South Africa’s R7 billion e-hailing promise

E-hailing has become increasingly popular in South Africa over recent years, with the industry set to reach R7 billion in value by 2028.

This is according to Vincent Lilane, a business development representative at inDrive, who said e-hailing has transformed urban mobility in South Africa, with 21.1% of the population using these transportation alternatives. 

This growth has been fuelled by influences like evolving customer preferences, unique local conditions, and underlying macroeconomic factors.

By 2028, the industry is projected to reach a value of $387.70 million or approximately R7.12 billion and serve an estimated 14.38 million users.

“However, to unlock its full potential, the industry must address present challenges while simultaneously capitalising on growth opportunities,” he said.

Doing so could maximise the ride-sharing industry’s job creation and GDP contributions, benefiting both South Africa and its people.

For example, pricing is a critical challenge for the ride-sharing industry, and fair pricing for drivers and passengers is essential. 

“The sad reality is that South African drivers tend to earn less than minimum wage. This is because their earnings are eroded by rising fuel prices, vehicle rental fees, the elimination of incentives and bonuses and increased commissions for each transaction,” he said. 

“Longer hours are often the only way to compensate, impacting driver well-being and potentially compromising safety.” 

“While it is hoped that the recently enacted Economic Regulation of Transport Act will positively impact their earnings, drivers must be given more control over pricing. This, in turn, will empower them to achieve sustainable incomes and economic stability.”

Lilane further explained that driver control over pricing could also benefit passengers. 

“This would allow them to access more competitive fares, a critical factor during the current cost-of-living crisis where affordable transportation is a major concern,” he said.

He urged the ride-hailing industry to reintroduce and expand incentive programmes and bonuses to reward drivers, especially since 85% report that these are essential for their earnings. 

“Remember, drivers are the lifeblood of this industry, and their well-being directly impacts its success,” he said.

Another challenge the industry faces is maintaining the safety of both drivers and passengers. Many e-hailing services have come under fire following safety incidents related to their platforms.

In July last year, many Bolt and Uber drivers in South Africa threatened to shut down operations to protest ongoing safety concerns and low pay.

“The rapid growth of ride-hailing in South Africa has coincided with a concerning rise in threats to the safety of both drivers and riders across all operators in this space, tarnishing the reputation of the entire industry as a result,” Lilane said.

“Unfortunately, this isn’t unique to South Africa, as similar incidents are reported globally.”

He said safety challenges in the industry persist, including insufficient driver background checks, lax enforcement of vehicle maintenance, and passenger harassment of drivers. 

Bolt recently made headlines after permanently blocking 6,000 drivers from its platform in South Africa to increase compliance and improve safety on the platform.

Growth opportunities

“Beyond passenger transport, there are a number of opportunities for the broader adaption and expansion of e-hailing in South Africa,” Lilane said. 

For example, he said the freight and cargo market, particularly in remote areas, currently faces significant gaps. 

“E-hailing platforms can leverage their technology and established networks to fill this void and connect businesses and individuals with reliable cargo transportation solutions,” he said.

“This could not only create new income avenues for drivers but also contribute to a more streamlined and accessible logistics network across South Africa.”

“By empowering drivers, prioritising safety, and embracing new possibilities, the e-hailing industry could serve as the driving force in shaping a transportation ecosystem that benefits all South Africans – passengers, drivers, and businesses alike.”