Rising fuel prices sparked by the conflict between the United States and Iran are significantly increasing demand for vehicles from a partner in Uber's first low-cost electric vehicle project in Africa, according to the company's representative.
The South African fleet management company Valternative, based in Durban, is partnering with the ride-hailing giant to deploy 360 electric vehicles in Johannesburg as a pilot program. The initiative is set to expand substantially within the country's largest city before rolling out to other metropolitan areas.
Valternative co-founder Mahomed Jeewa transitioned from selling shoes in 2022 to the electric two-wheeler delivery sector, inspired by the pandemic-era boom in delivery services and China's rapid push toward electrification. "The pandemic transformed the delivery industry in South Africa much like the current conflict is now driving electrification," Jeewa said in an interview. "Once South Africans—whether Uber drivers or regular consumers—experience the convenience of electric mobility, they won't go back."
While Uber has historically promoted its electric vehicle options as an environmentally friendly choice, in the South African market, cost is the primary driver for both the company and its customers. Jeewa noted that the pilot project launched in November last year, after Uber sought to compete with Bolt Technology OU's low-cost service using Bajaj Auto Ltd.'s fuel-powered Qute four-wheeler. Valternative uses the Henrey EV4, manufactured by Beijing Henrey Automobile Technology Co. "Uber approached us to find a vehicle that could compete with the Bolt Bajaj," Jeewa said. "They wanted to challenge it on cost while ensuring the vehicle met their standards for a more comfortable ride."
According to Jeewa, Valternative is majority-owned by himself and his co-founder, with stakes held by several wealthy South African family offices, though he declined to identify them. However, privately owned electric vehicles remain rare in South Africa, and the rollout faces significant hurdles: a weak charging network and high purchase costs for Uber drivers, who face a 25% import tariff on electric vehicles compared to 18% for fuel-powered cars. The country has a large automotive manufacturing sector, but this tariff does not apply to locally produced vehicles, and South Africa currently has no domestically made fully electric cars. Uber responded to inquiries by stating: "Weak infrastructure and high EV costs remain the biggest challenges."
The Qute retails in South Africa for about 105,000 rand (approximately $6,237), while Valternative, working with Henrey Automobile, has reduced the cost of its vehicle to around 190,000 rand by removing heaters and other features. "The biggest challenge remains infrastructure," Jeewa explained, noting that Uber chose a fleet model and had to set up three charging stations in the northern part of Johannesburg where the pilot operates. "We are pioneering this space."
Despite these efforts, Uber's electric vehicle rides are still more expensive than Bolt's Bajaj service. For a 9.5-kilometer trip, Bolt Bajaj costs 49 rand, Uber's electric option is 82 rand, and Uber Go is 88 rand. However, the Henrey can carry two passengers, while Bolt's competitor is limited to one. Jeewa said that charging costs of about 160 rand provide a range comparable to a Suzuki S-Presso running on 400 rand of fuel. Nevertheless, cost-cutting and limited infrastructure affect drivers. Customers and drivers complain about the lack of heating systems, as local winter temperatures can drop below freezing, and drivers say charging eats into valuable operating time. "We spend a lot of time at charging stations waiting for other cars to finish," said Johannesburg driver Thandiwe Mlinjana. "It ends up being an hour of wasted time when we can't take trips."
Currently, Uber's electric vehicle service is limited to the northern suburbs of Johannesburg and does not include high-earning trips to the main airport or nearby Pretoria. Drivers pay a weekly lease fee of about 2,500 rand, which includes maintenance and insurance. Mlinjana said her best week grossed around 6,200 rand, but after deducting the lease and about 1,100 rand in charging costs, she netted roughly 2,600 rand. "It would be ten times better if we could buy these EVs instead of leasing them," Mlinjana said.
This model contrasts sharply with Dubai, which has a mature EV ecosystem with nearly 48,000 registered electric vehicles and over 1,800 public chargers, and plans to have all taxis running on hybrid, electric, or hydrogen fuel by 2027. Uber has set a target of transitioning its entire fleet to zero-emission vehicles by 2040. In South Africa, however, while electric vehicles eliminate tailpipe emissions, the electricity they use primarily comes from coal-fired power plants.
Over the next year, Valternative plans to add six to seven new charging stations per month, introduce solar-powered charging hubs, and retrofit existing vehicles with cabin heaters. Jeewa said the company ultimately aims to replicate this model in eight African countries, with the next steps extending to Egypt, Morocco, Ghana, and Ivory Coast. In South Africa, the company plans to introduce larger vehicles to serve long-distance trips and premium Uber categories. "We are currently experiencing severe supply shortages," he said. "As long as Uber gives us room to operate, we plan to move beyond South Africa and expand into wider markets."
Comments