Uber South Africa and Digital Disruption: Innovating for Micro-Entrepreneurs in an Emerging Market

Abstract

In view of a global trend of industry disruption by players in the new sharing economy, this case documents the path of Uber as one such disruptor in the emerging market context of South Africa (SA). It follows various stakeholders in Cape Town, SA, as they experience the opportunities and challenges presented by Uber’s transportation model from the time of the company’s launch in August 2013, up until a moment of public backlash in April 2016. Watching the actions and reactions of these stakeholders, readers are prompted to consider the meaning and implications of disruption for the different entities and institutions in play.

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

2024 Sage Publications, Inc. All Rights Reserved

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Resources

Exhibit 1: How Uber Works

Figure

Source: Uber, 29 January 2015, The beginner’s guide to Uber

Exhibit 2: The Uber Offering for Micro-Entrepreneurs

Figure

Source: Uber.com, 2017

Exhibit 3: In Developed Markets Uber Is Often a Secondary Income Stream

Figure

Source: Uber.com, 2017

Exhibit 4: An Unstoppable Force: Uber International Expansion

Figure

Source: Forbes, 2014

Exhibit 5: Uber Fundraising and Valuation

Announced

Funding round

Investors

Amount

Pre-money valuation

11 Feb

Series A

Led by Benchmark Capital

US$11m

11 Dec

Series B

Goldman Sachs, Menlo Ventures, Bezo Expeditions

US$37m

13 Aug

Series C

Google Ventures and TPG Growth

US$258m

US$3.5bn

14 Jun

Series D

BlackRock, Google Ventures, Kleiner Perkins Caufield & Byers, Menlo Ventures, SherpaVentures, Summit Partners, Wellington Management.

US$1.2bn

US$17bn

14 Dec

Series E

Qatar Investment Authority, Valiant Capital Partners, Lone Pine Capital, New Enterprise Associates, SherpaVentures

US$1.2bn

US$40bn

Series E (extension 1)

Baidu China

US$600m

15 Jan

Debt Financing

Goldman Sachs

US$1.6bn

15 Feb

Series E (extension 2)

Times Internet, Foundation Capital, Accelerated IT Ventures

US$1bn

15 Jul

Series F

Microsoft, Bennett, Coleman, & Co, Ltd.

US$1bn

US$50bn

15 Aug

Private Equity

Tata Opportunities Fund (India)

US$100m

15 Sep

Private Equity

Baidu (China)

US$1.2bn

15 Dec

New funding round announced

US$2.1bn

US$62.5bn

Source: Wikipedia, Timeline of Uber, last modified 14 January 2017

Exhibit 6: Crime Statistics South Africa 2014–2015

Figure

Source: Shaun Uthum, SAPS, 2015

Exhibit 7: South Africa Has One of the Highest Gini Coefficients in the World

Figure

Source: Siddiqui, 3 July 2016

Exhibit 8: Smartphone Penetration as a Percentage of National Population

Figure

Source: Strategy Analytics, Wireless Device Strategies, 2012

Exhibit 9: Smartphone Literacy and Navigation Training

Figure

Source: Uber on-boarding session, Cape Town, 2015

Exhibit 10: Tension Brews Between Uber and Traditional Metered Taxi Drivers

Figure

Source: Rawlins, 27 May 27 2016

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

2024 Sage Publications, Inc. All Rights Reserved

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