Uber has reportedly exited Nigeria after 12 years of operations, bringing an end to its presence in one of Africa’s largest and most populous markets.
The reported exit has sparked questions among commuters and drivers, particularly over why the global ride-hailing company would leave at a time when demand for app-based transportation remains strong in major Nigerian cities.
Industry observers have linked the development to the worsening economics of ride-hailing, following a sharp increase in petrol prices, vehicle maintenance costs, data expenses and other operational charges.
The removal of petrol subsidies and subsequent increases in fuel prices significantly raised the cost of running vehicles. However, drivers were unable to increase fares at the same pace without risking a decline in passenger demand.
An Uber driver explained that after fuel expenses, platform commissions, vehicle maintenance and mobile data costs were deducted from daily earnings, the amount left for drivers had become increasingly difficult to justify.
The situation also reportedly encouraged some drivers to reduce the number of hours they spent online, while others allegedly negotiated direct payments with passengers to avoid platform commissions.
The resulting reduction in driver availability created further challenges for ride-hailing platforms, including longer waiting times, higher fares during peak periods and increased trip cancellations.
Another major factor was the sharp depreciation of the Nigerian naira against major international currencies. With revenues generated locally in naira, the value of earnings when measured in US dollars was significantly reduced, while operating costs continued to rise.
The development has raised questions about how global ride-hailing companies can maintain operations in markets where inflation, currency instability and rising vehicle costs put pressure on their business models.
Despite the reported departure of Uber, demand for ride-hailing services in Nigeria remains strong, with competitors such as Bolt and inDrive continuing to operate in the market.
Industry watchers say the situation highlights a wider challenge facing Nigeria’s digital economy: strong consumer demand does not necessarily translate into sustainable business operations when inflation, currency depreciation and rising operating costs erode margins.
For commuters, however, the reported exit may have little effect on the underlying demand for affordable and convenient transportation, as millions of Nigerians continue to rely on ride-hailing services for daily movement.
The key question now is whether other platforms can remain profitable while keeping fares affordable enough for passengers and earnings attractive enough for drivers.
