Why Uber is testing cash payments in South Africa

Uber recently announced it will start testing a cash payment option in SA.

This has raised concerns about the safety of riders and drivers, particularly in the light of escalating unrest between metered taxis and Uber drivers.

An Uber driver was shot dead in Cape Town on 25 March, and more recently violence erupted near the Sandton Gautrain station where police fired warning shots to disperse an angry crowd.

“South Africa is the right environment to experiment a new payment option among a sizeable and sophisticated rider and driver community,” said Uber.

It said it selected South Africa because it had:

  • An engaged and sophisticated rider base
  • An excellent relationship with its partner drivers and stakeholders
  • A strong local team
  • A growing, successful business

“A successful cash experiment will have implications for our business, particularly in fast-growing emerging markets that are primarily cash economies,” said Uber.

Uber said its data shows there is a gap between people who have signed up for Uber, and people who have taken their first ride.

It believes it will be able to reduce that gap with the introduction of cash payments.

Uber rider sign ups vs no first trip May 2016

Does cash paint a target on Uber?

Uber said the handling of cash is nothing new for the taxi industry.

Uber’s data suggests that the risk profile of a driver does not increase significantly when carrying a low amount of cash.

Uber said it has held sessions with drivers and feels it addressed the concerns raised around safety. It also encouraged drivers to deposit the cash they collect regularly throughout the day.

They will be able to do so at any time, at any FNB ATM, said Uber.

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Why Uber is testing cash payments in South Africa