Price wars drive adoption of cleaner taxis, car sharing in Africa

Due to price pressure, some taxi operators in Africa are seeking to convert their fleets to electric vehicles, while others are adopting hybrid, LPG-powered versions.

Special Report | Bird Agency | Consumers love cheap rides, and there is always a driver who wants to take less on each ride. In order to protect themselves from losses, many taxi and ride-sharing drivers are turning to smaller, more fuel-efficient cars, hybrids, LPG-powered cars, and fully electric vehicles.

Driven by economics and growing environmental awareness, this trend is beginning to reshape the taxi industry across Africa.

It also comes as the continent sees a shift in attitudes towards polluting staples such as plastics and fossil fuels, according to a report by a unit of the Bird Story Agency, the African Climate Awareness Report 2023.

As cities expand across Africa, shared mobility is also on the rise as consumers demand convenient, cost-effective and sustainable means of travel in urban areas.

According to the latest Statista figures, revenues in the shared mobility market on the continent are expected to reach US$25.81 billion in 2023.

“The largest market in the market is the shared vehicles market with an expected market size of US$18.28 billion in 2023. In the shared vehicles market, the number of users is expected to reach 698.60 million users by 2027.”

Ryan Kanyandog, CEO of the Digital Taxi Forum (DTF), a lobby group for drivers using ride-hailing apps in Kenya, points out that price is what is driving change in the industry.

“We want better prices for our services… We are charged so much that it is difficult for us to operate. So some drivers have decided to adopt fuel-efficient cars to avoid losses.

“What this means is that consumers will have to sacrifice convenience for affordability.”

These price wars are now radically transforming the legacy taxi industry, a mainstay in many African urban centres, where the taxi and motorcycle industries were the first to embrace electric vehicles.

Away from electric vehicles and in the wake of growing concerns about carbon footprints and rising fuel costs, taxi companies across the continent are turning to hybrids, LPG and mass transit solutions to remain competitive and sustainable.

In major centers such as Nairobi, Lagos and Johannesburg, there has been a noticeable increase in the number of hybrid vehicles wearing taxi colours.

Hybrid cars, which combine a gasoline or diesel engine with an electric motor, provide lower fuel consumption and lower emissions than conventional cars.

They are also cheaper to maintain and operate than electric vehicles, which require charging infrastructure and battery replacement.

Hybrid cars are particularly suitable for urban areas where traffic congestion and air pollution are high. Some of the hybrid models available in the African market include the Toyota Prius, Honda Insight, Hyundai Ioniq, and Kia Niro.

Combining a conventional engine with an electric motor, these vehicles provide significantly improved fuel efficiency. For taxi operators, this results in lower fuel costs, allowing them to offer more competitive prices to passengers.

While electric and hybrid vehicles represent the future, liquefied petroleum gas (LPG) is being welcomed as a transitional fuel for many taxi operators.

LPG conversions, which emit fewer pollutants than conventional fuels and are much cheaper, are becoming increasingly popular among taxi operators.

Electric taxis are no longer new, but are becoming a growing reality in many African cities. From Accra’s pilot projects to Cairo’s sprawling streets, taxi companies are investing in electric vehicles. The benefits are multifaceted: besides environmental advantages, electric taxis promise lower operating costs in the long term.

Meanwhile, ride-sharing giant Uber is collaborating with African authorities to formulate policies that encourage the uptake of electric vehicles as it plans to roll them out more widely.

This electrification drive also has government support. Incentives, subsidies and charging infrastructure development make it possible for taxi operators to make this shift.

It’s not just the traditional taxi that’s getting an eco-friendly look. Mass transportation solutions, such as electric buses and shuttles, are emerging as alternatives to individual trips.

Businesses are capitalizing on urban residents’ growing need for efficient, affordable and environmentally friendly transportation, especially for daily commutes.

Bus rapid transit systems in cities such as Dar es Salaam and Addis Ababa have shown that when reliable mass transit is provided, it can effectively reduce the number of individual vehicles on the road, reducing costs and emissions.

For consumers, the move towards greener taxis and transport means not only cheaper journeys, but also a reduced environmental impact with every trip. For taxi operators, the long-term savings promise better profit margins.

******

Source: Bird Story Agency