Uber 'unlikely' to ditch 25% commission it charges SA drivers

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Uber says the South African market presents growth opportunities for the company.
Uber says the South African market presents growth opportunities for the company.
Bloomberg
  • Uber is unlikely to revise the 25% commission it charges drivers contracted to its platform.
  • The rate was among the key grievances that led to a sector-wide strike in March.
  • For Uber, the South African market presents growth opportunities and the country has birthed some innovative applications that have been rolled out worldwide, such as the emergency button. 


Uber is unlikely to revise the 25% commission it charges drivers contracted to its platform, as it says the fee is crucial to maintaining the e-hailing service provider which has been in the country since 2013.

The rate was among the key grievances that led to a sector-wide strike in March affecting services in major towns throughout the country.

In an interview on Tuesday, Uber's general manager for Sub-Saharan Africa, Frans Hiemstra, said the 25% commission was part of a practical model that the company needed to run the business, which has extended to over 40 cities in the country.

"The services fee or the commission is the difficult thing for us to change because that is what we need to run the business," said Hiemstra.

The drivers want the rate to the reduced to 10% across all e-hailing services, and they argue that the rate is making it hard for them to operate profitably in the face of rising fuel costs and other vehicle maintenance services.

Uber drivers are hired as independent contractors and do not get paid by the company. They make earnings from each Uber trip they make.

Hiemstra claimed that most of the drivers that took part in the protest action, which raised allegations of exploitative and unsustainable working conditions, were not contracted to Uber and that the company constantly engages its contractors over their challenges.

Opportunities

He added that there have been "some positive developments" in their engagements in the wake of the strike.

For Uber, the South African market presents growth opportunities and the country has birthed some innovative applications that have been rolled out worldwide, such as the emergency button. 

In 2020, Uber introduced the "Call Security" button that a user can press when in distress and be connected to a private emergency service and security responder - something Hiemstra sees as a silver lining to local safety concerns. 

"When we came to South Africa, we did not know what to expect from the safety perspective. Some of the risks turned into a great opportunity for us. They allowed us the opportunity to develop some of the great safety features we have today," Hiemstra said.

Hiemstra added that some of the risks presented by the market have been turned into opportunities.

In the past year, Uber has expanded to over 21 cities in South Africa, two cities in Ghana, and four cities in Kenya and plans to scale the African market even further.

READ | Uber competitor DiDi seemingly ditches SA following driver strike

The service has faced numerous regulatory challenges from the different markets it operates in, including in large cities in Europe. 

"The Uber model works differently in different markets," explained Hiemstra.

At home, Uber drivers, as well as other e-hailing service providers, butted heads with metered taxi drivers, who complained that the new operators were taking their business. 

Violent rivalry between the two operator groups at times turned deadly. 

Since 2013, several e-hailing services providers have cropped up, including Bolt, Taxify, inDriver and Chinese operator, DiDi. However, DiDi which  launched in South Africa in 2021, pulled out in April. 

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