Uber Nigeria Implements Temporary Fare Increase to Support Drivers Amid Economic Challenges

Initiatives to Empower Drivers and Maintain Affordability

Uber's fare adjustment initiative is a part of its ongoing efforts to assist drivers in managing the escalating operating costs. The company recognizes the vital role drivers play in their ecosystem and is dedicated to making Uber the preferred app for drivers, while also prioritizing affordability for riders. Tope Akinwumi, the Country Manager for Uber in Nigeria, emphasized their driver-centric approach and stated, "Drivers are at the heart of everything we do, and we continue to work on initiatives and engage with drivers to help make Uber the app of choice for drivers while maintaining an affordable service for riders."

In response to an in-depth review of the current fuel subsidy removal, Uber made fare updates on June 3rd and 9th, 2023, through their app to align with the prevailing economic conditions. These changes have been instrumental in enabling drivers to enhance their earning potential. In addition, Uber reduced the service fee from 25% to 20% in February 2022, further facilitating better earning opportunities for drivers. To better understand the challenges faced by drivers in their businesses, Uber consistently engages with them through various means, including roundtables, surveys, phone calls, and in-app channels, allowing drivers to provide feedback directly.

The Rationale Behind Fare Increases

Uber clarifies that the fare adjustments introduced in June 2023 are primarily intended to assist drivers in offsetting the recent surge in fuel costs, rather than covering the entire expense of fuel. The company continually monitors local dynamics to evaluate feasible changes and implementation timelines. Uber's service fee plays a crucial role in sustaining the Uber App, supporting ongoing maintenance, and enabling continuous investments in technology to enhance the experience for both riders and drivers. According to the company, drivers on the Uber platform earn more compared to those on other ride-hailing platforms in Nigeria.

Uber holds a prominent position in the Nigerian ride-hailing market, providing a range of services including UberX, Uber Comfort, Uber Greenlight Hubs, and Uber Cash. While the company faces competition from other players such as Bolt, InDrive, and Gokada, it remains a popular choice among riders and drivers alike.

A Glimpse into the Background

In 2022, Uber implemented several fare increases to support drivers coping with the surge in operating costs. The recent increase in fuel prices to N500/L, combined with an inflation rate of 22.41%, further highlights the impact of macroeconomic realities on the ride-hailing industry in Nigeria.

Through these fare adjustments, Uber Nigeria strives to foster a supportive environment for drivers while considering the prevailing economic conditions. By prioritizing both drivers' earnings and affordability for riders, Uber aims to maintain its position as a preferred choice in the Nigerian ride-hailing market.