moving into this space.
“SWVL has managed to merge tech with Africa’s established mobility offerings and capitalises on the efficiencies gained. The efficiencies are enjoyed on the supplier side, with better demand forecasting, market accessibility and certainty. The demand side enjoys planned rides, app-supported transactions and being able to book your seat. This solution, which addresses the gap between expensive on-demand ride-hailing and inconvenient, unreliable public transport, has been widely accepted by both its daily riders, as well as investors, raising over $80 million in funding to date,” the WEF report noted.
In that context, Tanzanian native mobility providers hold the potential to compete with Bolt and Uber, who have the majority of the market share.
Ride-sharing services are also bringing new hope for players in the transportation sector who were left out, including tricycles widely known as Bajaj and motorcycle riders locally referred to as Bodaboda.
In most cases, ride-sharing services operate better in environments where public transport is highly demanded, especially in urban areas.
Tanzania, just like other economies, is expanding its reach and changing policies and regulations, including transportation.
The impacted presence of Uber, had suspended its operations after the Land Transport Regulatory Authority (LATRA) brought online fares and an e-ticketing system that directed them to charge legal fees.
READ:Uber expanding in 8 more cities across Kenya, Nigeria and Ghana
Hence, the big question is—what does the future of digital mobility services hold for Tanzania?
On Thursday, April 14, 2022, Uber Tanzania suspended its services, causing unpleasant situations for middle-class city dwellers who relied on them.
After six years, Uber closed in Tanzania due to what the US-based ride-hailing company referred to as an unfriendly business environment.
“Current regulations on the transportation sector have created an environment that is not friendly and has been a challenge in our business,” Uber said in an email statement.
The departure of Uber in Tanzania consequently led to Tanzania’s ride-sharing landscape being empty without strong competitors. In March 2022, Bolt left the market, citing “government regulations changes” enforced in the same month to affect their business.
The latter brought a wave of other actors in the sector, including Paisha and Linkee, who added new services, including good delivery, something extra that Uber and Bolt didn’t offer. After negotiations between the Tanzanian authorities, Uber and Bolt are set to resume service fully soon.
At the moment both ride-hailing platforms are operating in Tanzania along-side other locally developed services (Paisha and Linkee).
READ:Bolt raises US$716 million to speed up expansion plans
Uber – Riding to the future in Africa
Taking big players to the stand, Uber for instance, there is much to be learned for upcoming ride-hailing services—Paisha, Linkee and many others to come. Striking balance between offering safety, convenience and affordability is essential.
Uber has expanded across 30 cities in Africa. This represents something bigger than just likeability of the services, it shows Uber services work best and attend to costumers needs.
In September 2022, Uber unveiled a series of products and features for sub-Saharan African users. The ride-hailing service offer an additional line of services UberX Share in Ghana and Nigeria, and Uber ChapChap Share in Kenya, allowing riders to save up to 30 percent of the trip fare when matched with another passenger headed in the same direction.
UberXL will also launch in Nairobi, Kenya, letting up to six people share a ride. South African riders can now reserve their group travel 30 days in advance with UberXL Reserve and Uber Van Reserve.
The future of ride–sharing is hinged on safety because over time serious security concerns have rocked cities of Africa.
According to Pymts a global news hub for fintech, between the start of 2020 and the mid-point of 2021, 124 rideshare or delivery drivers were victims of carjackings or attempted carjackings, while more than 50 app-based drivers have been killed on the job in the last five years, according to advocacy group Gig Workers Rising.
On the other hand, Uber which celebrated 1 billion trips in the region, argues that Since entering the market in 2013, it has created over 6 million economic opportunities in over 50 cities across the Sub Saharan Africa region.
Today, the market stands to expand even further for companies that bring both safety and convenience. If local bodaboda’s and bajaj riders, along with native mobile transport companies do increase, Uber as well as Bolt’s position in Africa may be challenged. The aim for such entities is to evolve with the interest of the people in those respective nations. The only other alternative is whether regulatory agencies will cooperate with foreign entities, thus breeding a healthy economic environment.
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