Uber pledges R5bn at Saic and addresses fuel price hike

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JIMMY MOYAHA: Between the fuel price increase this week, and the South Africa Investment Conference commitments, we’re going to be looking at the e-haling space and see how that could be affected going forward.

I’m joined on the line by the general manager for Uber sub-Saharan Africa, Deepesh Thomas, to look at this and see what to make of it. Deepesh, lovely having you on the show. Thanks so much for taking the time.

Let’s start with reflections on the South Africa Investment Conference. I know Uber was present there and made commitments towards investment in the South African economy. Take us through that and what led to the decision by Uber to continue to invest.

DEEPESH THOMAS:  That’s right, Jimmy. Thanks for having me. It’s great to be here. I’ll start off in terms of our commitment and pledge to South Africa.

Of course, Uber has been in the country for quite a few years and I think it was important for us to highlight the actual contribution we make to the economy.

As of 2023, we’ve made about a R17 billion direct contribution into the economy, and we’ve been an engine for job creation since we’ve been in the market – about 128 000-odd earning opportunities on the platform.

I think with Cyril’s call to action around rallying together with private and public partnerships, it was important for Uber to be part of this discussion. Specifically, what we did is we pledged R5 billion over the next few years – or three years, to be exact.

Read: There’s a strong case for investment in South Africa – Ramaphosa

That is specifically meant to signal, fistly, our ambition and commitment to South Africa and that we’re bullish about South Africa, but also overall to the sub-Saharan Africa region.

Secondly, it’s meant to invest directly into further growth in the region and ultimately create more earning  opportunities and create new verticals that we’re aggressively pushing.

So the discussion, the pledge on Tuesday, was specifically around the R5 billion we’ve committed into the economy.

JIMMY MOYAHA: Deepesh, where would that R5 billion be deployed in the eyes of Uber? Looking at the South African economy, there’s a lot that the investment could be put towards. How does Uber see that investment rolling out practically?

DEEPESH THOMAS: It’s all related to the e-hailing sector specifically. So we’re pushing quite aggressively on EV infrastructure, fleet enablement, fleet investment.

We’re working in partnerships – specifically for our drivers – where we need some level of investment that will bring down the costs of fuel, costs of tires, costs of vehicle financing.

We’re working on new growth levers like low-cost and Uber Moto, which is a brand new part of the business and requires significant investment. We’re also investing into hardware infrastructure, as I’ve mentioned.

On the merchant side, one of the the things we’re specifically proud about is developing into underserved and under-penetrated areas across South Africa and we kicked off a project about two years ago where we work with the Gauteng provincial government specifically to work on under-penetrated areas like Soweto, where we have put investment, time and effort into servicing areas like Soweto, bringing informal merchants and vendors on board into Uber Eats.

Read: Uber Eats partnership unlocks R1bn for Gauteng township economy

What we’ve seen is we’ve created about R1 billion of economic support directly to these merchants, and we’ve onboarded about 2 000 of these merchants. So we’re pushing harder to invest into this space.

We’re bringing in other areas as well, where both transport and delivery services are under-penetrated.

JIMMY MOYAHA: Deepesh, let’s look at the drivers in a bit more detail. A lot of our SAfm community is Uber drivers who listen to this very show, and they recently were told that the petrol price is set to go up.

What sort of relief measures is Uber discussing or planning for them? They have very little say on how much they can levy, as Uber charges as rates, but they have to incur the increased fuel cost. What is Uber planning around that?

DEEPESH THOMAS: Thanks, Jimmy. I think first and foremost it’s really important to acknowledge that drivers are a core part of our platform.

We had an event three, four weeks ago, prior to all the escalations that are happening geopolitically, where we started appreciating our drivers. We handed out awards and prizes for the best-performing drivers. We are engaging with drivers on a more frequent basis.

We also announced strategic partnerships, specifically looking at reducing the total cost of ownership, and this is off the back of continued engagement.

I think I already mentioned some of them where we’re looking at how we lower the cost of fuel, how we lower the cost of vehicle financing, insurance, et cetera. So this is something we’re doing on an ongoing basis.

Of course, with the rising fuel prices we are monitoring this on a daily basis, specifically on the marketplace and what’s sustainable, both for drivers and riders.

What we’ll continue to do is continue to invest further to ensure that there are sustainable levels across both drivers and riders on the platform, and we’ll continue to double down on these partnerships and investing in that, so that ultimately these kinds of impacts are met together from a driver perspective.

JIMMY MOYAHA: Deepesh, is Uber looking to do any direct relief at the moment? The national government has reduced the fuel levy temporarily by R3. From an e-hailing perspective, is Uber doing anything around their fees to help absorb some of this cost?

DEEPESH THOMAS: What we do is we monitor and in the marketplace we intervene in pricing on a daily and sometimes even weekly basis. So we’re definitely doing that. And we just regulate the marketplace to ensure that, both from a rider and a driver perspective, there are sustainable levels of pricing.

So yes, the answer is we are actively monitoring this and we’re actively making interventions into it.

JIMMY MOYAHA: Deepesh, before I let you go, I had a conversation with an Uber driver recently while travelling through South Africa, and there were talks that Uber would be looking to have the drivers brand their vehicles permanently as part of some of the changes that Uber is looking to enforce in South Africa.

Is that something Uber is still looking at, and is it practical to enforce something like that on privately owned vehicles?

DEEPESH THOMAS: Let me clarify that, Jimmy. Thanks for bringing that up. I’m sure you’re aware of the new regulations [in the] National Land Transport Act, which essentially went into effect in September.

The first step of that is essentially compliance and registration as an e-hailing platform.

Under this specific legislation, the regulators require every e-hailing driver to essentially have markings on the vehicle where it shows you’re either an Uber or a Bolt or anyone else in terms of markings.

Listen/read: E-hailing clampdown: Panic buttons and branding required

But it’s more in terms of what we understand, and we are engaging with the regulators quite actively on this. It’s more in line with enforcement, to ensure that there are safety levels and that the entire industry is regulated.

So that really should not be seen as vehicle branding that is highly visible, because of course we’ve had similar concerns and outreaches from drivers around safety.

This is not a requirement by Uber specifically, where vehicles are branded. What we do is we make vehicle branding an optional take-up for our owners.

So, when we work with some of our owners, we will, for example, look at ways to increase their earnings over and above the earnings that they get from driving in the platform.

So vehicle branding, which is a form of top-of-mind awareness from a brand perspective, is something that we make an optional requirement or optional piece for drivers to essentially partake in. They get reimbursed or funded for that.

Secondly, as part of one of the pieces of partnership that we launched a couple of weeks ago, we have launched car-top branding, which is digital billboards on the top of vehicles.

For example, if drivers opt into that, they get up to R5 000 a month for having that on their vehicles. This is revenue brought in from third-party advertisers who are looking for new kind of digital real estate for advertising.

So again, these are measures that we make voluntarily available for our drivers – and it’s exclusive to Uber – as a way to essentially prop up earnings, specifically because we see some of these shocks that happen.

But I want to just clarify. There is a differential between what’s required under the new National Land Transport Act versus what we offer exclusively and voluntarily to our drivers in terms of advertising.

JIMMY MOYAHA: Thank you indeed for that clarification, Deepesh. I know that our Uber driver and listeners would appreciate that clarity.

We’ll leave the conversation on that note. Deepesh Thomas, general manager for Uber sub-Saharan Africa, joined us to take a look at their investment commitments as well as what they could potentially be doing to assist drivers to weather the fuel shocks.