Lagos commuters cut back on ride-hailing as fares rise

…operators roll out affordability incentives

Ride-hailing services, once seen as a convenient and safe alternative to traditional public transport, especially for unfamiliar places, have now become a decision most workers think twice about, as rising operational costs continue to push up fares.

The fares for app-based transport have surged over the years, pricing out most of Nigerians from these services.

“I remember when I went for a Covid test in 2020; now I can’t even try it. A trip from the mainland (Abule Ado) that previously cost N4,000 to Lekki now costs over N10,000. I’d rather jump on a public bus,” Odinaka Chinedu said.

BusinessDay’s findings showed that many Lagos commuters are booking rides less frequently than they did a few years ago, largely due to rising fares, and are increasingly relying on public transport, such as the Lagos State Bus Rapid Transit (BRT), state train services, yellow buses, and other lower-cost alternatives.

Read also: Rising transport costs force commuters to trek, seek cheaper routes

“My ride-hailing usage has dropped to 1 out of 10 trips in recent times. I would have normally chosen to use Shuttlers to and from, but now I have to use danfo to work and shuttlers on my way back,” Victoria Mmuoebolam, digital media strategist, said.

To cope with higher costs, some said they combine different transport modes depending on the costs, convenience, and urgency. Others said they use these rides only when necessary, such as attending important events, running late, or moving around at night.

“I now use public buses (danfo) and bike more often than these app-based transports,” Onyinye Agina said, a choice she never thought would be her go-to option.

“These rides are now expensive, compared to public buses. The last ride I booked from Oguda to Victoria Island, I was charged almost N20 thousand,” Onyinye Agina said, noting that current fares on these apps have influenced her choice of commuting.

Divine Ndubueze said he now compares ride-hailing fares with public transport costs before deciding how he will commute for the day.

“Ride-hailing has become something you think about before using (maybe even solve small maths) than doing on a whim because of the price increase,” Ndubueze said.

He also noted that his monthly budget for transportation increased by N20,000, saying, “I price with danfo drivers more; I budget for the month down in case of any minor increase.

“I remember booking a ride from the mainland to VI and saw N24,000, I immediately switched to a public bus and spent less than N2,000,” Ndubueze said.

While commuters complain of rising fares, the impact is also being felt by drivers, who said higher trips do not translate into higher earnings, as soaring fuel costs, vehicle maintenance expenses, and remittances to operators continue to squeeze their profits.

Recall that in March, ride-hailing drivers went on a three-day strike over rising operational costs and harsh economic realities facing app-based transport workers across Lagos State.

Read also: App-based drivers call for structural reforms as operational costs rise

Drivers across all platforms complained about how the high price of fuel, vehicle maintenance, inflation, and daily living expenses are affecting their earnings.

The Amalgamated Union of App-Based Transporters of Nigeria (AUATON), however, urged ride-hailing companies and relevant government authorities to adjust ride fares to reflect the current cost of fuel and other economic issues in the country.

The union stated that the high commission percentages for ride-hailing companies must be reduced to allow drivers to earn a sustainable income.

Lateef Adebayo, a ride-hailing driver, said drivers are under pressure to meet customers’ expectations for comfort, including air-conditioned rides.

Adebayo said they are also contending with fluctuating fuel prices and app-determined fares that leave little room for increased profits, noting that some commercial shuttle operators (popularly known as Korope) now earn more than app-based drivers.

“It has affected drivers to the extent that Korope is making more profit than e-hailing. Drivers are earning less than what they were earning before the price of fuel changed,” he said.

As commuters adjust their travel habits and drivers grapple with rising operating costs, ride-hailing operators said they are adapting to the changing market.

While highlighting the impact of inflation and high fuel prices on the cost of mobility services, they say they are introducing measures aimed at keeping their platforms affordable for passengers while ensuring drivers continue to earn sustainably.

Teddy Appa-Dankyi, senior general manager West Africa at Bolt, said the current economic condition has made commuters more deliberate about their transport choices.

“Economic conditions have influenced how people move around cities, and we’re seeing riders become more intentional about their transportation choices,” Appa-Dankyi said.

He noted that while rising fuel prices, inflation, and higher vehicle operating costs have increased the cost of ride-hailing services, the company continues to balance affordability for riders with sustainable earnings for drivers by regularly reviewing market conditions.

“As affordability remains an important consideration, ride-hailing continues to play a vital role for many commuters who value convenience, reliability, safety, and time savings. We are also seeing users explore different ride categories depending on their budget and travel needs at a given time,” Appa-Dankyi said.

He added that Bolt is responding to changing commuter behaviour by investing in more affordable ride options and initiatives that support drivers, including rewards programmes, safety initiatives, and access to discounted health insurance.

While recognising that many commuters now combine ride-hailing with public transport depending on cost and convenience, Appa-Dankyi maintained that ride-hailing remains a reliable and accessible mobility option that complements, rather than competes with, other modes of transportation.

Wael Ibrahim, regional director, Europe, Middle East, and Africa (EMEA) at inDrive, told BusinessDay that the company is addressing affordability by allowing passengers to negotiate fares directly with drivers instead of relying solely on algorithm-driven pricing.

According to Ibrahim, the model gives riders the flexibility to propose fares that suit their budgets while allowing drivers to accept offers they consider fair.

He also said passengers can choose their preferred drivers, newer vehicles and more comfortable trips.

“We gave passengers a choice. We enabled passengers to name their price and choose their drivers, a choice they never had before in Nigeria,” Ibrahim said.