Safaricom, the biggest telecoms company in Kenya, is set to launch a ride-hailing company to contend with Uber. This move has been described as an effort to increase revenue for the telecommunications giant.
Uber’s dominance in the taxi industry has been felt since it was launched in early 2015 due to its’ cost effectiveness, convenience, reliability and safety. By the look of things, this online transportation company has been enjoying dominance in Kenya.
This is despite the attacks by regular taxi drivers who were affected negatively after Uber’s entry into the country. These drivers even went to the extent of burning vehicles of Uber partner drivers and it took the intervention of the authorities to create harmony in the industry.
Uber dominance seems to be under threat since Safaricom has partnered with Craft Silicon, a Nairobi-based software developer, to launch an app called Littlecabs in the next three weeks. Collymore insinuated that Littlecabs will offer cheaper services than Uber.
While this is a new venture different from its core business, it does not mean that Safaricom will abandon its core mandate which is telecommunications: the firm is just seeking a new source of revenue. Safaricom’s other business ventures include partnerships with banks through M-Pesa as well as M-Kopa.
Safaricom’s CEO Bob Collymore was quoted saying “It is effectively a rival for Uber”. He went on to add that Littlecabs will offer cheaper and better services for locals. Safaricom will actively participate in the process of developing the application, offer network connectivity, put Wi-Fi in Littlecabs vehicles, and use M-Pesa, its mobile-based money service, to process payments.
Safaricom hopes to increase its revenue for the next financial years and Littlecabs is expected contribute to this growth.