Uber, the multinational ride-hailing company, has launched its Uber Connect service in Kenya. The service provides peer to peer same-day, no-contact delivery. It means that small businesses will be able to send packages to their customers and Kenyan consumers will be able to send low value items, such as groceries, to family and friends.
Uber has been launching its Uber Connect service since April, and the service is now available in markets including India and Bangladesh, as well as Australia, Mexico, and the US. It is a partner service to Uber Direct, which is explicitly B2C. Uber Direct launched in South Africa in May this year and is designed to help businesses deliver products quickly to urban customers.
In Kenya, Uber is positioning the service as a solution for COVID-19 lockdowns, in which care packages, special occasions gifts and supplies can be sent to those in need. Costs for the delivery services will consist of a base fare of Sh55 ($0.51) and an additional fee of Sh14 ($0.13) per km and Sh1 ($0.01) per minute on the route. The service is capped at 15kg per package, and items must not be worth more than Sh5,300 ($49.2). The service will use Uber’s Uber Boda (motorbike taxi) network, which was launched in 2018.
There is little data out there on the success of Uber Connect, although it was rolled out from 4 to 9 cities in India on the back of a successful pilot. We don’t think it will experience significant uptake in Kenya outside of lockdowns but the additional cost of the service to Uber is marginal and it gives the business more chance to leverage its network.
Rather, we think the impact is less direct: the launch of services such as Uber Connect are part of a broader pattern of digital intimacy – i.e. where consumers become more familiarised with doing something digitally, via an app or website. Kenyan online services can still be hit and miss – several retailers claim to offer a functional online delivery platform but the reality is that few offer an integrated system worthy of the name. Services that genuinely work well, drive down the cost of doing business or buying a service, and help deliver more scale and competence in the supply chain all play a part in transforming the retail sector. This is where we think that Uber Connect can play an important role.