Fuel Costs Put Pressure on Nigeria’s Ride-Hailing Model After Uber Exit

Uber has ended its Nigerian operations after 12 years, leaving the country on September 2 in a move that has drawn attention to the economics of ride-hailing and the infrastructure supporting digital platforms.

The company reportedly gave drivers no advance notice and offered no farewell message to riders. Its departure was also described as the fourth African market exit by Uber in less than a year, although the other markets were not identified in the supplied material.

Nigeria’s ride-hailing sector is estimated in the source material to be worth about $450 million and to include more than 200,000 drivers. The market includes companies such as Bolt and inDrive, which continue to serve riders alongside local and international technology providers.

Fuel and driver economics

David Adeleke, co-founder and chief executive of Zeeh Africa, attributed Uber’s departure primarily to the cost of operating in Nigeria rather than to shortcomings in its application.

“Uber didn’t lose Nigeria because its app was worse than anyone else’s. It lost because the math stopped working, and no app feature fixes math,” Adeleke said.

He pointed to the cost of petrol as a major pressure on drivers, particularly those working full days in Lagos traffic. Petrol prices in Nigeria were cited as ranging from ₦1,100 to ₦1,400 per litre.

Adeleke also cited a report by Semafor that Uber was paying Nigerian drivers more than it charged passengers. That claim has not been independently verified in the supplied material, but it illustrates the challenge of maintaining affordable fares while covering rising operating costs and driver payments.

“The app was never the hard part,” Adeleke said, arguing that the financial structure beneath ride-hailing services has become increasingly important.

Infrastructure beyond the app

The discussion has expanded beyond transport applications to the systems that allow platforms to operate, including identity checks, fraud prevention, payments and assessments of driver earnings and expenses.

Adeleke said more of this infrastructure is being developed by companies based in Africa for African markets. He identified identity, banking, payment, credit and verification systems as increasingly important to digital businesses operating on the continent.

InDrive, which is described in the source as operating in 48 countries with more than 400 million downloads, verifies its Nigerian drivers through Zeeh Africa. Zeeh is described as an AI-powered open banking and fintech infrastructure platform focused on financial inclusion and secure KYC and KYB data verification.

Adeleke disclosed that his company is among the local businesses discussed in relation to this infrastructure, a perspective that should be considered when assessing his comments.

CNG conversion and financing challenge

Adeleke presented compressed natural gas, or CNG, as a possible response to the pressure created by petrol prices. He said CNG could be 40 to 60 per cent cheaper per kilometre than petrol and that vehicle conversion could pay for itself within a few months through driving. These figures were not independently verified in the supplied material.

He identified financing and underwriting as a major obstacle for drivers seeking to convert their vehicles. Many drivers, he said, do not have formal credit files that banks can use when considering loans.

The broader lesson, according to Adeleke, is that value in the platform economy is moving away from the visible application and towards the infrastructure supporting it. “The value in the platform economy is migrating from the app you see to the infrastructure you don’t,” he said.

Adeleke is also described as a 2025 AfricaTech Awards winner recognised at the Viva Technology conference in Paris, France. He said Uber’s departure should not be viewed as the end of the story for Nigeria’s ride-hailing sector, but as a sign of the financial and infrastructure challenges that platforms must address.