In February 2022, Fraol Ibsa, who was making a living on ride-hailing apps, downloaded SunPick, the latest ride-hailing app to hit the market in Addis Ababa. Ibsa was excited, as the company was promising to bring new features for both drivers and passengers, such as enhanced security features.
Ibsa, with the new app installed on his phone, attempted to register as a driver, but found it came at a price.
“As soon as I installed the app and registered, another ride-hailing app on my phone, Feres, from which I get most of my jobs, stopped working,” Ibsa told Rest of World.
Feres is a giant in Ethiopia’s ride-hailing sector. Ibsa and other drivers told Rest of World that as soon as they installed the driver app for SunPick and registered, their Feres driver app stopped working, with “Duplicate Access ID” popping up on their phone screens. Drivers say they had found consistent work on Feres with its large customer base and none wanted to replace it with SunPick. A number of drivers told Rest of World that after they uninstalled SunPick, their Feres app started working again.
According to one media report, SunPick accused Feres of unfair business practices. In the same report, Feres denied having anything to do with the issue and accused SunPick of having stolen confidential data, drivers’ contact lists, and source code from Feres when it hired a former Feres employee. The SunPick app doesn’t currently work. SunPick declined to respond to Rest of World’s questions about its app and current operations.
Over the last few years, ride-hailing has become one of the fastest-growing tech-led business sectors in Ethiopia. In the country’s capital, Addis Ababa, more than 30 ride-hailing platforms are available to residents. These companies are fighting for customers and drivers, and seemingly don’t mind crossing each other in the process. But the vast amount of money generated by these companies has also led to a continuous cycle of infighting and lawsuits among local players, including over the use of the word “ride.”
“Ride-hailing rivals have overtaken the 40-year-old Lada taxis as a primary mode of shared transport as the city’s rising middle classes opt for convenience, comfort, and better value — interestingly, for a lower price,” Tewodros Tassew, a digital economy expert in Ethiopia, told Rest of World.
In 2016, e-taxi company ZayRide was the first in Ethiopia to launch bookings via an app. Soon after founder Habtamu Tadesse launched Zayride, Samrawit Fikru released the Ride app. Before its app, Ride connected drivers with passengers via SMS since December 2014.
Four years after ZayRide launched, Feres entered the market with comparatively lower commission fees for drivers and rewards programs for passengers. The arrival of Feres spurred an industry rush, with startups looking to give the pioneers a run for their money.
The influx of companies has sparked intense infighting in the industry. Hybrid Designs, the company that owns Ride, has sued other ride-hailing platforms over the use of the word “ride,” claiming that it was the first company in Ethiopia to introduce the ride-hailing service as well as the technology behind it.
According to the court documents reviewed by Rest of World, officials with Ride say they believe it needed to distinguish itself from other rival businesses that might spring up in the future, and so, the company trademarked the English word “ride”and its Amharic equivalent, registering both words in 2015. Ride has also sued companies such as Beza Ride, Seregela (formerly Seregela Ride), Fetan Ride, and Habesha Ride for similar issues in other courts. Ride’s competitor, ZayRide, argues the platform can’t have sole rights over the word “ride.”
Fikru, the founder and CEO of Ride, did not respond to an email from Rest of World. Feres Technologies did not respond to calls and texts before publication, while SunPick Transport declined to comment .
“According to Ethiopia’s trademark law, words that are familiar and used commonly could not be registered as trademarks,” Habtamu Tadesse, the founder and CEO of ZayRide, told Rest of World.
90,000 The number of trips ordered per day over major ride-hailing platforms in Addis Ababa.
June 2021 report
According to court documents, officials at Ride believe the word “ride” being synonymous with ride-hailing services in Ethiopia is due to its own market success. On the other hand, Tadesse argues that when Ethiopians say “ride,” they are generally referring to the services of metered taxis.
“Prohibiting a ride-hailing platform from using ‘ride’ in their name is equivalent to prohibiting a hospital from using the word ‘hospital’ to represent itself,” argues Tadesse. Rest of World has counted over a dozen platforms with the word “ride” in their names that have had some level of existence in the past two years.
According to Tadesse, an estimated 30,000 to 40,000 drivers in Addis Ababa work on more than two dozen platforms. A June 2021 report stated that 90,000 trips a day are ordered over the major ride-hailing platforms in Addis Ababa. These trips cost an average of 150 Birr ($2.80), implying 13 million Birr ($250,000) in daily transactions and around 1.3 million Birr ($25,000) in commission revenue for the platforms.
This makes ride-hailing one of the strongest digital economy sectors in Africa’s second-largest country by population, according to Tassew.
But Ethiopia’s emerging sector and ride-hailing platforms are yet to meet their biggest rival: the rising fuel costs. Fuel in Ethiopia has long been subsidized by the state, which has helped ride-hailing platforms be affordable to the middle class. But the federal government is going ahead with its plan — which first began in July 2022 — to lift the subsidies progressively.
While public transport providers still buy fuel at subsidized prices, drivers under ride-hailing platforms are not entitled to the benefit.
In October, fuel prices jumped to around 58 Birr (approximately $1). Prices were 38 Birr in April. They are expected to reach over 80 Birr when the subsidies are fully lifted, according to calculations based on current global fuel market price.
Ride-hailing platforms are already saying they are experiencing a fall in the number of users, and fear a severe downturn in the future.
Tassew shares their concern, but points the finger back at the ride-hailing platforms. He believes it’s time for ride-hailing platforms in Ethiopia to evolve and rediscover the very reason they existed.Ride-hailing platforms in Ethiopia are no longer the underdogs and the startups we adored,” he told Rest of World. “The very ingenuity and innovation that made them loved by the public is slipping away. They are no longer affordable for the middle class to use on a regular basis and are becoming like the legacy taxi system they have replaced.”
