loading
loading
The News Uber ended operations in Nigeria and Uganda this week, extending a year-long retreat from Africa. But its exit from the continent’s most populous country has prompted fresh scrutiny of the conditions facing global companies as Nigeria undertakes an economic revamp. The California-based firm introduced its pioneering ride hailing service in Nigeria in 2014, and expanded ambitiously over time by offering boat rides in Lagos and a courier service. But challengers emerged and weakened its quest for dominance, often with different models ostensibly tailored to be more local. Estonian company Bolt, for example, allows drivers to use car models that Uber deemed too old, while InDrive allows both passenger and driver to haggle over prices. Uber’s Nigeria departure now cedes ground to both firms and a crop of local players like LagRide, a startup backed by the state government in Lagos. The company, which left Côte d’Ivoire last September and Tanzania earlier this year, maintains that it sees “growth and opportunity” in sub-Saharan Africa. Operations in Egypt, Ghana, Kenya and South Africa remain active. “But it’s interesting that they are only operating in African countries with per capita GDP above $2,000, implying the size of the middle class is key for them,” Charlie Robertson, an economist focused on emerging markets, told Semafor. The size of the middle class is perhaps “not big enough in much of sub-Saharan Africa,” said Robertson. In this article: Step Back Uber joins a list of multinational companies that have left Nigeria since inflation began spiking in 2023 in response to economic policy changes by President Bola Tinubu. When consumer goods maker Procter & Gamble exited at the end of that year, it said Nigeria was “very difficult for a US dollar-denominated company to create value.” Some departures, like that of British drinks maker Diageo two years ago, have been in the form of divestment to a local operator that continues the business. Alexander’s view After the flood of commentary set off by Uber’s seemingly abrupt exit, Nigerians will return to what they did in the previous instances of high-profile multinational departures: adapt to the substitute. It need not be concerning. Uber transformed Lagos, a city whose lack of a structured and reliable public transit system made an on-demand service easy to adopt. But rather than invent a market, ride hailing companies only help to organize the existing pools of drivers — with the right incentives — and connect them to willing but price-sensitive passengers. How long each company operates depends on how fitting the incentives continue to be for the market. My impression from speaking to drivers over the years and this week is that Bolt offered them better terms, posing an existential threat that helped tip Uber over the edge. Its erstwhile customers will simply shift to any of the active competitors in the meantime. That said, there is a necessary broader concern that the continued exit of global companies of Uber’s size undermines the case for investing in Nigeria. It is a concern that is especially palpable with consumer-focused businesses that must deal with the sharp changes in spending that coincide with unfavorable macroeconomic realities. Poverty has risen in Nigeria since 2023 following the five-fold increase in fuel prices that Tinubu’s termination of a fuel subsidy scheme triggered. And the depreciation of the naira currency has seen the dollar value of company revenues fall within the period. Some companies have come out on the bright side after riding the waves of Nigeria’s persistent inflation and foreign exchange uncertainty, like MTN Nigeria, the local unit of the South African telecom giant, and ecommerce company Jumia. The naira has strengthened over the past year and appears on course to finish the year with its best position since 2018. Still, Nigeria’s return to stability is not complete. Campaigns have kicked off for elections that will be held in four months time and the subsidy debate has returned to the table, portending fresh uncertainty for businesses. Perhaps then, it is entirely sensible for a company banking its future on robotaxis to stop allocating resources in a market whose current preoccupation and dire road network indicates that it is — to put it politely — several years away from being commercially relevant. Room for Disagreement Uber’s challenge in Nigeria may have also been related to the reality, found in many sub-Saharan Africa urban areas, that motorcycles and tricycles are strong alternatives to cars for commuters to quickly move through cities where roads are more likely to be unpaved. Existing bans on using motorcycles for transport in most parts of Lagos and Abuja mean a reduced addressable market for ride hailing providers. By contrast, Uber has run electric motorbikes in Kenya since 2023 and has started rolling them out in Ghana this year. Notable - Uber slashed global headcount by 10% on the day of the Nigeria and Uganda exit, to pursue “bigger opportunities,” CEO Dara Khosrowshahi said.
document fetched 2026-09-05 02:57 · canonical https://semafor.com/article/09/04/2026/ubers-nigeria-exit-furthers-retreat-from-africa