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Uber to deliver alcohol, medicine as rivals step up race for market share
Uber Eats, the delivery unit of digital taxi firm Uber, has announced that it is now delivering other non-food commodities including house supplies, pharmaceuticals, and alcohol. FILE PHOTO | POOL
Ride-hailing companies in Kenya are expanding their services to diversify revenues amid growing competition in the industry and stringent rules that have eaten into their profits.
Uber Eats, the delivery unit of digital taxi firm Uber, has announced that it is now delivering other non-food commodities including house supplies, pharmaceuticals, and alcohol, months after it started delivering groceries in addition to ready food.
Wangui Mbugua, Uber Eats Kenya general manager, said regardless of the growing competition locally, the introduction of new services on their platform was inevitable as it was in response to consumer demands.
“At some point, it’s always good for a business to explore other sectors to try and diversify its revenue streams. That’s why Uber Eats has partnered with a wide range of merchants to make it possible to have diverse non-food items delivered through the app,” she said.
Its closest rival, Bolt Food, also ventured into the delivery of non-food products just last month, citing the need to diversify revenue streams in an increasingly competitive market.
“We will adjust our operations as needed to remain competitive in the industry,” said Bolt Food country manager Edgar Kitur.
“We believe that companies need to compete on their merits and we think we’ve been operating well over the last few years.”
This diversification comes amid the emergence of several local ride-hailing applications, including the recently launched Showfa and Yego, which are giving Uber and Bolt a run for their money in the mobility segment of their business.
In Africa, Uber Eats operates the delivery segment of the business only in Kenya and South Africa, which have been its largest markets on the continent since 2017, but also where competition is stiffest.
While Uber was the only company of its kind at the time of its entry into Kenya in 2013, there are currently more than 20 digital taxi apps operating in several cities and towns across the country.
Both Uber and Bolt have since extended their services beyond Nairobi in efforts to build revenue.
Currently, they both offer their mobility or delivery services in Nakuru, Kisumu, Mombasa, Naivasha, and Eldoret.
Tanzania has about 14 ride-hailing apps, while Uganda has less than 10, pointing to less competition for the dominant international companies in the ride-hailing business.
Besides the rising competition, the mobility companies are also still recuperating from a slash in the commission they receive from drivers in Kenya after the government capped it at 18 percent, which is less than the 25 percent they earn in Uganda and Tanzania.
Uber’s delivery segment has been the fastest growing globally.
In 2021, it brought in Sh1.14 trillion in revenues, toppling the mobility unit, which earned the company Sh1.03 trillion in the same period.
However, the company has been struggling to make a profit amid stiff competition globally.
Last year, the taxi-hailing company recorded its highest-ever loss of Sh1.25 trillion. It last made a profit in 2018, when it earned Sh137 billion ($9.1 billion).
