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Gokada returns amidst price war, market expansion and government regulations 

ORide’s entry strategy was a wish come true for many Nigerians, and while the expectation is that market rivalry will drop prices to keep their customers from porting to ORide, Gokada has distanced itself from such a move. 

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Gokada, Gokada, MaxNG slam Lagos government, says okada ban insensitive, calls for sector regularization

When ORide entered the bike-hailing market, its competitive pricing threatened a price war among market competitors and this possibility excited the customers and other stakeholders; however, Nigerians might not eventually get that battle which the country experienced three years ago with the cola-war. 

ORide’s entry strategy was a wish come true for many Nigerians, and while the expectation is that market rivalry will drop prices to keep their customers from porting to ORide, Gokada has distanced itself from such a move. 

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Gokada had been the player expected to lead the charge against ORide, but the company has other plans and it doesn’t involve the Chinese bike-hailing company. Gokada told Nairametrics that the company’s activities are not being determined by its rivals’ operation. 

How Gokada’s contract works: The company bears the cost 100% upfront, and then the GPilots (riders) pay a fixed amount from Monday to Friday for a 2-year period. When they are done with the payment, they own the asset and can decide to stay on the platform at a reduced cost or leave. 

[READ MORE: Gokada suspends operation in Nigeria two years after establishment]

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Gokada isn’t stepping into the ring: The pioneer of bike-hailing business in Nigeria said that it has built a brand over the years that attracts customers without having to offer discounts, and intends to build on it. Recall that Gokada had previously shut down operations on August 14, 2019, and resumed on August 26, 2019. 

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According to the company’s Co-CEO, Ayodeji Adewunmi, engaging in a price war is not a sustainable strategy, “I think like a brand and a company, we are not going to get into a price war. We don’t think this is a sustainable strategy. We would rather focus on the experience, and the reason we think this is important is that currently today, for every order we are fulfilling, we get about 15 additional orders we can’t fulfil. So it clearly shows that the market is there.  

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“We are also positioning the brand as a premium brand and we believe that once the experience is in place and as we keep growing, we will definitely be able to meet the current demand. Overall, we believe the market will grow. 

“So for us, it’s not about offering discounts to be able to attract customers, because we already believe that we have a brand that attracts enough customers. Even with more brands (competitors) on the road, demand will continue growing,” Adewunmi said in a discussion with Nairametrics. 

Market expansion and rival’s pace: With ORide already in three more states apart from Lagos, Gokada insists on making Lagos its fortress rather than allowing the expansion of ORide across Nigeria to dictate its pace. Gokada says that it’s not in a hurry to expand like its competitors; rather, it prefers to do the bike-hailing service better. 

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While users of Gokada have not been complaining of the app’s functionality, complaints about ORide’s app have been on the rise. However, ORide has over a million downloads, while Gokada has only managed over 100,000; although this doesn’t determine the number of rides ordered on both hailing apps. 

[READ ALSO: Why Gokada should be worried about shutdown]

But for Adewunmi, the revenue potential of the bike-hailing market in Lagos is enormous, so there’s no need to rush to conquer new grounds. “We will not go to other cities because competitors are in other cities. We believe that Lagos is a massive opportunity, Lagos is approximately 750,000 okada market and on the back of the 750,000 okada, we are talking about 4 to 5 million rides a day. 

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“And on the back of that, we are talking about 3 to 4 and 5 billion dollar revenue opportunities. So we are not in a rush to be everywhere at the same time. Also, we are careful about how we deploy our capital because, at the end of the day, we believe that will be what differentiates us. Lagos State’s potential upside is really tremendous.” 

Gokada

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Gokada open to regulation: While the talk of possible regulation by the Lagos State Government has drawn criticism and also been described as a threat to the growth of the bike-hailing market, Adewunmi says that regulation of the business will create an advantage for players in the market and attract needed investors. 

I think regulation will create a lot of advantages for the business. It will create the enabling environment for even more investment to come to space. So it’s something that we 100% embrace.” 

He also added that the company is working with the executive, and legislative arms of government to ensure that whatever the conclusion is, “we can contribute to the regulation.” 

[READ FURTHER: Is ORide behind Gokada’s shutdown of operations?]

