Why is Uber pulling out of some African markets?

Abuja, Nigeria – Uber is leaving Nigeria and Uganda just as the cost of running a ride-hailing business is becoming harder to sustain in parts of Africa.

The company ended its 12-year run in Nigeria and about a decade in Uganda on September 2 , saying the decision followed a “thorough review” of its business priorities and was limited to those countries. Reuters reported that Uber did not provide specific reasons for the Nigeria exit.

But the latest pullouts follow a series of exits from African markets. After six years in Ivory Coast, Uber left last year and ended its Tanzania service in January this year after nearly a decade there.

The closures do not point to a simple lack of demand. Instead, they highlight a harder calculation: whether platforms can keep fares affordable for passengers, whether drivers can earn enough to stay on the road and whether commissions are high enough to make the business worthwhile?

President Bola Tinubu’s economic reforms, including the removal of the fuel subsidy and changes to the naira’s exchange-rate regime, have reshaped the cost of doing business in Nigeria.

For ride-hailing drivers, petrol, imported spare parts and vehicle maintenance have become more expensive, squeezing incomes at a time when fares remain under pressure.

The frustration came to a head in March, when drivers working for Uber, rivals Bolt and inDrive staged a three-day strike in Lagos and Ogun over what they described as unsustainable fares and poor working conditions.

Uber driver Farouk Adebayo, who joined the strike in Lagos, told Al Jazeera how the economics had changed.