• Friday, March 29, 2024
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BusinessDay

Gainers, losers in Nigeria’s busiest city’s ban on motorcycle, tricycle taxis

Ride-hailing

One month after the Lagos State government commenced enforcement of its ban on commercial motorcycles (okada) and tricycles (keke), a survey by BusinessDay has shown that the policy has been a mixed bag for businesses and residents of Nigeria’s largest. While some are counting their losses, others have cashed in on the opportunities created by the ban.

The policy, which came into effect February 1, was to address “safety and security concerns” in a city with a population estimated at above 20 million, the Lagos State government said.

Gbenga Omotoso, commissioner for information and strategy, said riders of okada/keke ignore traffic laws and also allow criminals to use them as getaway vehicles.

In the last three years, “the total number of deaths from reported cases of okada/keke is over 600”, Omotoso said in January while giving reasons for the ban. As such, he said, the only motorcycles now allowed in Lagos highways are those used for “delivery services”.

Before the enforcement of the ban, okada was the preferred mode of transportation for many residents of Nigeria’s traffic-ridden economic capital with a population of about 22 million – because of its speed and ability to manoeuvre through a maze of gridlocks.

Gainers

Taxi hailing platforms
E-hailing companies like Uber, Bolt and OCar are among the biggest gainers as they have stepped in to fill the transportation gap created by the ban.

The surge in the demand for the e-hailing services since the ban has led to a jump in the fares, more than 100 percent in some cases. A distance of 12km, for instance, now goes for N5,000 as against N2,000 before the ban.

“Fares are higher due to increased demand,” Uber said on its app. Bolt corroborated, saying “price is higher due to high demand”.

The hike in fares charged by the e-hailing platforms, while it pokes holes in the pockets of commuters already burdened by weak purchasing power, however, means more money for the companies and their drivers.

For example, a driver on any of the e-hailing platforms who earned N1,000 before the okada/keke ban now earns about N2,000, a 100 percent revenue increase resulting from the high demand for rides, checks by BusinessDay show.

“Since the ban, my revenue has more than doubled, and unlike my expectation that the hike in price will lead to fewer trips, I actually get people requesting even when I’m completing another trip,” an Uber driver who simply identified himself as John told BusinessDay.

Lagos private car owners
Many private car owners in Lagos have leveraged the ban to start commercial taxi business, especially in areas where the ban has drastically affected commuting. They ply mainly short-distance, inner routes previously serviced by okada and keke but charge much higher than the usual fare.

BusinessDay’s tour around Lagos saw these private car owners at different locations providing transportation services to commuters on short-distance routes.

In Apapa GRA where okada and keke drivers used to be kings, private car owners have taken over, charging N100 to convey passengers to different destinations such as Waterside, Point Road, Liverpool, Airways, etc – routes where keke operators charged N50 before the ban.

And they are getting a lot of patronage from Lagosians who were sceptical about patronising them before the ban. Some Lagos residents also consider the e-hailing companies too expensive.
“We are now rushing for the private cars because they are not many on the road and their fares are far better than those taxis you book online,” Agnes Okeke, a middle-aged woman, told BusinessDay at CMS bus-stop on Lagos Island.

Losers

Ride haling companies/riders
Top on the list of losers in the Lagos State okada/keke ban policy are motorcycle (ride) hailing companies like Metro Africa Xpress (MAX.ng), Gokada and ORide, BusinessDay checks show.

Despite arguments in some quarters that these ride hailing companies who had just invested billions of naira into the transport industry with the hopes of high returns should have been exempted from the ban, the Lagos State government said the ban was without exception.

The ban happened after the ride hailing companies attracted investments from Japanese and Chinese investors to shift the continent’s motorcycle-taxi markets to on-demand mobility.

Gokada raised $5.3 million in May 2019. Max.ng raised a $7 million Series A round in June of the same year, while OPay, the mother company of ORide, raised $120 million in November last year to enable it expand its business which includes its ride-hailing arm.

The ride hailing operators had faulted the position of the Lagos State government and urged it to rather commence the regularisation of the sector as against outright ban.

Adetayo Bamiduro, co-founder and CEO of MAX.ng, noted that they had since inception complied with the Lagos State rules guiding commercial motorbike operations in the state.

Victor Daminabo, pilot operations manager at Gokada, said they were also fully compliant with the provisions of the law prohibiting the operations of motorcycles without rider and passenger helmets, amongst others.

The group expressed fears that the directive by the Lagos State government to ban commercial motorcycles and tricycles from operating in the state might lead to over 3,000 job losses for drivers and full-time staff of the companies and also affect the massive investment already made by both local and foreign investors in the industry.

But these arguments did not cut it for the Lagos State government. With the ban, the companies have been forced to either change their business plan or move their motorcycles to other cities in Nigeria where the ban policy is not force.

Commuters
In announcing the ban, the Lagos State government said it would make the city more secure and safe for residents. While this may be so, the reality on ground is that some Lagosians who do not have cars to move about feel they have been thrown from frying pan into the heart of the fire as they now find it ever more difficult to move around the city where traffic congestion is the norm.

“Okada was always my best means of getting to work early due to Lagos traffic, but now that there is a ban, I’m forced to take a bus. The prices are not even friendly,” 28-year-old Eke John, who works with a consulting firm in Lekki, told BusinessDay at Yaba bus-stop.

While the available public buses are not sufficient to cater for the more than 20 million residents of Lagos, the bus fare surged by over 100 percent after the ban as Lagosians were left to struggle for the few buses.
“The drivers are obeying the law of the market: the higher the demand, the higher the price,” Thomas lmafidon, a resident, said when BusinessDay accosted him at Oyingbo bus-stop.

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