The real lesson of Uber’s departure from Nigeria

Uber's departure from Nigeria, following its closure of the business in September 2021, marks a significant moment in the continent's digital economy. The move, which occurred after 12 years of operation, reveals a deeper issue beyond the app's performance. Fuel prices in Nigeria, ranging from ₦1,100 to ₦1,400 per litre, constitute a large portion of a driver's earnings, making it a critical factor in the viability of ride-hailing services.

Uber's financial burden to cover this high fuel cost eventually led to its exit from the market. However, the crux of the matter lies not in the app, but in the underlying infrastructure that supports it. This infrastructure, which includes identity verification, fraud prevention, reliable money transfer, and understanding drivers' economics, is increasingly being developed locally in Nigeria.

Companies like Zeeh Africa, a local fintech infrastructure platform, are playing a pivotal role in this transition. They provide essential services like verifying drivers' identities, connecting with open banking systems, and managing credit and payment systems, all of which are crucial for the sustainable operation of ride-hailing platforms.

The story of Africa's tech landscape is evolving, with the focus shifting from foreign platforms operating on imported infrastructure to locally-built solutions. This shift is crucial for the resilience and long-term sustainability of the African digital economy. As local infrastructure continues to mature, the value generated by the platform economy is more likely to stay within the continent, fostering economic growth and stability.

Uber's exit from Nigeria is not just a setback for the giant tech company, but a wake-up call for the industry, highlighting the importance of building robust local infrastructure to support digital platforms.