August 17, 2018 / 3:32 PM / 3 months ago

Uber to push further into East Africa with services like Chap Chap

NAIROBI (Reuters) - Uber [UBER.UL] the global ride-hailing company, is considering expanding into two other East African countries before the end of 2018, focusing on low cost services like Chap Chap in Kenya, the company said on Friday.

Uber's East Africa general manager Loic Amado poses for a picture near a vehicle of Uber operating taxi at a parking lot in Nairobi, Kenya February 12, 2018. REUTERS/Maggie Fick

In Kenya, East Africa’s richest economy per capita, Uber competes with Estonian ride-hailing firm Taxify, Nairobi-based Mondo Ride and Little, which has a partnership with telecoms operator Safaricom.

Nairobi was the first city in Africa in which Uber piloted a low-cost, quick-trip option Chap Chap, using 300 small brand-new Suzuki Altos as a less expensive alternative to regular cars on the Uber app.

There are now more than 400 Chap Chaps, which means “faster” in Kiswahili, on the roads in the capital of Kenya, Uber’s second-largest market in sub-Saharan Africa.

“We are focusing hard on Chap Chaps,” Uber’s East Africa general manager Loic Amado said in an interview, calling the service “a tremendous success so far”.

The lower price is possible because the Alto is more fuel-efficient than the average car an Uber driver uses.

Amado said that the popularity of its low cost services has led Uber to consider expanding into two other countries in the region before the end of 2018. He declined to give details.

In March Uber extended its low-cost options to include a motorcycle service in Uganda’s capital and rickshaws in Tanzania’s capital.

“You are able to get a much bigger piece of the population in touch with your technology and then it’s easy to afterwards add the additional products like uberX or more premium (products),” Amado said.

The company said that it has 311,000 active monthly riders in the region with 9,000 active drivers. It operates in four cities in Kenya and neighboring Tanzania and Uganda.

To address rider’s safety concerns, Uber has introduced rider insurance for uberBoda in Kampala and Nairobi, Amado said.

It is also differentiating itself by offering services like UberEats, which launched in May in Kenya’s capital and has 100 partner restaurants, Amado said.

Reporting by Omar Mohammed; Editing by Maggie Fick and Elaine Hardcastle

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