Though Uber and Bolt (Taxify) changed the taxi system in Nigeria, both companies have a pricing method that isn’t fit for a country that is prone to traffic congestion like Nigeria. This erratic pricing system is why some Nigerians still favour the Yellow Taxi, and with InDriver, customers will now have the best of both services.
Before the advent of car-hailing service in Nigeria, there were regular taxis. Their outlooks and car types varied across states in the country: for Lagos residents, it was the yellow taxi. However, since Uber entered the Nigerian market in 2014, and Bolt in 2016, the Yellow Taxi operators have been gradually loosing patronage.
But while Technology and urban lifestyle might have diminished the value of Yellow Taxi in Lagos, there’s one feature that still makes the Oko Ashewo (as the yellow taxi is fondly called in Lagos) relevant in the era of car-hailing service — its payment system that shields customers from the risk of unpredictable ride fees.
Although Uber and Bolt offer price estimates before trips, the trip fee is determined by the time spent from one’s pickup point to the destination. This means that your fee is at the mercy of traffic, which Lagos State is highly prone to.
This is what differentiates the likes of Uber and Bolt from the Yellow Taxi. For the Yellow Taxi, a fixed price is agreed upon before the trip. So, traffic or not, your fee is fixed. Because of this distinct disparity in both services (Car-hailing and Yellow Taxi), Nigerians couldn’t have it both ways.
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Another disruption hit Nigeria’s taxi market
All that is changing. Now, Nigerians can have their cake and eat it too, with InDriver’s ‘trips on your terms’ service. The Russian car-hailing service allows riders (customers) to determine their fees from the comfort of their homes before their trips begin.
InDriver began operation in Nigeria in the second quarter of this year. The car-hailing company is offering Nigerians the distinctive features missing in Uber and Bolt, and the Yellow Taxi. Prospective riders hail a ride and bargain price with drivers who are ‘few minutes away.’
The business model of InDriver has a bidding-style, where drivers can counterbid the hailers’ preferred fees. The driver’s counterbid is often an additional N200 to N400 top-up on the initial price offered by the prospective rider. If both agree on a fare, the trip is accepted.
This pricing model solves the price risk placed on riders by Uber and Bolt. The problem with their pricing is that, apart from traffic congestion, some drivers often act like they are not familiar with the route to the rider’s destination. So if the rider isn’t familiar with the fastest routes, some Uber and Bolt drivers ply longer routes to inflate the fee.
More InDriver uniqueness
For InDriver, customers have various price options offered by the closest drivers. This means, drivers will be competing by offering competitive prices to lure you; so the ball is in your court.
While responding to an inquiry from Nairametrics, the company said, “Drivers are not automatically assigned to riders. Once the counteroffers are in, passengers select the most suitable driver in line with what categories are most important to them – fare, driver rating, estimated time of arrival or vehicle model.”
Drivers are not sanctioned
Unlike Uber which penalises drivers if they cancel trips they are assigned to, InDriver doesn’t sanction the drivers, so they can snub orders that don’t interest them.
“The drivers also may not accept every order. If they don’t like the price or destination, they may wait for the next order without any sanctions.”
Nairametrics was informed that for passengers to feel safer, they “can share their GPS locations and ride details in real-time from the app with trusted contacts.”
Why InDriver pricing system is different
Uber/Bolt ripping Nigerians off
As earlier stated, Uber and Bolt don’t allow customers to control trip prices, or have a say. This is the loophole that InDriver saw and decided to fill. The company told Nairametrics that the car-hailing market in Nigeria lacks transparency and fairness to riders and drivers of car-hailing service.
“Nigeria is a dynamic and fast-paced country. People here are active and mobile. But we feel there is a lack of transparency and fairness in Nigeria’s ride-hailing industry. Other ride-hail apps don’t leave any choice for local residents when it comes to the cost of the trip, while drivers are being charged very high commissions.
“InDriver came to change this situation, making rides more affordable for passengers on one hand and on the other hand increasing drivers’ income and letting them be their own boss.”
Commission has been the problem of the car-hailing service in Nigeria. Drivers are constantly in search of car-hailing apps that demand lower commissions, and that’s the difference between Uber and Bolt, and InDriver.
InDriver demands 8% from drivers, while Bolt and Uber demand almost double and triple of InDriver’s commission—15% and 25% respectively.
How will Uber/Bolt react?
InDriver has set the pace with its disruptive pricing model and commission level. This is a threat to the operation of Uber and Bolt. InDriver’s service offer is attractive and could compel customers and drivers of other car-hailing services to switch.
If Uber and Bolt plan to maintain their grip on the market and prevent migration of drivers to InDriver, they could present a counteroffer to remain competitive. However, they could just maintain the status quo, because InDriver also has a loophole.
InDriver has a problem too
While the operating system of InDriver is all shades of awesome, what makes it attractive to riders could also chase drivers away from it. Though the negotiation option favours riders, the amount that will be offered will be lower than that of Uber and Bolt. Also, the pricing model of Uber and Bolt favours the drivers, but it doesn’t favour the riders.
That’s where the commission acts as a deciding factor: lower fare (InDriver) versus higher fare (Uber and Bolt). So, it’s a dicey one for InDriver.
Note: For now, InDriver operates in Lagos, while Uber and Bolt operate in more Nigerian states. But InDriver is “extremely interested in expanding to other cities in Nigeria,” the company disclosed.
InDriver operates in 200 cities across 25 countries, part of which are Kenya, Uganda, South Africa, and Tanzania.