A new service by Uber Technologies Inc. that allows riders to pay for their trips in cash has heightened tensions with traditional metered taxis in South Africa, and some drivers for the popular car-service app say they fear for their safety after a spate of violent attacks.
Uber introduced the cash option in South Africa in late May, less than three years after launching its regular credit-card based service in Johannesburg. The goal: to lure riders who don’t have credit cards or are reluctant to plug their bank details into an app, said Alon Lits, Uber’s general manager for sub-Saharan Africa.
“When you see the market potential that cash unlocks, it’s very hard to ignore that,” he said. The Uber cash option is also available in Nigeria, Kenya and Tanzania, and markets beyond Africa, including India and Singapore.
But more than a dozen Uber drivers interviewed by The Wall Street Journal said the cash payments are making their business tougher by increasing intimidation and violence from traditional taxi drivers. They also said the risk of carrying cash in a country with one of the world’s highest crime rates doesn’t make up for the limited increase in business. The tensions could spell a problem for Uber in the company’s largest African market, where the number of drivers operating doubled to 4,000 in the past year alone.
“Uber cash is putting our lives at risk,” said Collen, who has been driving for Uber in Johannesburg for the past two years. Like most other drivers, he asked that his last name not be published since he was criticizing his employer.
During a recent drop-off at a Johannesburg light-rail station, Collen said, a group of taxi drivers smashed his windshield and stole his phone and wallet, including his driver’s license. Tensions with South African taxi drivers first boiled over last summer, but Collen said things had calmed down until the cash option was introduced.
“Now that we’re collecting cash, they’re furious,” he said. Other drivers recounted being beaten and chased by taxi drivers, who often try to damage their vehicles or steal their car keys or smartphones. One said he was threatened with a gun.
But Mr. Lits played down the safety impact of the cash option. “There is no data to suggest crime is higher now than it was before cash,” he said. However, a spokeswoman for Uber said there was an uptick in incidents at popular pickup and drop-off places such as light-rail stations in Johannesburg.
To mitigate the growing risk, Uber has taken new measures in the 76 markets where it operates: deploying private-security guards around known hot spots and creating an emergency number that drivers can call if they are threatened.
Drivers, meanwhile, have developed their own coping mechanisms. Many ask riders to sit in the front rather than the back, hide their GPS when approaching dangerous drop-off spots or fix hidden pickup places with customers by phone. Others say they have stopped taking rides in areas where they know taxi drivers are hanging out.
Opposition from rivals, not to mention regulators, is something the San Francisco-based company has encountered time and again from Portland, Ore., to Paris to Beijing. In Nairobi earlier this year, several Uber cars were burned amid clashes with taxi drivers. An anti-Uber protest in Costa Rica earlier this week, blocked roads in and around the capital.
But the troubles encountered by Uber and its drivers in South Africa point to the broader challenges faced by the company as it pushes into poorer markets where fewer people have credit cards and existing operators are defending a business that has seen little competition from public transportation.
On why the option was launched in Lagos, Uber general manager Nigeria said, “Paying with cash is really important for people in Nigeria so this is an exciting experiment for us. We want everyone to enjoy the hassle-free convenience of ordering a safe, reliable ride at the touch of a button. This cash experiment in Lagos will give us some great insights and help us develop our technology to best meet the needs of the local consumers.”, said Ebi Atawodi, General Manager for Uber Lagos.
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