Uber Reverses South Africa Fare Cuts as Drivers Are Worse Offby
Uber says drivers were not busy enough to fill earnings gap
Taxify entered S. African cities in May to compete with Uber
Uber Technologies Inc. will on Monday reverse fare cuts announced in South Africa two months ago, saying demand didn’t grow enough to ensure that drivers made the same amount of money as at the previous price levels.
“We cut prices to encourage more riders to use Uber,” Alon Lits, general manager for sub-Saharan Africa, said by e-mail. “At the time, we promised that if those price cuts didn’t work out for drivers -- because they weren’t busy enough and therefore earning more -- fares would go back up,” he said.
Uber cut fares by 20 percent in South African cities in April to improve demand for the ride-hailing service during the colder winter months. The U.S. company increasingly has to compete with similar services entering the African market, with Taxify of Estonia starting the service in Johannesburg and Cape Town this year. Uber drivers have also been involved in violent clashes with operators of metered taxis.
Uber currently has about 4,000 drivers in South Africa and plans to grow the number to 15,000 in the next two years.