As the competition between ride-hailing services continues to be stiffer across the country especially in Lagos, there have been growing concerns among stakeholders concerning the sustainability of the mode of operation being employed by ride-hailing startups.
Reacting to Gokada’s temporary shutdown, which was disclosed yesterday, August 14, 2019, the Spokesperson of the Lagos State Chapter of the All Progressives Congress (APC), Joe Igbokwe made it known that it is impossible for bike-hailing startups in the ride-hailing industry to survive in a densely populated State like Lagos.
Igbokwe said the funds invested in ride-hailing startups should have been invested in the Bus Rapid Transit (BRT) operated by the Lagos State Government, adding that if given a free rein to operate, bike-hailing services would jeopardise the government’s investment in BRT.
“Instead of partnering with government on BRT, you invested 5.3 million dollars in okada business and expect that Lagos State will allow you to jeopardise its multi-billion (sic) naira mass transit investments,” he posted on Facebook.
While it is unclear if Igbokwe, who is set to be appointed as a member of Lagos State Executive Council, spoke on behalf of the State Government, it is important to note that there has been a rumour that the Babajide Sanwoolu–led administration is considering the imposition of new regulations, including annual licensing fees of N25 million and annual taxes on ride-hailing startups.
Nairametrics had reported the temporary shutdown of Gokada, the first bike-hailing startup in the country. The company’s decision to ‘temporarily exit the market immediately’ was informed by the personal experience of its Chief Executive Officer (CEO), Fahim Saleh on one of Gokada’s bikes in Victoria Island, Lagos.
What you should know: Nigeria’s ride-hailing industry is relatively new but it’s an emerging market that promises so much revenue to investors. Its entry barrier is, however, high and costly to operate.