SUNDAY TIMES - Now Uber is taking on SA package deliveries
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Sunday Times Business By ADELE SHEVEL, 2017-03-12 00:00:00.0

Now Uber is taking on SA package deliveries

RUSH JOB: Alon Lits, Uber's GM for sub-Saharan Africa, says UberRUSH would complement courier companies.
Image: SIMPHIWE NKWALI

Uber, the app that has turned the transport industry on its head worldwide, will soon begin testing the market to expand into deliveries in South Africa.

The transportation network company will start piloting the technology within six months .

Alon Lits, the general manager for Uber sub-Saharan Africa, said the plan, called UberRUSH, was to complement courier services by being able to fast-track that last leg of a delivery.

UberRUSH has been offered elsewhere in the world since 2014.

Uber has been operating in South Africa since 2013, and Johannesburg is now one of its top five cities in its Europe, Middle East and Africa region. It launched UberEATS, which brings restaurant meals to your door, last year.

Despite the growth in South Africa, it was not easy at first.

"Initially, we faced a lot of scepticism around whether the app would actually serve a need in South Africa," Lits said.

"There's a huge culture around car ownership and a resistance to relying on anyone else to move you around the city, especially a stranger.

"So initially we had to break down that cultural bias, getting people comfortable with the fact that they could use their smartphone and get a ride with a driver."

The group does not disclose figures, but in South Africa there are more than 4000 Uber drivers. More than half a million South Africans have taken rides using the app.

"If we had to map it, it would be over 161 trips to the moon and back, so we're seeing exponential growth," Lits said.

But Uber has run into problems worldwide, as metered taxi drivers have accused the company of disrupting their business.

As for UberRUSH, concerns were flagged in the UK about whether traditional postal services could be affected, given the disruptive impact Uber has had on the taxi industry.

Last year, equity analysts and investors told Reuters that UberRUSH could dent the market share of operators such as Royal Mail, Deutsche Post and PostNL.

Mark Barnes, CEO of the South African Post Office, said they had already had some cursory discussions with Uber. "Now that some people discovered a pulse in the Post Office, a lot of people are engaging with us about these new solutions ranging from electronic delivery and hybrid mail. My attitude is you should engage with them rather than compete with them."

Building Uber's business in South Africa has also meant helping drivers with access to finance.

Uber entered into a Vehicle Solutions Programme partnership with WesBank whereby WesBank leases a vehicle to those people who have been Uber drivers for at least six months.

More than 600 drivers have obtained financing for vehicles through this scheme.

Rudolf Mahoney, head of brand and communications at WesBank, said the demand for this vehicle financing was always on the rise. "This is driven by the goal to become a business owner and own boss, as opposed to a driver who is driving for another vehicle owner using the Uber app."

Uber also has short-term partnerships such as car rentals, where a car is rented on a fixed monthly rate. In some instances, car owners are involved in the informal rental market.

Anecdotally, Uber was hearing about many peopleselling one of their cars and using Uber to get to work on a regular basis, said Lits.

"We can see that there's a growing segment of riders taking more than, say, seven or 10 trips a week ... if they're taking as many as 10 trips a week, it's likely that Uber is becoming their main mode of transport."

Another initiative is to make Uber's data available to cities.

Called Uber Movement, the data on the website allows you to see traffic patterns based on time of day, week or year, which, for instance, would help city planners assess where the congested areas are, or where an additional bus stop or Gautrain stop would be best. The data will be free.