Why Uber works in Nigeria
The Nigerian market is Africa’s largest by population with estimates topping 200 Million from some sources. With English being the language of business and industries such as Oil, Cocoa and coal driving the economy, there is wealth in Nigeria and a burgeoning middle class. With several large cities located across the country, you have the geographical masses of cities with transportation requirements. As you’ll find in most of Africa, infrastructure is often quite poor with not enough highways nor government transportation options (buses / trains / underground rail). The informal systems of transportation have always been a major delivery system of people throughout the country. Informal minivans with callers packing in people getting from one section of town to another. There are also masses of taxis, motorcycle taxis and tuk-tuk’s (called Keke Marwa in Nigeria). The more wealthy will usually have their own drivers, but then there is the internationally travelling community and the above mentioned middle class to attend to. While one can usually find many of these available options, this specific target segment may not want to be stuck in a packed polluting minibus on a pre-defined route nor be able to get to where they want to go (or feel safe enough) with taxis or keke’s not willing to travel out of their pre-defined zone.
The market was ripe for Uber for this very reason. People with access to vehicles can use them to generate revenues while not having to wait at the same street corner for a few rides a day. The ability to service anyone with a smartphone is easy and attractive to both driver and passenger. The experience is also much better with air conditioned cars and a good rate competitive to taxis without the requirement to have local currency on hand.
Another fact to recognize is that the population in Nigeria is quite young and there is a high unemployment rate. With over 60% of the population being under 24, the entrepreneurial spirit kicks in. This is something engrained into the culture of most Nigerians early on pressed into service by their parents to help with the family business. One just has to drive on any major road in Lagos to see the tens of thousands of merchants selling water bottles, plantain chips, windshield wipers, books, handkerchiefs, etc…
When Uber entered the market, they recognized that there is a public transportation need to be addressed for the burgeoning middle class as well as a mass of unemployed young people willing to serve as drivers for a company willing to offer them a source of constant revenues. The industry has grown as Uber started allowing the more wealthy to subsidize cars for the many drivers willing to work but not having access to a vehicle effectively creating “sub-distributors” earning the Uber revenues and splitting it with the carless drivers.
This ability to see a need in a market and fill it has resulted in great success for Uber in Nigeria. While they have had hiccups along the way implementing their systems, it goes to show that any product can succeed anywhere if the idea is right. We shouldn’t run from a place like Nigeria when we have a great idea. In fact, we should run to it.
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