After Gladstone Mabele was laid off nearly ten years ago from his job as a truck driver for a logistics company in Cape Town, he spent a long time searching for similar work, but said he kept being rejected for being “too old.” In the end, Mabele turned to driving a metered taxi as the best way to earn a living. But soon after he came into the business it started to get overhauled by the arrival of ride-hailing apps, led by Silicon Valley giant Uber and its smaller Estonian rival Bolt (then called Taxify). The competition pushed down fares and made it hard for taxi drivers to make a living.

Now, Mabele is considering switching sides, and signing up with the latest e-hailing player to arrive in South Africa: China’s Didi Chuxing, which opened up shop in March. The 53-year-old told Rest of World that he thinks the entry of a third large e-hailer will “destroy the metered taxi [industry]”.

“I am considering [joining Didi] because our work seems to be going sideways,” he said. “Uber entered the same way; they started small and people got used to it. Didi is also going to do the same.”

His fears might well be recognized. Analysts said that Didi’s history of aggressive pricing and discounting could further drive down fares in South Africa, undermining metered taxi drivers’ earnings. That could potentially exacerbate tensions that have already led to violence against ride-hailing drivers, who themselves often struggle to make a living. 

“I won’t lie to you… [ride-hailers] are dictating the market, and soon enough, who knows? Maybe metered taxis will be history,” Wonga Mzongwana, a 25-year-old metered taxi driver in Cape Town, told Rest of World. “Everyone wants a better price, I can understand that. But they are really dictating the market and it’s killing the [metered taxi] business. It’s really, really bad.” 


Didi, which launched in China in 2012, operates in 15 countries in South America, Asia, and Europe. Its arrival in Cape Town marks its first foray into Africa. It has already started driver recruitment in South Africa’s biggest city, Johannesburg, and its administrative capital Pretoria, according to Didi spokesperson Felipe Contreras, who said that the company hopes to expand into other African markets once it has settled in South Africa.

Didi is expected to list at some point over the next 12 months, and is reportedly seeking a valuation of more than $100 billion. Its expansion into Africa is part of its appeal, as it seeks out high growth markets to keep up its momentum. 

“Africa is home to the world’s youngest populations and mobile usership, and connectivity is on the rise,” Alexandria Williams, an Africa-China tech industry analyst, told Rest of World. 

South Africa’s competition commission found up to 250% in far differences between ride-hailers and metered taxis, making competition between the two almost impossible. 

Didi joins a wave of Chinese tech companies who have been increasing their presence across the continent, including telecoms giant Huawei, which established a cloud and innovation center in Johannesburg last year. In 2019, Nigerian fintech startup OPay raised $120 million in an investment led by Chinese backers, while the African smartphone market continues to be dominated by Transsion’s Tecno.

Analysts said that Didi was likely to replicate the tactics that it has used successfully in the past to edge out rivals. In China, the company faced down its larger rival Uber in its home market. By keeping prices low, it was able to undercut Uber. In 2016, after a two-year price war, Uber sold its Chinese operations to Didi for $35 billion, ending up with a 20% stake in Didi. The stake has since been diluted to about 15%. 

Didi also has an equity relationship with Bolt. Back in 2017, Didi made an investment for an undisclosed amount into Estonia’s Taxify (now called Bolt) to help Taxify expand into European and African markets. Didi declined to respond to questions on how it handles competition with two companies it has a financial stake in. Over email, Uber evaded questions posed by Rest of World about its financial stake in Didi, replying, “We do not focus on competitors.” 

Predictably, Didi is offering low-fare promotions for passengers and low commissions to entice drivers from Uber, Bolt, and metered taxis. Didi drivers will pay 0% commission for the first four weeks, and then will pay Didi a commission of 13%, according to Contreras. Bolt and Uber drivers currently pay around 20% to 25% commission.

“Our goal is to quickly become the most affordable alternative for users across the country,” said Contreras.

South Africa’s high unemployment rate — currently around 32.5% — has meant that there is a surfeit of people willing to work for ride-hailing companies, despite the lack of job security, unstable wages, and the absence of basic benefits like paid vacation. Many ordinary South Africans cannot afford their own cars, so e-hailing drivers often rent their vehicles from private owners. Once they have taken out rental fees, fuel costs, platform commissions, and phone plans, , they are often left with little to show for a day’s work.

Metered taxi drivers have also typically operated on thin margins. Mabele said his income has fallen by 60% since he started driving, and he gives 50% of his earnings to the owner of the car he rents. While there used to be 32 metered taxis waiting at the rank where he typically waits for passengers, there are now only five. And even then, work is scarce and “things are ugly,” he said. 

Fellow driver Mzongwana said that competition with ride hailers has pushed fares down to the same level his father used to earn when he was a driver 20 years ago. With a rising cost of living, fuel, and car maintenance, prices have become unsustainable, Mzongwana said.

South Africa’s competition commission found up to 250% in price differences between ride-hailers and metered taxis, making competition between the two almost impossible. The commission called for regulations on Uber and Bolt drivers, while the transport ministry looked to amend the transport bill to include e-hailer regulations last year. So far, no action has been taken.

Bolt and Uber, and their drivers, have faced a range of judicial and extrajudicial issues, however. There has been a surge in ride-hailing cars being impounded for operating without permits — an estimated four in five face this problem. E-hailing drivers routinely avoid working-class township areas, where they have faced hijackings, robberies, and attacks by local minibus taxi drivers.

Facing what they say is extinction, taxi drivers who spoke to Rest of World were torn on whether they would end up joining e-hailing companies. Mzongwana said he and colleagues are opposed to taking their business online — they fear their vehicles being impounded, losing the few workers’ rights they have, and being unable to make ends meet. But the writing is on the wall, and his earnings have already dwindled.

“We no longer have that financial freedom we normally had,” he said. “[Metered] tax,i I can see it’s going down. It’s going to the Stone Age now. Who knows, maybe we’ll join [ride-hailers] because we have no option but to join.”