Uber has stopped operations in Tanzania because of the restrictive regulatory environment in East Africa.
“We have made the difficult decision to suspend our services in Tanzania from Thursday 14 April 2022. The guide fare set by the Land Transport Regulatory Authority (LATRA) has posed significant challenges for systems like Uber to continue to provide services to our customers.” the company disclosed in a statement.
Adding that “it becomes increasingly difficult for us to continue providing services. We will not be able to provide services until the environment becomes friendly for us to continue providing services.”
The ‘guide fare’ issued by LATRA in March required ride-hailing companies in Tanzania to lower their service fee to 15%, from the 25% commission it charges, according to Uber “the regulations are a major challenge for systems like Uber to run its business. We will be working closely with the drivers on this transition.”
Even though the suspension is indefinite, Uber intends to resume its services—UberX, UberXL and UberX Saver—in Tanzania when the relevant authorities develop regulations that will enable the technology to thrive.
Currently, Uber operates in 80 countries—11 of them in Africa, it started its operation in Tanzania in 2016. The ride-hailing service has more than 60,000 drivers-partners in Africa. They plan to expand into new markets as mobile device adoption increases across Africa.
The number of mobile internet subscribers in Africa has increased threefold since 2011 to reach over 300m unique users, according to the mobile operators’ trade body GSMA. By 2020, 250m more subscribers are anticipated.
Last week, DiDi, another mobility company closed its operations in South Africa after one year of operations due to “strategy adjustment from managerial levels.”