Over 2,500 ride-hailing apps, largely domestically developed ones, have tried to compete for commuters since US-based Uber entered the Nigerian market in 2014, in accordance with a high official of the Amalgamated Union of App-Based mostly Transporters of Nigeria (AUATON). Rising operational prices, regulatory hurdles, and the dominance of well-funded international gamers have made it practically unimaginable for native platforms to compete.
“Greater than 2,500 apps have tried to enter the market since Uber arrived in 2014,” Ibrahim Ayoade, common secretary of AUATON, advised TechCabal by cellphone. “That is primarily based on my information from their registration makes an attempt with us. Nonetheless, many of those apps fail to maintain operations as a result of aggressive panorama and difficult enterprise atmosphere.”
Nigeria’s ride-hailing market promised to ship comfort to commuters and a monetary lifeline to many drivers. But, the sector stays a tough enjoying area. Established international operators, with deep pockets and superior know-how, proceed to squeeze out homegrown alternate options.
Among the many casualties is Oga Taxi, Nigeria’s first indigenous ride-hailing app based by Michael Nnamadim, launched in 2014 however shut down after struggling to scale. Straightforward Taxi, a Brazilian platform that entered Nigeria in 2013, ceased operations in 2017 following its acquisition by Latin America’s Cabify.
Not a lot has been heard from T-Cab Rides, one other indigenous app launched in 2018. The ride-hailing firm co-founded by Samuel Ogunwus, allowed passengers to barter fares with drivers, just like Indrive. Nonetheless, the corporate seems to have ceased operations, given the inactivity on its social media accounts since 2019.
Alpha1 Rides, an indigenous ride-hailing firm based in 2017, tried to disrupt the Nigerian cab-hailing sector with its new journey system, together with workplace shuttles and limousines. Similar to T-Cab, its social media accounts have been inactive since 2020.
GoAfrik, a Nigerian logistics startup co-founded by Thomas Ajayi, launched Taxigo Nigeria in 2018, providing companies like taxi reserving, bike rides, courier supply, and on-demand logistics. Nonetheless, the platform has proven little to no exercise lately.
In line with AUATON, a number of ride-hailing apps have tried to problem Uber and Bolt in Nigeria, with most launching earlier than the COVID-19 pandemic in 2020. These embrace Oga Taxi, Sensible Trip, Gudride, Alpha 1, GLT, Jetride, Rideme, Tripz, Go247, T-cab, Taxigo, 9ja, Skyconnent, Phixama, Cruise, MotionPlus, Gidicab, Soole, BudgetRide, Zkyte, Straightforward Taxi, Afro Cab, Say Taxi, ProTaxi, Enivo, and Alakowe Taxi.
TechCabal findings present that at the least 16 of those platforms—together with Oga Taxi, Sensible Trip, Gudride, Alpha 1, GLT, RideMe, Tripz, Go247, T-cab, Taxigo, MotionPlus, Gidicab, Soole, Straightforward Taxi, Afro Cab, and HerRyde—are not operational in Nigeria.
“Logistics is a high-risk sector,” mentioned Ayodeji Ebo, managing director/chief enterprise officer at Optimus by Afrinvest Restricted.
Gas costs, coverage shifts, and the struggle for survival
Trip-hailing platforms have change into more and more widespread throughout Nigeria, particularly in main cities like Lagos and Abuja, pushed by their comfort, a big youthful inhabitants, and rising web penetration. Nonetheless, the sector faces challenges like inconsistent insurance policies, poor street infrastructure, driver complaints, and the shortage of digitized knowledge for environment friendly operations.
The challenges for ride-hailing corporations in Nigeria have solely intensified. The elimination of the nation’s petrol subsidy in Could 2023 triggered gasoline costs to surge by over 400%, dramatically rising drivers’ working prices. In line with the Nationwide Bureau of Statistics, the street transport sector contracted by 35.9% in 2023—down from a optimistic progress charge of 15.1% in 2022.
AUATON estimates that for the reason that subsidy elimination, the price of car upkeep has jumped by 200%, slashing driver earnings by 300%. Many drivers, already burdened by platform commissions and regulatory charges, are quitting the sector or chopping again on working hours
“The price of automotive upkeep has elevated considerably,” mentioned Bolude Olumuyiwa, a Lagos-based driver. “Repairing my automotive’s air con now prices ₦200,000 ($130), in comparison with lower than ₦100,000 a 12 months in the past.”
Even with fare hikes, drivers complain that their take-home pay stays unsustainable, whereas clients, hit by rising dwelling prices, are more and more abandoning ride-hailing apps for cheaper public transport.
Ayoade of AUATON believes that with out coverage help, native ride-hailing platforms will proceed to fail. “The one means these indigenous apps can succeed is thru authorities intervention—both by way of favorable rules or monetary help,” he mentioned.
LagRide, a government-backed ride-hailing service, is dropping traction, with fewer drivers utilizing the platform. CIG Motors, the Chinese language car firm that assembles and distributes GAC automobiles in Nigeria, lately took over the corporate’s operational administration.
In the meantime, new entrants like SimpliRide, a driver-led ride-hailing platform launched in March 2024, hope to buck the pattern by providing higher phrases to drivers. However trade consultants warn that with out long-term, affected person capital, many of those startups face the identical destiny as their predecessors.
“The payback interval for this capital must be longer,” mentioned Ebo of Afrinvest Restricted. “In any other case, these corporations received’t survive the pressures of speedy progress and profitability calls for.”
The ride-hailing trade’s future is unsure as corporations grapple with market share, profitability, and driver welfare. For now, the street to ride-hailing dominance in Nigeria stays one the place solely the strongest or the best-funded survive.
