Uber’s decision to shut down its affordable UberX ride option will lead to job losses, as many operators will no longer be able to work on the app.
This is according to the National E-Hailing Federation of South Africa (NEFSA), which warned that the loss of the popular service option will negatively impact operators using certain vehicles.
In an interview with Newzroom Afrika, NEFSA spokesperson Tella Masakale claimed that Uber hadn’t consulted its members about the change.
“We were never consulted. It came as a shock to all of us. So, we honestly find the unilateral decision by Uber to be disappointing to say the least,” he said.
The concern is that many Uber drivers will not be able to shift to another ride category on the app, as different services like UberX and Uber Go require different cars.
NEFSA said that more than 60% of the operators it represents will be unable to make the switch to a new category.
“It could even be more than that. Those are just estimated numbers that we have; we’re still conducting research,” Masakale said.
One reason it is difficult to switch is that many drivers do not own their vehicles. Instead, they rent them from fleet owners such as Easy Drive, Move, and Valternative.
Masakale explained that, in order for operators to own their vehicles, the business model needs to be sustainable, which the current economic climate does not allow.
He said that most drivers are barely able to cover their rental fees, and would be unable to meet financial obligations if they were to finance a car.
“We, as NEFSA, are aware that their categories are unsustainable. Whether it’s Uber Go, UberX, Uber Comfort, Uber Black, they are all economically unsustainable,” Masakale said.
NEFSA is demanding consistent and transparent engagement with Uber regarding its dynamic pricing model. The federation has already engaged with Bolt on this subject.
“In the past few years, they introduced the requirement that your vehicle can no longer be older than 5 years,” Masakale said.
“In other words, if you have a vehicle that is from 2020, it can’t be on the platform. People have invested a lot who now can’t use their vehicles.”
You need the right car for the job
Regarding the vehicles themselves, Masakale explained that many vehicle purchases were made specifically for UberX, which favours entry-level sedans like a VW Polo Sedan or a Toyota Corolla Quest.
Uber Comfort is a higher-tier service that requires more upmarket vehicles. Drivers who have a basic sedan cannot suddenly start operating for Uber Comfort because their car does not meet the requirements.
To qualify for Uber Comfort, the vehicle must be less than five years old and feature ABS, and driver and passenger airbags.
With UberX gone, most drivers will need to downgrade to Uber Go, the company’s cheapest service meant for small urban hatchbacks, where they will earn significantly less per trip.
“You are basically earning half of what you used to earn with the same vehicle, the same distance,” Masakale said.
Uber Go requires a four-door sedan or hatchback that is 12 years old or newer, meaning the oldest cars eligible for the service are from 2014.
The e-hailing company elected to shut down UberX earlier this month, ending a service that has been around for 12 years.
Uber said it was streamlining its operation and that commuters could use one of four services, which are
- Uber Go — The cheapest option, intended for short trips around town in small cars
- Uber Comfort — Newer vehicle models with more spacious cabins, with an ability to request a quiet drive
- Uber Black — Features top-rated drivers with luxury cars and an extended wait time
- Uber Reserve — Allows users to book trips up to 90 days in advance at a fixed price and an on-time pickup guarantee
UberX was previously described as the brand’s flagship service, offering affordable everyday ride-hailing options.
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