South Africa E-Hailing Market - Forecasts from 2022 to 2027

The South Africa e-hailing market is expected to grow at a compound annual growth rate of 17.45% over the forecast period to reach a market size of US$1,881.776 million in 2027, from US$610.375 million in 2020.

The facility allows the passenger to book/request a vehicle through electronic devices such as smartphones, laptops, etc. This technological development has been brought into the travel and transportation industry in order to provide the audience with safe and convenient travel options. Internet connectivity across the country is increasing. According to the World Bank, 70% of the population had access to the internet in 2020. Consequently, it has helped in creating profitable business opportunities for many E-businesses. Furthermore, e-hailing has increased mobility for seniors, and people with disabilities as information related to riding can be easily accessed through their respective devices.

The South Africa e-hailing market is driven by technological innovation and increased mobility solutions.

Technological innovations are considered an important factor in providing efficiency and effectiveness to applications and services even digitally. The development of platform-based technology has created profitable business opportunities for companies to offer additional services to their customers. Among these, E-Hailing has also gained momentum. The business model has also helped in creating job opportunities in South Africa. Uber, a famous E-hailing service provider, provided more than 29,000 jobs in Africa. Moreover, the country became the first country outside of the US to have three cities that were operating Uber’s model simultaneously.

In addition to it, E-hailing service providers offer features related to consumer safety as well, it allows users of the e-hailing application can notify others of their travel information. Owing to growing competition in the market, new market players enter the market with attractive features to capture the consumer base. For example, when inDriver entered South Africa in 2019, it allowed the passengers to determine the fare of the trip, via a willingness to pay principle. The features provided flexibility to consumers as well as the driver.

Key developments.

• In November 2021, Bolt, an e-hailing service, launched Bolt Comfort as part of its transportation service offering. Passengers are provided with a more premium service, with drivers only qualifying if they are driving a 2015 or newer model sedan or SUV that provides greater comfort and space on a journey. According to Gareth Taylor, Bolt's regional manager for Southern Africa, Bolt Comfort provides an inexpensive yet pleasant choice for discriminating commuters searching for the dependability of a highly rated driver. This new product broadens the number of possibilities accessible to Bolt customers, who may select from a variety of ride types based on their requirements and budgets.
• In June 2020, through collaboration with San Francisco-based, Nigerian-founded fintech company Flutterwave, Uber introduced its Uber Cash digital wallet feature in Sub-Saharan Africa. Uber's ride-hailing services in South Africa, Kenya, Nigeria, Uganda, Ghana, Ivory Coast, and Tanzania began accepting Uber Cash later that month. The action raised the amount of money transmitted to digital wallets and decreased friction in the payment process, which enhanced Uber's trip traffic in Africa.

Cape Town accounts for major shares of the South Africa e-hailing market, based on city.

By city, South Africa’s e-hailing market has been segmented into Cape Town, Johannesburg, Gqeberha, East London, Durban, and others.

The rising proliferation of internet connectivity in Cape Town followed by the increasing adoption of smartphone users is driving the demand for e-hailing services in Cape Town. According to Geo Poll, South Africa is regarded to be one of the biggest adopters of mobile technology with higher rates of smartphone adoption, especially in the region of Cape Town. According to the 2020 State of the ICT Sector report which was put together by the Independent Communications Authority of SA (ICASA), smartphone penetration reached 91.2% in 2019 which is regarded to be an essential factor that will drive the market growth of South Africa’s E-hailing market of Cape Town since Cape Town is regarded to hold the highest share of smartphone adoption in South Africa.

One of the key factors complementing the demand for Cape Town’s e-hailing market is the lucrative investments made in the industry. The investment in the e-hailing cluster has been constantly increasing every year which is propelling the market growth. For instance, in 2019. Cape Town-based venture capital (VC) HAVAIC moved forward in making an investment of R2 million in the startup Aura. Furthermore, Auro announced that it had secured the first R2 million in an R6-million equity raise to help fund its cloud-based security platform for e-hailing services in Cape Town.

Based on vehicle type, the South Africa e-hailing market is expected to witness positive growth for four-wheelers.

The rise of market competition between major players in addition to the launch of various services by e-hailing companies has surged the market’s revenue. For instance, Uber, the e-hailing app business, announced the introduction of a package delivery service in South Africa in September 2020, allowing users to send things to family and friends. According to Frans Hiemstra, Uber's Sub-Saharan Africa General Manager, the company has been working diligently to find innovative ways to leverage its technologies to make it easier than ever to send parcels or items while also unlocking supplementary earning opportunities for drivers on their platform. Since its beginnings more than nine years ago, global e-hailing giant Uber claims to have created over 20 000 economic possibilities for its e-hailing drivers and couriers in South Africa.

Market Segmentation:

By Vehicle Type

• Four-Wheeler
• Two and Three-Wheeler

By Mode Of Payment

• Online
• Offline

By City

• Cape Town
• Johannesburg
• Gqeberha
• East London
• Durban
• Others