So, you want to invest in UBER – the famous taxi-hailing service that has brought a mountain of digital disruption to the traditional taxi business. How profitable is it from a business perspective? Do the numbers add up? What’s the future like for this Uber in Kenya and Africa in general? We explore.

Uber In Kenya – Is It A Good Investment Option For Small Investors?

How Uber Operates

Well, if you really don’t have an idea what this Uber thing is all about then perhaps it’s important we tell you the ABCD of it.

Uber is an online service just like Facebook or Whatsapp. But to be specific while Facebook focuses on bringing the society together and Whatsapp focuses on chat services, Uber primarily focuses on bringing taxi drivers and taxi customers together.

People seeking to hire a taxi to move from place A to B simply log onto Uber and look for the most convenient taxi available. They then simply send the taxi driver a request. This simplifies things for everyone. The taxi guy gets customers easily while the customer gets the service conveniently at the touch of a button.

Let’s Talk Business

Anyone can join Uber and take advantage of its popularity to make some money. The only thing you have to do is make sure you have a good vehicle (currently they’re taking vehicles manufactured from 2009 onwards).

Once you’re admitted as a driver, customers will easily find you – and the more business you do the better your profile becomes. Customers will be rating your services with stars. The more stars you get, the more trustworthy and marketable you become.

How Much Money Can I Make With Uber in Kenya?

The taxi hailing service’s pricing guidelines are as follows (keep in mind that this prices came about after the previous offerings were revised down by 35%).

Ksh35 per Kilometre

Ksh3 per minute

Ksh100 Baseline

Ksh200 Cancellation Fine

For every customer you carry, Uber will take 25 per cent of the money you make…you keep the remaining 75 per cent. Basically, the more trips you make per day, the more you can make. The more customer requests you cancel, the more you lose.

Per Day Earnings (Estimates)

Having talked to a number of Uber drivers in Nairobi, we were able to get a rough idea of how much they make per day. One driver complained that there were too many Uber taxis and that the business had gone down significantly. He told us that on a bad day he gets at least 10 requests making at least Ksh2,500.

Another driver said that he makes at least Ksh100,000 per month with his Toyota Belta car but added that he was worried about the proposed Value Added Tax V.A.T charges.

Verdict

To join or not to join Uber? Well, that decision is entirely up to you. But while at it, it’s worth noting that every business has its own fare share of challenges. Given the recent reduction in per-trip charges, rising competition and worries about who should shoulder the burden of V.A.T the venture may prove less attractive to car owners who buy cars on loan and hire drivers to do the job for them.

That’s however not to say that the business is unprofitable. NO. If you can drive the car yourself, and maintain good client relations, you can make a decent living out of it. Alternatively, if you can afford to invest in a large fleet of cars, then you can take advantage of economies of scale to operate profitably.