Uber is leaving Nigeria and Uganda as the cost of operating a ride-hailing business becomes increasingly difficult to sustain in parts of Africa.
The company ended its 12-year presence in Nigeria and approximately a decade in Uganda on September 2, citing a "thorough review" of its business priorities. Reuters reported that Uber did not provide specific reasons for the Nigeria exit.
These pullouts follow previous exits from African markets, including Ivory Coast last year after six years and Tanzania in January this year after nearly a decade.
The closures do not indicate a lack of demand but rather a complex calculation: can platforms keep fares affordable for passengers, can drivers earn enough to remain on the road, and are commissions high enough to make the business viable?
Nigeria exemplifies this challenge.
Why did Nigeria become so difficult for Uber drivers?
President Bola Tinubu’s economic reforms in Nigeria, such as the removal of the fuel subsidy and changes to the naira’s exchange-rate regime, have significantly altered the cost of doing business. For ride-hailing drivers, increased prices for petrol, imported spare parts, and vehicle maintenance have squeezed incomes while fares remain under pressure.
This frustration led to a three-day strike in March by drivers for Uber, Bolt, and inDrive in Lagos and Ogun, protesting what they called unsustainable fares and poor working conditions.
Uber driver Farouk Adebayo, who participated in the Lagos strike, explained the economic shift: "Since the government removed the subsidy, I have really been struggling with making a profit with Uber the way I used to. When I add the cost of maintaining my car and everything else, the profit I was making from driving with Uber was not worth it."
The issue for drivers is not just Uber's charges but the accumulation of costs on top of the platform's commission.
Ayoade Ibrahim, co-founder and general secretary of the Amalgamated Union of App-Based Transporters of Nigeria (AUATON), stated that drivers are facing pressure from multiple angles. "The platform takes 25–30 percent commission. Then fuel. Then maintenance. Then insurance. Then the occasional fine. What remains is barely enough to feed a family, let alone save for the next repair. That is why so many drivers told us, as a union, that they had already migrated to Bolt and inDrive, or gone offline to negotiate cash trips simply to survive," Ibrahim said.
This dynamic is significant because Uber competes not only for passengers but also for drivers who can easily switch between platforms.
Who is challenging Uber?
Bolt and inDrive are major competitors in Nigeria, alongside local platforms like Rida and LagRide.
inDrive allows passengers and drivers to negotiate fares and typically charges a service fee of about 10 percent.
For drivers, the ability to switch platforms or leave them entirely provides an alternative when commissions or fares become unattractive. This makes the market more challenging for platforms to navigate as operating costs rise. A large customer base may generate many rides but not necessarily sufficient profit margins.
So why is Uganda look similar?
Uganda presents a different market but a similar problem.
The Smart Online Drivers Association protested platform commissions in 2019, petitioning parliament over alleged exploitative practices. Drivers were particularly concerned about Uber’s 25 percent commission while fares remained low.
Bolt and SafeBoda were already established competitors in Kampala before Uber's departure. Smaller platforms, including Faras, Yango, and Tinka, have further increased competition.
Uber entered the Ugandan market in 2016 and later launched UberBODA.
The challenge, as in Nigeria, is not necessarily finding passengers but ensuring the viability of the model by satisfying passengers, drivers, and the platform.
So why is Uber staying elsewhere?
Uber has not stated that Nigeria or Uganda were unprofitable, nor has it provided detailed country-specific reasons for the exits. The company says it is focusing investment on markets where it can provide large-scale earning opportunities for drivers and seamless travel for riders, emphasizing its continued commitment to sub-Saharan Africa.
Kenya offers a contrasting example. In 2022, the Kenyan government regulated ride-hailing platforms to cap commissions at 18 percent. Uber, which had been charging 25 percent, reduced its commission to 18 percent after driver protests, choosing to adapt its operations rather than leave.
This suggests Uber's decision-making varies by market. In markets where it perceives sufficient long-term value, it can adjust fares, commissions, or other aspects of its model. In markets where the economics no longer justify the investment, exiting becomes an option.
Nigeria has a large population of 237 million and substantial demand for urban transport. Uganda has a growing urban market, and Tanzania and Ivory Coast also presented opportunities.
However, market size alone is not sufficient. For ride-hailing platforms, the core calculation is straightforward: passengers seek affordable journeys, drivers need sufficient income to cover costs, and the company requires a commission large enough to sustain its service.
When this balance is disrupted, drivers seek alternatives, passengers opt for cheaper options, and the platform loses leverage.
Uber's exits from Nigeria and Uganda, following those in Tanzania and Ivory Coast, indicate a more selective approach to the African market.
Uber maintains its commitment to the continent, but its future success may depend less on the demand it can find and more on which markets can sustain its economic model.
For Ibrahim, the ultimate calculation rests with the drivers. "Uber’s model was built on independent contractors bearing almost all cash costs. In markets with stable fuel prices and accessible vehicle finance, that can work. In Nigeria, where the cost of a full tank can swing tens of thousands of naira in a month, it does not. Drivers become the shock absorbers for the macroeconomy."
