CAPE TOWN // “Taxi? I have a big car,” says a hopeful cab driver to travellers spilling out the entranceway of OR Tambo airport in Johannesburg, pointing to his elderly Mercedes parked nearby.
A family of five, struggling with mounds of luggage, squeezes in.
He is fortunate with his inspired sales pitch; most commuters push past the jostling cab drivers on to the causeway outside, using their mobile phone apps to locate their Uber drivers pulling up in sleek new Toyotas, Nissans and Volkswagens.
Africa has taken with alacrity to online consumerism, especially those that bypass the many hassles that come from living in developing countries, such as poor infrastructure. Johannesburg’s notoriously potholed roads and clogged traffic give the cheap app hailing service a huge advantage over car hire or conventional cabs as a way of getting around stress-free.
Much like the technology “leapfrog” that hopped over fixed line telephones directly to the mobile handsets that allowed many to make a call for the first time in their lives, a new wave of online business is rapidly changing the African urban landscape.
“Africa has been really welcoming and we are so excited for the potential in the continent,” says Alon Lits, Uber’s general manager for Sub-Saharan Africa. “We’ve had a great response recently in Uganda, Ghana and Tanzania, where riders and drivers have signed up to have access to safe, reliable and affordable rides.”
As happened elsewhere, the California-based company has experienced some pushback. Drivers in Cape Town were attacked this year by metered cab drivers angered at the competition. Mostly, however, the service has been welcomed by consumers and employees.
“Cairo, with historically high unemployment, is one of Uber’s fastest-growing cities. Uber is now providing a route back to work for nearly 3,000 people every month – and more than 40 per cent of them were previously unemployed,” Mr Lits says.
Uber has made some adaptations to its business model to accommodate local conditions. Mainly, it now allows cash payments in South Africa, Nigeria, Kenya and Tanzania. This is in part because of the low penetration of credit cards, about 3 per cent in most African countries.
In Nigeria, the company is working with the authorities and auditors PricewaterhouseCoopers to walk drivers through paying tax, a practice unfamiliar to many of them. The company also has representative offices in cities where it operates to respond quickly to local demands, Mr Lits says.
Online consumer providers are adapting to Africa’s need for good service. One of the oldest Africa-based online services is Bidorbuy that is, similar to eBay, a platform for buying and selling goods, either new or used.
“We are seeing a significant uptake in online shopping, primarily thanks to the spread of internet access, the increase of broadband speeds and the decreasing prices,” says Joni Calitz, Bidorbuy’s marketing manager. “The fact that more South Africans have bank accounts and are increasingly internet-savvy also plays an important part.
However, online retail still makes a very small percentage of total retail in South Africa, so there is potential for further growth as consumer confidence in eCommerce increases.”
Bidorbuy, founded in 1999, survived the dot-com crash, patchy internet availability and, most recently, a post office strike that crippled parcel delivery for almost a year. Bidorbuy now has about 2 million items on sale at any one time and hosts sellers and buyers from as far afield as China, the United States and Europe.
The company also operates in Kenya, where it sells goods in the local currency, the shilling.
Other retail platforms are appearing elsewhere. In Nigeria, the Amazon clone Jumia sells household items, electronic appliances and children’s apparel. It now has warehouses in 10 other countries including Egypt, Morocco, Ghana and even the UK.
Another web-based service charging through Africa is Airbnb. The San Francisco-based service that enables individuals to rent out accommodation in their private homes launched officially in South Africa last year, although by that time it already had nearly 10,000 users, according to Bloomberg.
At the launch last year, Airbnb said listings in South Africa were increasing by 138 per cent a year, and that the number of visitors staying in homes was growing by 257 per cent. “Africa is an incredibly exotic place to travel to and this is an incredible way to experience it like a local,” said Brian Chesky at the launch ceremony last year.
Altogether there are more than 44,000 homes listed across Africa, which is now one of Airbnb’s fastest-growing regions. It is easy to see the appeal. Africa is one of the most costly places on Earth for hotels, which must often provide their own water purification, electricity and other services.
Even in well-serviced cities such as Cape Town a modest hotel will come in at about US$200 a night. A guest using Airbnb, however, can pay as little as $50 for a flat in the buzzing centre of the city, with a view over the harbour.
“We had a guest room we kept made up for friends and family but it stayed empty for most of the year until we began renting it out on the app,” says Pierre Ludditz, who lives in the touristy City Bowl in central Cape Town.
“We get to make some money off what was essentially a luxury and, frankly, a bit of a burden with having to cater to relatives all the time,” he says. “Now it’s paying for itself and then some.”
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