Lessons from Uber: Redefining the Module of Doing Business in Africa

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Everyone wants to be a millionaire. Everyone wants to be rich. Most forget that to create true wealth, one must work hard at earning it and not just making it. Africa is a continent full of copy cats. Open one shop here and a month down the road, 10 others have opened similar shops, targeting the same one client. This is a character that I have never understood, despite researching on it, other saying it as it is, we are a lazy lot in thinking and being creative on the business front.

Many say if you can survive doing business in Kenya, then you can thrive anywhere in the world and I agree. Kenya is a concrete jungle of copy cats, corrupt government officials, sly tenderpreneurs, an ignorant buyer and an illogical transport system. Kenya is the devil’s pit when it comes to doing business of any sort not to mention a regime keen on propaganda and ignoring facts, maybe they using the facts as toilet tissue? That’s the only explanation to how things have gotten in the business realm.

How do we change the core negative characteristics that define doing business in Africa and specifically in Kenya? Most of the things we read are pure PR that would make a Mama Mboga choke on her saliva. The entrepreneurship eco-system in Kenya is choking on so many negative elements that no one seems to care about addressing it yet we always talking about them.

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Uber is an interesting firm. Not because they have disrupted the logistics industry but because it officers key lessons on how we can redefine the module of doing business in Africa and Kenya specifically.

Story 1

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1 client told me how they are excited to have Uber in Kenya because since Uber launched and reduced their fares to KES 35 per KM, he has been able to save upto 90% of transport costs that he was paying to a contracted cab service provide. He says that that his firm used to incur upto KES 500,000 per month to this contracted cab service provider but since Uber came in, the firms total bill for the same has reduced to KES 87,000 per month. Just how crazy is this?

Now he is excited that he can reinvest back into the business and be able to grow and also save a bit and secure a better tomorrow when business is low. This is a powerful story. It shows that; –

  1. It’s possible to reduce the cost of doing business and still make good profits and create an environment that supports and nurtures the saving and investment culture.
  2. It’s better to embrace technology as a catalyst to empower our business and not a deterrent that will cost jobs.
  3. If we can all think outside the box, refuse to copy others, research to identify the needs of the customers that visit a particular shop, we can have more Ubers in a modern world.
  4. Regulation needs to be handled with car as it might stifle growth of new opportunities that might challenge the status quo of doing business.
  5. From Uber, one can reduce cost of goods and services and still remain in the profit margin, creating that needed environment that will nurture other businesses to grow and enable better circulation of capital.
  6. There are various sectors ripe for disruption and this could be what Africa and Kenya in particular has been waiting for. For example; –
  • Retail sector
  • Food processing in Agriculture
  • Security
  • Research
  • Branding and Advertising
  • Publishing and News distribution
  • Courier Services

From Uber’s decision, it’s possible for GOK to take a lesson, enable single legislation that makes it easier to start, run and manage a business and empower a citizenship that can save, and invest and hence creating a stable shilling, a better macro-economic environment, stable inflation rate, a better current account deficit and above all, inviting more FDI into the country. The ripple effect of what Uber has done, if copied by other firms, especially in the construction and manufacturing sectors, will give the country the needed impetus to spur economic revolution.     

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Story 2

Interesting that one gets into business to meet the needs of the customers depending on the size of their pockets. Uber understood this. Uber understands that a positive customer experience is the best marketing tool any brand can have and they have perfected this through the numerous countries they are operating in. In Kenya, customer experience and service is an alien word for these numerous brands. It’s like the customer doesn’t matter. Uber has disrupted this.

Every brand in Kenya has a love-hate relationship with the customers. Love because they are providing jobs for many and hate because their service sucks big time.

When Uber reduced their fares to KES 35 per KM, every potential customer in Nairobi, over 140,000 potential daily cab users made Uber trend. They were happy and excited. This reduction was a direct completion to even the bodas. They had planned to demonstrate but Uber drivers beat them to it.  Which was very shocking. The drivers didn’t put the customer first. They didn’t care for the customer or their sentiment. They only care for their own bottom line. This was an eye opener.

Read: Uber Drivers Hold Demos Over Recent 35 Percent Price Reduction

More shocking was a rival to Uber, Little cab making the announcement that they would sign up former Uber drivers who were not happy with the Uber decision and that they will give them a better package. From this, no one cared for the customer. Yet customer is always king. Uber is doing business in a way that most of Kenyan businesses don’t appreciate. We forget that with reduced cost of doing business, the majority of the population can be able to afford and enjoy what we offering and hence increase the aspect of business. The rule of mass scale, which seems to have eluded all of us.

For Little Cab, the customers watched and noted. They decided never to request for a ride from a brand that doesn’t put them first. On a Friday, an Uber driver can rake in up to KES 30,000. Most of the Uber drivers aren’t sleeping between Friday and Sunday because its peak time and there are too many customers. A lesson therein?

customer-experience

 

  1. It’s possible to reduce cost of doing business significantly
  2. It’s possible to spur the much touted need to save and invest and hence creating a more stable economy with more people having disposable income to save and invest and start new businesses
  3. It’s possible to put the customer as number 1 and give them a positive experience and still make profits.
  4. It’s possible for the government to reduce license fees, reform the tax regime to give the much needed breathing space for entrepreneurs to grow.

For me, for Africa to be great, to be able to champion her own path in terms of being a key and giant economic block in the world, lessons and substance lie in Uber.

 

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About Author

Steve Biko Wafula

Steve Biko is the CEO OF Soko Directory and the founder of Hidalgo Group of Companies. Steve is currently developing his career in law, finance, entrepreneurship and digital consultancy; and has been implementing consultancy assignments for client organizations comprising of trainings besides capacity building in entrepreneurial matters.He can be reached on: +254 20 510 1124 or Email: [email protected]