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Introduction: In this interview, Onyeka Aralu, a competition fellow at the International Centre for Law & Economics, discussed the dynamics behind Uber’s exit from Nigeria and what the country needs to attract long-term investment commitments. He spoke with Jide Akintunde, Managing Editor of Financial Nigeria publications.

Jide Akintunde (JA): Uber did not publicly provide a detailed explanation for its decision to exit Nigeria, although many observers have linked the move to the company's broader shift towards autonomous mobility and robotaxi investments, amongst other reasons. What deductions can be made about Uber's exit and Nigeria's place in the company's long-term strategy?

Onyeka Aralu (OA): Uber's exit can be attributed to several factors: fierce local competition, an inability or unwillingness to fully adapt its business model to local conditions, and macroeconomic challenges such as currency volatility. Recent reporting also points to the fact that, due to the economic challenges, Uber was paying drivers more than it charged passengers on some short trips, in some cases by 23%. Its long-term strategy towards autonomous vehicles is a factor, although it is less important in the grand scheme of things, particularly in a market where autonomous deployment is not imminent.

Uber has said it remains committed to Africa. In fact, it still operates in Ghana, Kenya, South Africa and Egypt. While the company has exited Nigeria, it could re-enter the market once conditions are more suitable. The barriers to entry for ride-hailing are low; the key infrastructure is the platform itself. Moreover, Uber has acquired a level of brand recognition which is unlikely to diminish in the minds of Nigerians in the foreseeable future, which may facilitate entry at a future date if the Nigerian market becomes more attractive.

JA: Nigerian policymakers contend that the country has made significant progress in infrastructure and regulatory reform. Why would such a jurisdiction still struggle to retain a global platform like Uber, which is investing in the future of mobility? 

OA: While it is true that there have been some reforms, those reforms barely move the needle. The country is beset with challenges that are difficult to overcome, and headline reforms do not offset the underlying economics of operating in Nigeria or the unpredictability of enforcement.

The recent $220 million fine against Meta comes to mind. There, the FCCPC brought privacy and antitrust claims against Meta. If you read the claims, particularly the antitrust claims, they rest on very weak foundations. A fine of that scale, imposed on that basis, sends a signal that enforcement can be punitive rather than proportionate and evidence-based. I am not surprised that global firms price that kind of regulatory risk into their decisions about whether to stay, scale, or enter at all.

JA: Where should policymakers draw the line between protecting competition in the ride-hailing market and shaping its outcomes?

OA: Policymakers should protect the competitive process, not particular outcomes. That means open entry, transparent and consistently applied licensing and safety rules, non-discriminatory access to essential infrastructure, and enforcement against genuine abuses such as exclusionary conduct or the abuse of dominance.

It does not mean setting fares, guaranteeing any firm's market share, protecting incumbents, or picking winners. If a firm exits because it cannot compete profitably, that is competition working, but the scales should not be set against it. Drafting legislation is one part of the equation, but it is merely a parchment guarantee without the underlying competence needed to bring into reality the vision of the law. The rules must also be predictable.

JA: In a country whose mobility challenges are rooted largely in infrastructure deficits, how much value does a ride-hailing platform realistically create in Nigeria?

OA: The value ride-hailing creates goes beyond the obvious job creation. It broke the traditional taxi model that held for so long in Nigeria, giving consumers a cheaper, more convenient alternative with fares set upfront rather than left to the whims and caprices of the driver – and without the need to bargain, which matters especially for those for whom bargaining is not a strong suit. inDrive is the exception here, given its bargaining model.

Some of that value is less visible at first glance. Moove, which has now exited Nigeria despite its global growth, built its entire Nigerian model on Uber's presence, letting drivers become car owners through a lease-to-own programme underwritten on their platform earnings. That ecosystem value only became clear when Uber left and exposed how much had been built around it.

JA: As mobility becomes increasingly green, connected and autonomous, what would Nigeria need to do to become a more competitive destination for the next generation of mobility investments?

OA: For one, the government needs to make good economic decisions. Macroeconomic stability and predictable currency conditions matter more than any single mobility policy, because they determine whether drivers, operators and investors can plan beyond the next quarter.

There also needs to be a serious improvement in road infrastructure, especially in the hubs where ride-hailing services are concentrated, alongside reliable power and charging infrastructure for electric vehicles and connectivity for connected vehicles. 

JA: What still makes Nigeria a compelling destination for foreign investment despite arguable setbacks such as Uber's exit?

OA: Nigeria is the most populous country in Africa. This means that its potential for growth is enormous. Uber’s exit reminds us that potential alone is not everything, but it does provide a compelling reason to invest. I also truly believe that things will change in the future with the right reforms in place, which would serve to make the country a compelling destination.