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Uber coming to SA – an Uber Bad Idea?

Published by on Jul 4th, 2013, 6 Comments

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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.

Ed: South Africa’s hijacking stats also do not inspire confidence…

Comments

  • James

    LOL, having read the post almost all the way through I was wondering where the mention of hi-jack stats would come into the equation. Was certainly my first thought when I read Uber bad idea :D Well done to the editor.

  • NJP

    I wonder if they’re not seeing a market you missed here: The business traveller. I work with a number of clients in West Africa and know that there having a luxury sedan driver is a really big thing, SA is one of their biggest business and holiday destinations too. Not to mention that West Africans are going smartphone mad at the moment. So, I think that kind of market could be big business for Uber.

  • Lydon McG

    I think this would be aimed more at tourists and business travelers than anything.

  • Paul

    Business and leisure travelers definitely a big market, but even in general if you compare how hard it is to call a taxi currently, to how well Über works, I think there’s reasonable potential for them. I’m certainly very excited and will install app right when they launch.

  • nicksimp101

    Not a chance! Anyone looked at this from the other side (criminal), “Using the apps, customers can track their reserved car’s location”.

    Want to hijack a nice smart car, get this app, monitor where the vehicle is, is it driving out of town or into a quiet area = easy pickings. Maybe I have missed something about exactly how it works. But has anyone thought about this?

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