Uber’s largest shareholder wants it to exit Africa and Asia

Uber could soon be pulling out of some international markets, including 15 African cities, if its new majority shareholder has its way.

A new $8 billion investment by a consortium led by SoftBank, the Japanese tech giant, has seen the group acquire 17.5% stake in Uber. SoftBank’s 15% share makes the Japanese firm Uber’s largest shareholder. This is SoftBank’s latest investment in the ride hailing industry after previously acquiring stakes in Uber’s major global rivals including Didi in China and Grab in Singapore.

Uber says it hopes the investment will allow the company “double down” on providing its service “to more people in more places around the world,” in a statement to the Financial Times (paywall). But that appears to be at odds with SoftBank’s vision for the company. Rajeev Misra, a board director with SoftBank, believes the ride-hailing company has a better chance of success—and profitability—if it focuses only on core markets such including US, Europe, Latin America and Australia. Misra is expected to join Uber’s board as part of the deal.

Softbank has significant stakes (paywall) in some of the world’s largest ride-hailing companies including Uber rivals like India’s Ola and China’s Didi so it is perhaps unsurprising that it might want the California-based company to focus on core markets where it doesn’t compete with its other investments.

Uber had not replied to Quartz’s email enquiries about possibly pulling out of Africa at press time.

Since launching in its first African market in 2013, Uber has quickly expanded to operate in eight countries including South Africa, Kenya, Nigeria, Tanzania, Uganda, Ghana, Egypt, and Morocco. That expansion has come despite stiff opposition from rivals like Safaricom’s Little Ride in Nairobi and Estonian ride service Taxify in most African markets. Taxify is partly funded by Uber’s global rival, Chinese ride-hailing company, Didi.

In its four years in Africa, Uber has seen significant progress on the continent. Egypt is one of its fastest growing markets globally and in its first 16 months in Lagos, Uber provided 30% more rides than it did in its first 16 months in London. In Ghana, Uber partnered with the transport ministry to develop a regulatory framework for ride-sharing technology essentially ensuring that the company will not face similar regulatory issues it has faced in other markets. As of Oct. 2017, its UberEATS app had been downloaded more than half a million times in South Africa, home to Uber largest African market.

However, like in some of its other markets, Uber’s operations in some African countries have been opposed by taxi unions who say the ride-hailing company’s model is is detrimental to their business. But sometimes, Uber has opposition from its own drivers who protest low fares-drivers have gone on strikes in Abuja and joined a union in South Africa. Meanwhile, in Lagos drivers have sued for employee status while some have tried to counter Uber’s low fees by employing a fake GPS app to artificially inflate riders’ fares.

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