A Changing Landscape for Ride-Hailing in Nigeria and Beyond

Just a few years ago, Uber appeared poised to dominate urban mobility across several African nations. The company touted its contributions to local economies, claiming to have saved riders millions of hours compared to traditional commuting options. But today, that narrative has shifted dramatically as Uber exits key markets like Nigeria and Uganda.

The reasons for this retreat are complex but boil down to fundamental challenges in operating a low-margin business in rapidly urbanizing African countries. While demand exists, the economics haven’t aligned for Uber—particularly given rising fuel costs and currency depreciation.

The Numbers Game

To be profitable, ride-hailing services need fares that are affordable yet provide drivers with a decent income while leaving a margin for the company. This balance has become increasingly difficult to maintain amid global economic pressures.

Nigeria’s situation was compounded by the removal of fuel subsidies in 2023, which tripled petrol prices almost overnight. As SBM Intelligence partner Ikemesit Effiong notes, this pushed many Nigerians out of middle-income status, shrinking Uber’s potential customer base.

Adding to the challenge, the naira has lost roughly two-thirds of its value against the dollar since 2023—further straining a business with significant dollar-denominated costs. “The maths stopped working,” Effiong explains.

Competition and Adaptation

Uber’s initial success attracted competitors who offered similar services but with more flexible models—particularly regarding driver commissions.

While Bolt, Uber’s main rival in Nigeria, also faces economic headwinds, the company has shown greater willingness to adapt to local conditions. As Effiong points out, “Bolt was able to make compromises that Uber wasn’t willing to do.”

Other regional players like inDrive and local companies such as LagRide have further fragmented the market, leaving Uber struggling to maintain its position.