Uber’s Nigeria Exit Highlights Pressure on Ride-Hailing Economics

Uber has shut down its Nigerian business and left the country after 12 years, according to an account by David Adeleke. The departure took place on September 2, with Adeleke saying the company did not notify drivers or issue a farewell to riders.

The exit was described as Uber’s fourth departure from an African market in less than a year. It also leaves Bolt and inDrive positioned to compete for a Nigerian ride-hailing market estimated at around $450 million and involving more than 200,000 drivers.

Fuel costs weigh on the business

Adeleke linked Uber’s decision to the worsening economics of ride-hailing in Nigeria, where petrol was selling for between ₦1,100 and ₦1,400 per litre. Fuel is one of the largest operating expenses for drivers, making it more difficult for platforms to maintain affordable fares while ensuring drivers can continue working.

“It lost because the math stopped working, and no app feature fixes math,” Adeleke wrote in his assessment of the company’s exit.

He also cited a report by Semafor that Uber had been paying Nigerian drivers more than it charged passengers. The claim is attributed to Semafor and was presented as an indication of the pressure facing the company’s business model, rather than as an independently established finding in the account.

Infrastructure beneath the app

The departure has also prompted a broader argument about what makes ride-hailing businesses sustainable. Adeleke said matching passengers with drivers is no longer the most difficult part of the industry. More challenging functions include verifying drivers, preventing fraud, moving money and understanding the economics of the people providing the service.

“The app was never the hard part,” he wrote, arguing that the most durable value may sit in the systems supporting the consumer-facing platform.

Those systems increasingly include identity, open banking, credit and payment infrastructure designed for African markets. Adeleke said such services are being developed locally by people familiar with regional documents, bank accounts and cash flows.

He disclosed that his company, Zeeh Africa, operates in this area. Zeeh is described as an AI-powered open banking and fintech infrastructure platform, and Adeleke identified it as the service through which inDrive verifies its Nigerian drivers.

Financing remains a barrier

The account also points to vehicle financing as a major issue for Nigerian drivers. Compressed natural gas can cost between 40 and 60 per cent less per kilometre than petrol, and a conversion may pay for itself within a few months through driving, according to figures presented by Adeleke.

However, he said the principal obstacle to wider conversion is not access to gas but financing and underwriting. Many ride-hailing drivers do not have formal credit files that banks can use when assessing lending applications, limiting their ability to fund vehicle conversions or other business costs.

In that context, driver verification, credit assessment and payment services are not peripheral features. They form part of the infrastructure that can determine whether a platform can operate profitably in a market where fuel prices and household finances are under strain.

InDrive, which the account says operates in 48 countries and has recorded more than 400 million downloads, is among the companies competing in the market left open by Uber’s departure. Bolt is another major rival identified as positioned to compete for the sector’s drivers and passengers.

Adeleke concluded that Uber’s exit should not be viewed only as the withdrawal of a familiar consumer app. In his analysis, the episode shows how value in the platform economy may be shifting toward the underlying financial, identity and verification systems that allow services to function locally.