Drivers demand Uber put ‘exploitative’ low-cost service on hold

Sibahle Malinga
By Sibahle Malinga, ITWeb senior news journalist.
Johannesburg, 30 Apr 2021

Uber driver partners and operators have rejected the e-hailing company’s newly-launched low-cost UberGo service, urging the company to put it on hold as it will negatively affect their earnings.

At a media briefing in Sandton yesterday, Uber announced the nationwide rollout of UberGo, which it said would offer price-sensitive riders a more affordable option, making use of smaller, fuel-efficient hatchback vehicles, while unlocking further earning opportunities for drivers.

As part of the new service, the ride-hailing firm has extended its partnership with Moove, a flexible vehicle rental and drive-to-own company, to provide UberGo drivers with access to compact and cost-efficient vehicle choices, at affordable rates, to make it possible for more drivers to one day own vehicles.

The Uber service, which was being trialled in various parts of the country, competes with rival Bolt’s low-cost Bolt Go service, which introduced a fleet of low maintenance hatchback vehicles last year.

Uber’s normal price starts from R7.50/km, while the new low-cost service will start from R6.00/km. Bolt’s low-cost service starts at R5.50/km, while its normal prices start from R6.00/km.

Some Uber drivers told ITWeb they are aggrieved, labelling the low-cost service as a form of exploitation.

Melithemba Mnguni, Uber driver and secretary-general of the South African E-hailing Association and also of the E-hailing Operators Interim Committee, says the new service allows an influx of new vehicles, which will lead to Uber operators and drivers earning a fraction of what they currently take home.

“Operators are aggrieved and they feel undermined. We requested Uber to put on hold the GO category as it was the main grievance on our previous protest against Bolt, but they have ignored our request. UberGo is against good business practices; it is exploitation at its best,” he says.

In April last year, aggrieved ride-hailing drivers and operators lobbied government to include them in the COVID-19 Relief Fund, fearing their vehicles would be repossessed as their business took a knock as a result of the pandemic-induced lockdowns.

In July, thousands of Bolt drivers protested over the Uber rival’s similar low-cost service shortly after it was introduced.

According to Mnguni, the lockdown resulted in some of the worst hit e-hailing drivers and operators taking home only 30% of their wages, as fewer riders utilised their services during the lockdown.

“Drivers’ earnings are impacted negatively in a sense that the salaries have decreased, yet the cost of business has increased immensely and most of all drivers have to put in more hours to make ends meet.”

Outrageously overpriced

Speaking at the launch yesterday, Frans Hiemstra, GM of Uber Sub-Saharan Africa, explained the affordable fares on UberGo aim to attract passengers who may not otherwise be able to hail a ride through the platform, while increasing demand for drivers and boosting their opportunities to earn.

After successful launches in Nigeria and Ghana, Uber’s local partnership with Moove will enable local drivers on the UberGo platform to have access to a new Toyota Agya from R1 599 per week for rental, or for R1 950 per week for drive-to-own deals, covering maintenance and insurance – a deal which Moove claims is 25% less than what is offered by competitors.

Responding to media questions about drivers’ concerns of potentially earning less income, as a result of the new service, Hiemstra explained: “While their concerns are very valid, the opportunity and access to more affordable vehicles is going to allow them to overcome some of the challenges they have been encountering from the onset of the lockdown.

“Our evolution of the product is all based on making sure we have access to vehicles at the right price, with increased economic opportunity. The rates offering creates a platform where drivers can actually make the money they need to grow. In terms of bringing on more drivers, the Moove partnership doesn’t only target new drivers but existing drivers as well.”

Frans Hiemstra, GM of Uber Sub-Saharan Africa.
Frans Hiemstra, GM of Uber Sub-Saharan Africa.

Another Uber driver, who did not want to be named, told ITWeb the vehicle offering is outrageous and overpriced. ”To buy the Toyota Agya, an Uber driver would have to cough up significantly more than what a consumer would have to pay through a bank vehicle finance option. Where will R7 800 a month come from if riders are paying less than the average rates?”

An Uber rider welcomed the introduction of UberGo as a good move.

“I totally understand their [the drivers’] concerns; however, most people have not been spared from the current economic challenges. I think they need to look at the matter holistically.

“Consumers are a key part of the value chain and drivers need to also understand that customers are in trouble and anything that helps them alleviate the economic pain is welcome. Drivers and Uber must engage in a way that does not make them lose customers,” he told ITWeb.