Two of the biggest ride-hailing cars Uber and Bolt have increased the cost of rides within Lagos and other major cities in the country by over 100%. Most working-class Nigerians who do not have cars rely heavily on these companies for their daily commuting.
This is according to information gathered from riders and drivers of both ride-hailing firms in Lagos and Abuja. Drivers inform Nairametrics that the reason for the increase in price is due to fuel scarcity that has hit major cities across the country.
The drivers opine that the fuel scarcity means fewer cars are available for riders to pick making thus creating a surge in price that is more than double the typical ride. For example, a ride from Lekki to Ikorodu road that was typically between N2,500 and N3,000 jumped to as high as N6,000 on Sunday.
Nairametrics is yet to confirm from the ride-hailing companies if fuel scarcity is the basis for the increase in fares.
Dent in Purchasing Power
Thousands of commuters rely heavily on ride-hailing cars and bikes to move around across cities in the country. Thus, the increase in ride fares will surely hit their disposable income further denting their purchasing power.
- To make matters worse, WFH policies previously adopted by companies to address Covid-19 provisions have been relaxed, meaning more people need to ride to work.
- The longer the fuel scarcity persists, the harder it is for ordinary Nigerians to afford ride-hailing-based transportation.
- Some drivers are also adversely affected by the increase in fares and have mostly reacted by requesting that riders pay them in cash or transfers to their accounts rather than through online payments to ride-hailing firms. The latter means they wait longer for their money and also incur higher charges.
Rising Energy Prices
- Nigeria has been hit by fuel scarcity over the last two weeks as contaminated imported fuel caused a supply shock that has continued to persist. Long queues are still seen at major filling stations while black market operators continue to sell at nearly twice the pump price.
- Nigeria still imports petroleum products despite billions spent and promises by the Buhari administration to fix the refineries. Nigeria still subsidizes fuel despite running massive budget deficits.
- The increase in general prices is not a surprise considering how perfectly correlated to fuel price increase is with transportation costs. Nigeria is also not the only country facing higher energy prices.
- Globally, energy prices have increased due to the rise in crude oil prices and the escalating Russia/Ukraine war.
- Nairametrics expects further price increases in food, consumer goods, and other products that rely on transportation to get to consumers.
- Diesel prices have also risen in recent weeks to as high as N430/liter adding to higher input costs for industries and residents who rely on the product.