Case Study: Why NOW is the time for startups to succeed - and why UBER SA is failing

If you’re feeling lazy to read today, I’ll give it to you straight away. Startups are not bogged down by a million policies, processes, and red tape. Generally speaking, entrepreneurs are your early adopters and are much more likely to incorporate changes such as digital transformation (think A.I) into their businesses. The case study I’m using is UBER and why it is failing hard in South Africa right now.

Why Startups are in SUCH a good position to succeed RIGHT NOW

If you stick around, I’ll dive a bit deeper with the use of a case study. Because we always want to know how others fail so we learn from them and don’t repeat their mistakes, right? (Unless of course it’s Facebook and you just want to see if your predictions about Richard and Jessica being losers in high school were spot on).

But the case study I’m on about is not how Kodak failed to get onboard with digitisation of photography – we all know about it in some or other way. Read HERE if you want to know more about this story.

But the situation they were in is pretty similar to the one we are in today. The problem that big companies are facing is not whether their products are successful or how fast they are growing. All of that can change in a heartbeat. The problem they face is their ability to innovate and stay relevant.

And in today’s rapidly evolving business landscape, startups are often seen as pioneers of innovation and agility. Their ability to pivot quickly in response to market changes and emerging trends sets them apart from your traditional corporates. As A.I continues to reshape industries and redefine business operations, startups are uniquely positioned to leverage AI to boost operations and tap into exponential growth.

Startups are the absolute champions of agility

At the heart of every successful startup lies a culture of agility and adaptability. Unlike large businesses burdened by institutional processes and legacy systems, startups operate with far fewer boundaries and red tape. They have the freedom to experiment, adapt, and pivot when needed. This agility enables startups to jump onto emerging opportunities, respond quickly to customer feedback, and stay ahead of the curve.

Introducing the failing business operations of Uber in South Africa (SA)

If you’re not from SA, I’d be really interested to know how Uber is doing in your local setting though.

But as for their operations in SA, if you haven’t been stuck for at least 45 minutes calling and waiting on an Uber recently, are you even in South Africa? Except perhaps in Cape Town city bowl, or larger cities. The further away you move from hustling urban areas, the more likely you are to be stranded.

Just Google “is Uber failing in South Africa” and you will have your answer right there, here is an article to kick you off.

But the main reasons for the ongoing failure of this well-known startup and success story can be summarised as follows:

From the media:

  • Failure to ensure the safety of passengers. People are getting robbed and cars are in unroadworthy conditions
  • Long waiting times and frequent cancellations of drivers
  • Drivers are unhappy about the low rates
  • Driving on empty petrol tanks and needing to fill up during rides
  • Dirty cars with no air conditioning
  • Scams from Uber drivers accepting trips but not arriving, having the passengers cancel and pay cancellation fees

From my personal interaction with Uber drivers recently:

  • Drivers’ safety is also endangered. They frequently get robbed, and duped out of money on cash drives (the passenger suddenly “realises” they don’t have money on them when they reach the destination)
  • Not to mention all the taxi strikes and attacks on Uber drivers. Besides the ill logic behind these attacks, as taxi drivers and Uber drivers generally do NOT share the same target audience locally, this is a huge concern for Uber drivers
  • The low rates compared with ‘new features’ such as priority rides which negatively impact them. Priority rides are meant to ensure a passenger doesn’t get stuck as no new rides are allowed to be picked up by the drivers in the vicinity until that particular passenger is picked up. But due to low fares, Uber drivers don’t want to take these rides and merely just switch off their availability and the frustrated passenger watches as cars disappear one by one off the screen, leaving them stranded in any case
  • Also due to low fares – short distance rides are not picked up. You want to go to the airport? No problem. Hop in. You need to pick up your car from the service 6km away? Good luck bro, it’s not going to happen.

I can continue with the list, but let’s dive into why Uber does not seem to get out of this downward spiral.

Innovating and staying relevant

If we go back for a moment to the mention of Kodak above – I mentioned they failed to innovate and stay relevant. Is this the case for Uber? They are constantly updating features and perhaps one of the neatest offerings is the package pickups. They are slowly becoming more of an on-demand courier service in that sense than a reliable ride for passengers needing to go somewhere.

But in this instance, Uber is failing to stay relevant. If we stick to these over-arching aspects, we can bundle many factors under ‘staying relevant’:

  • South Africa’s economic situation is dire with increasing living expenses and zero to minimal increases in earnings, not to mention job losses and ongoing retrenchments around us. Can you really blame the drivers for taking shortcuts to avoid unnecessary fuel expenses on short rides, or scamming passengers to get cancellation fees? Integrity and ethical matters aside, they have families to feed and expenses to cover. By any means possible. How many of us would actually be willing to pay more than the suggested fee, if it means I can get home or fetch my car on time etc.? If Uber was paying more attention, perhaps this could be one way to overcome drivers’ hesitance to accept short-distance rides.
  • Safety is a major issue in the country and failing to ensure a driver or passenger’s safety can make or break a business. Yes, there are panic buttons on the app but what use is that in the middle of a robbery and your phone taken from you? Crime is such a major issue that I don’t have a single easy-fix solution to propose here. A variety of solutions perhaps like female-only rides – check out this amazing local startup SheCab – or neighourhood carpooling are alternatives but the safety aspect will put the final nail in Uber’s South Africa coffin if it cannot be resolved.
  • Short-distance rides are clearly a problem. Besides offering better rates, ringfencing the feature in different ways could be more useful. How many of us drop our cars off for a service, having a lovely and friendly drop-off at home with the service company’s driver and then being stuck at home getting back to the service company because their drivers don’t fetch people? I might be alone in my thinking here, but if I were Uber I would definitely consider jumping in on this opportunity for Uber drivers to fetch clients. They will easily have 3 – 4 people, it’s usually localised to one area as the people live in that area, no drunks in the car, just people wanting to fetch their cars and get back home.

I can carry on, but you get my point? You can innovate but if it is not relevant to your customer’s needs in their specific context, you will eventually fail to either get their loyalty in the first place, or maintain it in the long run.

With A.I now, it represents a transformative force that has the potential to revolutionise how startups operate and compete. Startups can unlock new possibilities across every facet of their business because they are so agile. From automating repetitive tasks to uncovering actionable insights from big data, AI empowers startups to streamline operations, enhance decision-making, and drive innovation at scale.

Why Startups can excel with AI

Uber is no longer a startup and their lack to adapt and stay agile is showing, especially with competitors eating up one slice at a time of market share in different contexts. But they are also gaining traction in other areas where competitors are not doing well so it is also contextual.

Startups thrive on experimentation and iteration. With AI-powered tools and algorithms, startups can rapidly adapt to changing market conditions, consumer preferences, and competitive landscapes.

While Uber is losing traction in South Africa, this is the perfect time for startups to innovate and address the growing gap in the market that Uber is leaving. And A.I is increasing the possibilities tenfold because it is so readily available right now.

Whether it’s optimising operations in real-time or personalising user experiences based on behavioral data, AI enables startups to pivot with agility and precision.

I am interested to see how the Uber situation will unfold in SA and even more keen to see what solutions will be brought forward with the use of A.I.

Thanks for listening to my thoughts. I had a lot of time on my hands recently while I was waiting for an Uber ride for over 45 minutes… which never showed up. I was ready to innovate right there and then and quite frustrated that teleportation is NOT YET possible!

Happy week to you all, and let me know if you have interesting case studies to check out, and stay tuned for more discussions on startups and digital transformation!

Reach out to me at to chat 🙂

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