Uber to use EVs in South Africa

From the newsletter

Uber is planning to introduce electric vehicles to its ride-hailing and delivery services in South Africa in 2025, according to Nakampe Molewa, Uber Eats GM for Sub-Saharan Africa. The company in July partnered with Chinese EV maker BYD to deliver 100,000 EVs across its countries of operation globally. 

• Uber operates in 60 cities in Sub-Saharan Africa, including 21 in South Africa—its biggest market—and four cities each in Kenya and Nigeria.

• The company aims to have 10–15% of its vehicles globally to run on batteries by 2027. It targets 100% of rides and deliveries globally to be in zero-emission by 2040.

More details

• Uber has a strong presence in South Africa, with over 20,000 drivers and delivery partners serving more than 2.1 million active users. The country boasts one of the largest ride-hailing markets in Africa, projected to reach $443 million by 2029, with an annual growth rate of 5.26%. To capitalise on this potential, Uber wants to transition to electric vehicles to increase driver earnings and promote sustainable transportation.

• This EV strategy is multifaceted. Uber plans to launch a pilot program with 200 electric vehicles in South Africa, drawing on lessons learnt from its Uber Green initiative in Kenya, where it has successfully deployed electric motorcycles. Its partnership with BYD aims to take the scale of EV adoption in its business to another level. It has also partnered with local e-mobility players in South Africa, like Valternative Energy to develop charging infrastructure and source electric scooters.

• Beyond ride-hailing, Uber is diversifying its services to include food delivery through Uber Eats, bringing direct competition to food delivery companies like Glovo. It also has a dedicated courier service and Uber Safari, which caters to the tourism sector. To ensure a smooth transition to EVs, it is collaborating with NGOs, government agencies, and private sector partners.

• This shift towards electric mobility is not unique to Uber. Its competitor, Bolt, also plans to introduce electric taxis after introducing e-bike food delivery services. Both Bolt and Uber have launched electric motorcycles as part of their fleet options in Kenya. 

• In Nigeria, government-backed ride-hailing platform LagRide is set to pioneer the use of electric vehicles in 2025, partnering with CIG Motors to deploy electric cars from GAC Motors.

• The growing popularity of ride-hailing services in Africa is driven in part by the inadequacy of public transportation systems in many cities. People are forced to seek alternative transportation options that make it easy to commute. The option of ride-sharing makes it even more attractive to many.

Our take

• Ride-hailing companies want their drivers to increase their take-home earnings, and electric vehicles have proven to be a viable solution. While the cost of EVs remains high, partnerships with asset financing companies can address this challenge.

• There is a clear demand for ride-hailing services in Africa, and this is set to grow further with increasing urbanisation. Electric motorcycles, in particular, will play a key role in meeting this demand, offering commuters affordable and faster transportation and delivery services.