Uber’s exit ignites fresh debate on Nigeria’s business environment

The sudden closure of business operations in Nigeria by one of the leading ride-hailing companies, Uber, has continued to generate debate about how unfriendly the country’s business environment has become, particularly to foreign businesses.

Recall that Uber recently closed shop in Nigeria after 12 years of operation, a development that took many by surprise and which has been attributed to an unfair and inhumane business environment.

There is a belief in some quarters that Uber’s exit was not unconnected with the July 30 directive by the Federal Airports Authority of Nigeria, FAAN, to airport managers to stop Uber and Bolt from operating commercially at airports under its management, pending the finalisation of licence agreements.

The FAAN directive was followed by a deluge of complaints over higher airport transport fares, prompting the Minister of Aviation and Aerospace Development, Festus Keyamo, to intervene on August 27.

The minister directed FAAN to address the people’s concerns, but, sadly, only Bolt was later cleared to resume operations at airports.

Although it is believed in certain quarters that the FAAN saga may have been the last straw that broke the camel’s back, Uber had debunked the claim, insisting that its decision to exit Nigeria was unrelated to FAAN’s directive concerning e-hailing operations at Nigerian airports.

It noted that its operations would continue in other African nations apart from Nigeria and Uganda, stressing that the company’s immediate priority was supporting drivers, riders and local team members throughout the transition period.

“Uber remains deeply committed to Sub-Saharan Africa, where we continue to see robust growth and long-term opportunity,” it said.

It added that it focuses its investments on markets where it believes it can add the most value for drivers by providing earning opportunities at scale and enabling riders to go anywhere seamlessly.

The company agreed that the decision would affect its staff but promised that it would speak directly with them and see how it could assist.

“We are committed to supporting affected employees through the transition and will communicate directly with them regarding the arrangements that apply to them.

“We have been in touch with active drivers to extend a token of our appreciation as they transition over the next period.

“Uber for Business services will also be discontinued. We are in touch with partners to support them through the transition,” the company added.

Uber further explained that rider data would continue to be handled in accordance with applicable data protection laws, privacy requirements and Uber’s data protection policies.

“Uber will limit data retention to what is legally required, maintain appropriate security controls, and fulfil ongoing legal obligations and data requests,” it said.

Uber, launched in Lagos in 2014, subsequently expanded to Abuja in March 2016, even claiming at the time that Abuja was its 400th city globally.

Uber Nigeria is part of Uber Technologies Inc., the US-based, publicly traded company behind the Uber platform, headquartered in San Francisco, California.

However, since Uber’s exit, reactions have continued to trail the development, with some people accusing the All Progressives Congress (APC)-led Federal Government of killing businesses in Nigeria with its unfriendly policies instead of attracting businesses to improve citizens’ living conditions.

Among the leading voices against the government over the continued closure of businesses in Nigeria is the African Democratic Congress, ADC, which alleged that Nigeria was becoming a graveyard for businesses under President Bola Tinubu.

Reacting to the development, the party had said that the exit of the global ride-hailing brand from Nigeria, alongside the closure or scaling down of operations by some major international companies in the country, was an indication that the economic policies of Tinubu’s administration were allegedly turning the country into a “graveyard of businesses.”

In a statement by its National Publicity Secretary, Bolaji Abdullahi, the party said the growing list of businesses shutting down, scaling down or leaving the country had exposed the widening gap between the government’s claims of economic progress and the reality confronting businesses and ordinary Nigerians.

The party said it was surprising to see the Federal Government celebrating a marginal 0.2 percentage-point improvement in Gross Domestic Product, GDP, at a time when businesses were closing, jobs were disappearing and millions of Nigerians were sinking deeper into poverty.

It argued that while the government celebrates a marginal improvement of 0.2 percentage points, Nigeria’s poverty rate had snowballed to 63 percent, affecting an estimated 140 million Nigerians.

The party said: “When the President and his party say things are getting better, we expect them to tell us what has improved in the lives of Nigerians. They should tell us how much food their GDP growth has put on the table. They should tell us which bill it has paid. If 0.2 percent is a mark of success in their books, President Tinubu and APC should tell us what they consider as failure.”

According to the party, Uber’s exit after 12 years in the country reflects the alleged increasingly hostile operating environment confronting businesses, especially the soaring cost of energy and transportation, with the price of fuel rising by as much as 1,700 percent following the removal of fuel subsidy and devaluation of the naira.

“This is precisely why the ADC presidential candidate, Alhaji Atiku Abubakar, has proposed the restoration of a targeted fuel subsidy to bring down the cost of fuel, transportation and production,” the party added.

It referenced a report by the Manufacturers’ Association of Nigeria (MAN), which indicated that 767 manufacturing companies, including 20 iconic global brands, had shut down or ceased operations in Nigeria since 2023, when President Tinubu assumed office.

The party listed some of the companies that had shut down or scaled down operations in the country as Microsoft, Jumia and Bolt Food, Pick n Pay, Shoprite, GlaxoSmithKline (GSK), Sanofi-Aventis, Bayer AG, Procter & Gamble, Unilever and PZ Cussons, among others.

“Therefore, when the President announced that Nigeria has turned the corner, we wondered which corner he was talking about. If, indeed, the economy is improving or the slightest hope exists in the minds of those who run these businesses that this APC government can improve the economy, why are they closing shops and moving elsewhere?

“The painful truth is that Tinubu has turned Nigeria into a graveyard for businesses. Every business that shuts down or pulls out is a vote of no confidence in the Tinubu administration and its capacity to manage the economy.

“Each exit delivers a blow to the economy. But perhaps, more importantly, each one represents a massive loss of jobs and increased poverty.

“Therefore, when the APC and its government celebrate even the most negligible shift in GDP numbers and flaunt that as evidence to show that things are getting better, they are immediately contradicted by the painful reality that Nigerians are getting poorer and hungrier.

“Those who had jobs yesterday are not sure how long it would take before their employers would close shop, and those earning salaries are struggling even to transport themselves to work,” the party stated.

Also speaking, an entrepreneur, Gbolahan Olusegun, agreed totally with the ADC, insisting that a hostile business environment, including the fuel subsidy removal, was what pushed Uber out of Nigeria.

“The main issue that pushed Uber out of Nigeria is the hostile business environment. This predicament was made worse by the fuel subsidy removal, which affected the cost of transport.

“The high transport fare equally affected the number of passengers that drivers get in a day, and to make ends meet, the drivers had to cut corners. And with the drivers cutting corners, Uber as a company was operating at a loss because it was not receiving what was due to it from the drivers.

“However, the last straw that broke the camel’s back was the directive by FAAN to stop the company from operating at the airport. Even though the company does not want to accept that as the final knell on its coffin, that is exactly what happened,” he said.

He lamented that the government was insensitive to the plight of Nigerians, stressing that a concerned government would not allow companies that employ hundreds of Nigerians to just close down like that, knowing that it would have a ripple effect.

“With this Uber exit, do you know how many families have been affected? So many people’s means of livelihood have been negatively affected and the government doesn’t care; that’s the irony of it all.

“I just pray and hope that those in the employ of Uber will find another way to keep their families going. But honestly, this government is not helping matters at all.

“The government should be creating an environment that would attract more companies and not contribute to the closure of existing ones, thereby worsening the unemployment situation in the country,” he stated.

Uber’s exit ignites fresh debate on Nigeria’s business environment