This year will mark a decade of Uber’s operations in Africa. The ride-hailing service entered Johannesburg in August 2013 – one of its earliest forays outside the US – and now operates in dozens of cities across eight African countries.
But if Uber plans to celebrate this milestone, it will do so under a cloud of controversy. Many of the ruthless practices highlighted in last year’s explosive leak, dubbed the Uber files, were honed in African markets in particular. The documents revealed how Uber forced its way into economies while sometimes ignoring local laws. Uber spokespeople have since claimed that the company culture has changed under new leadership.
But the Uber files highlighted how successful labour platforms have been at interweaving themselves from afar into vital public services and infrastructure in the global south, selling a vision of tech-driven development while paying scant attention to local needs, conditions and regulations.
The expansion of digital labour platforms in Africa has been largely welcomed by governments desperate to tackle crises of unemployment and low growth. The hope is that low- and middle-income countries can unlock development by specialising in digital commodities and services. The African Union, and African governments, have placed heavy emphasis on the potential of the fourth industrial revolution to create opportunities for young unemployed people across the region.
For the most part, digital strategies have toed the neoliberal line, positioning African governments’ role as being the creation of an enabling regulatory environment: getting out of the way of private tech investment and innovation, in other words.
The Uber files and other recent exposés have shone a light on how global platform power has operated largely unchecked in many African countries. In particular, the centralised control of labour, alongside the general absence of the platform companies from policy and labour relations dialogue, has been discussed. In the decade since Uber’s launch on the continent, the vision of the inclusion and empowerment of African workers in a new, flexible, egalitarian world of work has not materialised. Instead, African labour has been commodified within new – digital – value chains, which funnelled much of the value to northern corporations.
This is illustrated by what one former executive has described as Uber’s strategy of leveraging extremely high levels of unemployment in African countries to rapidly sign up workers, capture transport markets, and then cut drivers’ pay. In South Africa, for instance, where the unemployment rate is currently more than 30%, Uber lured thousands of drivers with attractive subsidies and secured market dominance while labour supply vastly outstripped demand. It then undermined drivers by upping its commission and eroding pay, to the extent that South African cities became the company’s most quickly profitable markets outside the US.
In Kenya, Uber slashed drivers’ earnings in a 35% fare cut in 2016, and subsequently launched a cut-price service, UberChapChap, which paid even less. A similar cut-price service, UberGo, was introduced in South Africa. Drivers, locked into car financing or rental agreements, often facilitated through Uber’s partnerships with local banks, and with limited alternative employment prospects, had little choice but to accept the new rates.
In countries where much work takes place in the informal economy without labour protections such as a minimum wage, platform contractual arrangements have been justified as a step-up from the status quo. However, they have forcibly closed off avenues for improvement in labour standards and collective bargaining, and aimed to normalise and legitimise precarious labour as standard. Research by the University of Oxford’s Fairwork project has repeatedly failed to verify that workers on major platforms in Egypt, Ghana, Kenya, Nigeria and South Africa earn at or above local minimum wages.
The Uber files showed that when the company did become subject to regulatory pressure, it unleashed massive lobbying efforts, and in some cases attempted to rewrite laws in its favour. For instance, when Nigerian authorities tried to address Uber’s corporate tax avoidance, the company deflected criticism by offering to help the government collect tax from its drivers.
Uber admits to past mistakes and says that it has “fundamentally changed” over the past five years. However, in a recent case, in Tanzania, the government tried to determine a per-kilometre ride-hailing rate and force companies to lower their commissions to 15% amid soaring fuel prices in March 2022. In response, Uber suspended its operations in the country, giving one day’s notice of this action in a statement. Its main competitor, Bolt, also significantly scaled back its operations. Uber resumed its service in Tanzania in September, apparently having reached an agreement to work with the regulator. Three months later, new regulations were brought in, allowing ride-hailing companies to charge 25% commission, as well as a 3% booking fee.
Uber has again demonstrated that it will not hesitate to leave urban African transport systems in the lurch should regulators move to protect workers’ pay. The company says that it “rigorously engages” with drivers and takes their feedback on board but, as costs and platform fees increase, most drivers are forced to work longer and longer hours, competing with a growing pool of other drivers.
African ride-hailing drivers and food couriers fought back in strikes and protests against platform practices last year. Uber and Bolt drivers in Kenya and Nigeria protested the platforms’ commissions amid rising inflation and fuel costs. In Egypt, food couriers held a two-day strike to demand higher wages in light of inflation. In South Africa, drivers for Uber, Bolt, InDriver and DiDi engaged in an app “switch-off”, calling for fair pay and better security measures. At the time, Jacob Mamabolo, transport chief for Gauteng province, hinted publicly that platforms had refused to cooperate with regulators’ attempts to mediate.
It has not been clear that platforms have produced sustainable livelihoods and development in Africa, as anticipated by fourth industrial revolution-friendly policies. Instead, big labour platforms have extracted rents from largely already-existing service sectors, such as transport and domestic work, while adding little real value to local economies. Their strategies of market domination, aided by venture capital, have left little room for local innovators or startups to gain a foothold.
Recent months have seen mounting worker victories and platform regulation in the global north. It is possible that such growing regulatory pressure could spur platforms to turn even more to permissive regulatory environments in the global south, and double-down on lobbying efforts. Removing regulatory barriers to their expansion instead of protecting workers is the pathway to digital imperialism, not inclusive development. In Africa, technological development “solutions” offered by multinational corporations have often served as Trojan horses for labour exploitation.
• Dr Kelle Howson is a research associate at the Oxford Internet Institute, University of Oxford, and a consultant at the Institute for Economic Justice, a Johannesburg-based economic thinktank. This article is based on a report first published on Global Information Society Watch
