Ridesharing’s Next Frontier: Africa

Many Africans who can’t afford to buy a vehicle are becoming drivers for rideshare companies in order to secure a discount and loan on a car.

Reuters reported that there are 25 cars per 1,000 Kenyans, compared to 786 in the United States, according to the World Bank.

At Suzuki Motor Corp’s showroom in the Kenyan capital of Nairobi, for example, most of the customers are drivers for Uber, which partnered with the carmaker and South Africa’s Stanbic Bank at the beginning of the year to give its drivers loans and discounts on vehicles.

The deal, which will soon be expanded to Uganda and Tanzania, offers financing of up to 100 percent for top-rated Uber drivers at a price of 850,000 Kenyan shillings ($8,349.71), cheaper than the usual 950,000 shillings. The loans are repaid with the money the driver earns with the company.

Patrick Amenya, the sales director at CMC Motors, the local Suzuki franchisee, said the arrangement has helped him sell “more vehicles than normally we would.”

Toyota and Japan’s SoftBank are also investors in Uber, as well as Southeast Asia’s ridesharing app Grab. And some of the customers at Toyota’s nearby showroom work for Sendy, a local online delivery company.

So far, the automakers are focused on Nairobi, which is often a springboard for the rest of Africa.

“When you have a success story in one country in Africa, we can help to develop to a pan-African scale,” said Richard Bielle, head of Toyota’s business in Africa.

An example of the service’s success is 25-year old Joe Wanyoike, who was unable to find a job when he finished secondary school in 2011. He purchased a pre-owned vehicle for 50,000 shillings ($490.44) a month, and signed up to work for Uber. The company revealed that Wanyoike’s rating is 4.7, near the 5.0 maximum, which helped him secure a loan for a new Alto.

“I’m very happy because I could not afford a new car,” he said.



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