Kenya largest telecom, Safaricom, plans to launch a taxi hailing service, known as Littlecabs, that will compete with Uber in the local market.
Safaricom’s chief executive Bob Collymore told Reuters the operator — famous for it successful mobile money platform M-Pesa — will partner with a local software firm, Craft Silicon, to create the Littlecabs app.
“It is effectively a rival for Uber,” Collymore said. “It is a local competitor which will be cheaper and better for the local community.”
The Littlecab app will be launched in the next three weeks and will ride on Safaricom’s widely used M-Pesa network to process payments, Collymore said.
Safaricom has more than 20 million subscribers on its network and controls close to 70 percent of the Kenyan mobile service market.
San-Francisco-based Uber Technologies, a company that allows users to summon a ride on their smartphones, has been rapidly expanding on Africa and other parts of the world. It recently launched in Uganda and Ghana increasing its presence on the continent to eight countries.
Uber already operates in two cities in Kenya — Nairobi and Mombasa — and was set to monopolize the East African market after its close rival East Taxi shut down its operations in the region to concentrate in Latin America.
The taxi hailing company, which is considered one of the fastest-growing companies globally, has come into serious head wind with regulators in France, Spain, Netherlands and even in South Africa, where its drivers have been asked to get licensed as metered taxi operators.
Other region specific challenges facing Uber in Africa including underdeveloped infrastructure that lead to heavy traffic on the few available roads, high crime rates, and low use of credit cards.
A 2010 World Bank report estimated that poor infrastructure curbs African economic growth by 2 percent per year and business productivity by 40 percent.
The US-based company has had to innovate on its payment system in Lagos and Nairobi to allow users to pay by cash or mobile money.
Credits card penetration is still very low in Africa and in some cases like in Kenya it has been leapfrogged by mobile payments.
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