Uber exits Nigeria and Uganda as operating costs rise across Africa

Abuja, Nigeria – Uber is leaving Nigeria and Uganda just as the cost of running a ride-hailing business is becoming harder to sustain in parts of Africa.

The company ended its 12-year run in Nigeria and about a decade in Uganda on September 2 , saying the decision followed a “thorough review” of its business priorities and was limited to those countries. Reuters reported that Uber did not provide specific reasons for the Nigeria exit.

But the latest pullouts follow a series of exits from African markets. After six years in Ivory Coast, Uber left last year and ended its Tanzania service in January this year after nearly a decade there.

The closures do not point to a simple lack of demand. Instead, they highlight a harder calculation: whether platforms can keep fares affordable for passengers, whether drivers can earn enough to stay on the road and whether commissions are high enough to make the business worthwhile?

Nigeria provides the clearest example.

Why did Nigeria become so difficult for Uber drivers?

President Bola Tinubu’s economic reforms, including the removal of the fuel subsidy and changes to the naira’s exchange-rate regime, have reshaped the cost of doing business in Nigeria.

For ride-hailing drivers, petrol, imported spare parts and vehicle maintenance have become more expensive, squeezing incomes at a time when fares remain under pressure.

The frustration came to a head in March, when drivers working for Uber, rivals Bolt and inDrive staged a three-day strike in Lagos and Ogun over what they described as unsustainable fares and poor working conditions.

Uber driver Farouk Adebayo, who joined the strike in Lagos, told Al Jazeera how the economics had changed.

“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.”

For drivers, the problem was not simply what Uber charged. It was 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), said drivers were being squeezed from several directions.

“Talk to any driver and you hear the same arithmetic. 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.

That shift matters because Uber is competing not only for passengers, but also for drivers who can move between platforms.

Who is challenging Uber?

Bolt and inDrive are major competitors in Nigeria, alongside local platforms, such as Rida and LagRide.

inDrive allows passengers and drivers to negotiate fares, while its global model has generally involved a service fee of about 10 percent.

For drivers, the ability to switch platforms, or leave them altogether, gives them an alternative when commissions or fares become unattractive.

That makes the market harder for platforms to navigate as operating costs rise. A large customer base can generate plenty of rides without necessarily generating enough margin.

Why does Uganda look similar?

Uganda presents a different market but a familiar problem.

The Smart Online Drivers Association resisted platform commissions in 2019 when it petitioned parliament over what it described as 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 increased the competition.

Uber entered the Ugandan market in 2016 and later launched UberBODA.

The challenge, as in Nigeria, is not necessarily finding passengers. It is keeping the three sides of the business, passengers, drivers and the platform satisfied enough for the model to remain viable.

So why is Uber staying elsewhere?

Uber has not said that Nigeria or Uganda were unprofitable, nor has it provided a detailed country-by-country explanation for the exits.

Instead, it says it is focusing investment on markets where it can provide earning opportunities for drivers at scale and where riders can travel seamlessly. The company stressed that it remains committed to sub-Saharan Africa.

Kenya shows why pulling out is not inevitable.

In 2022, the Kenyan government introduced regulations to cap the commission of ride-hailing platforms at 18 percent. Uber had been charging 25 percent and after driver protests, the company cut its commission to 18 percent.

Rather than leave, the company changed the economics of its operation.

That suggests Uber’s calculation varies from market to market. Where it sees enough long-term value, it can respond to pressure by changing fares, commissions or other parts of its model. Where the economics no longer justify that investment, leaving becomes an option.

Nigeria has a huge population – 237 million – and substantial demand for urban transport. Uganda has a growing urban market. Tanzania and Ivory Coast had their own opportunities.

Yet market size alone is not enough.

For ride-hailing platforms, the calculation is ultimately simple: passengers want affordable journeys, drivers need enough income to cover their costs and the company needs a commission large enough to sustain its service.

When that balance breaks down, drivers look elsewhere, passengers follow cheaper options and the platform loses leverage.

Uber’s exits from Nigeria and Uganda, following the leaving of Tanzania and Ivory Coast, point to a more selective approach to Africa.

For now, Uber says it remains committed to the continent. But its future may increasingly depend not on how much demand it can find, but on which markets can make the economics work.

For Ibrahim, the calculation ultimately comes back to the people behind the wheel.

“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.”