Patricia

Olalekan is a certified media practitioner from the Nigerian Institute of Journalism (NIJ). In the era of media convergence, Olalekan is a valuable asset, with ability to curate and broadcast news. His zeal to write was developed out of passion to shape people’s thought and opinion; serving as a guideline for their daily lives. Contact for tips: [email protected]

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Hospitality & Travel

Passengers can now arrive 90 minutes before departure for domestic flights – FG

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international passengers, Coronavirus: FG enforces immediate screening of travellers at airports with new directive

The Federal Government has announced the reduction of arrival time for passengers from three hours to one hour and a half before departure for domestic flights.

This was disclosed in a tweet post by the Minister for Aviation, Hadi Sirika, through his Twitter handle on Monday, July 13, 2020.

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The minister said that the decision was arrived at after they have reviewed passenger facilitation at the airport while noting that passengers should check-in online.

In the tweet post, Sirika said, ‘’My colleagues and I have reviewed passenger facilitation at our airports, consequently I am happy to announce that, henceforth travellers are to arrive one hour and half before their departure time for domestic flights. Travellers are advised to check-in online, please.’’

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It can be recalled that the Federal Airports Authority of Nigeria (FAAN) had earlier in June issued flight resumption protocol for both international and local passengers across the country, advising passengers to arrive at the airport three hours before their time due to the new COVID-19 safety checks for domestic flight operations and five hours for international flight operations.

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Economy & Politics

Seyi Makinde Proposes N3 billion investment plan for water supply

The local governments in Oyo are advised to submit a list of 10 faulty boreholes in the LG. 

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Seyi Makinde Proposes N3 Billion plan for water supply

The Governor of Oyo State, Seyi Makinde announced the proposal of a N3 billion investment plan dedicated to water supply in rural and urban areas of the state.

Speaking through the Chairman of Rural Water Supply and Sanitation Agency (RUWASSA), Mr. Najeem Omirinde in Ibadan on Monday, he added that N500 million of the N3 billion would be used for repairing broken and faulty state-owned boreholes.

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All Chairmen of each of the Local Governments in Oyo are advised to submit a list of 10 faulty boreholes in the Local governments.

The Oyo State governor also ordered that all new boreholes must be compliant with solar-powered pumps, to enable their longevity and save costs.

Urging residents to patronize the agency if they need to dig up boreholes for water, citing that it would be cheaper if done through the state agency than with private drilling companies.

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Minister of Finance, Zainab Ahmed stated last year that Nigeria needs an estimated N36 trillion annually for the next 30 years to solve Nigeria’s infrastructure problem. The investment, although a tiny fraction of what Nigeria needs is a bold step by the Oyo State government.

 

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Economy & Politics

FG asks UK court for more time to appeal $9.6 billion arbitration judgement

Malami stated that the Evidence of P&ID’s highly orchestrated scam had only recently come to light. 

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FG asks UK court for more time to appeal $9.6 billion arbitration judgement

The Federal Government has approached a UK court to appeal for more time to appeal the $9.6 billion arbitration award against it over the breach of contract with Process & Industrial Development (P&ID) Ltd.

Nigeria has said that it needs more time to pursue its argument that the 2010 gas supply contract with Process & Industrial Development Ltd was a sham.

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The legal dispute with P&ID is coming against the backdrop of the huge drop in the country’s revenue due to the collapse in oil prices globally. Nigeria had applied to US courts in March seeking for documents from 10 banks which includes Citigroup Inc. and JPMorgan Chase & Co, in a bid to prove its corruption allegations.

P&ID, however, has denied any wrongdoing in the whole transaction, arguing that Nigeria missed its opportunity to appeal.

The Nigerian Lawyer, Mark Howard, on Monday, the first morning of a 2-day hearing, said ‘’It is very unusual in a fraud case to discover a single smoking gun. By its very nature, fraud is conducted in secret, which makes it hard to detect and justifies an extension.’

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READ MORE: The effect of the United States’ Shale Oil on Nigeria?

The legal representatives for Nigeria are seeking another hearing for the judge to decide whether any misconduct has taken place and whether it justifies overturning the contract

The Attorney General and Minister for Justice, Abubakar Malami in a statement said, ‘’Evidence of P&ID’s highly orchestrated scam had only recently come to light.’’

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It can be recalled that last year, a UK judge upheld an earlier arbitration award to P&ID, which had accumulated to about $9.6 billion. The arbitration decision was over a failed contract to build a gas processing plant in the Southern city of Calabar.

The Nigerian lawyers disclosed that they have uncovered alleged bribes to government officials and their family members dating back to 2009.

Malami in his court filing on March 24, submitted that ‘’There is good reason to believe that ministers at the highest level were involved in a corrupt scheme to steal money from Nigeria.’’

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