Francis Ukoh, an independent car hire operator at Murtala Muhammed Airport Terminal 2 (MMA2), faces a recurring challenge: passengers often show him lower rates from e-hailing platforms like Uber and Bolt, especially during off-peak hours when these platforms offer discounted fares.
Ukoh, who operates outside the airport complex to avoid the N700 hourly parking fee within MMA2, is frequently caught in a difficult position.
“I know that some passengers will come to me and show me what Uber or Bolt is charging them, especially during off-peak hours,” Ukoh explained.
“It puts me in a tough spot because I know my rates are usually more affordable than the car hire operators inside the airport, but they still want to pay even less.”
Several other independent car hire operators confirmed similar experiences to Nairametrics.
- For Ukoh, this constant comparison between e-hailing fares and his own prices is a reality that shapes his day-to-day operations. The rise of e-hailing services has changed how people approach transportation, particularly at airports where both convenience and cost are key factors for travelers.
- While e-hailing platforms offer a level of convenience and accessibility that appeals to many, traditional car hire services, such as Ukoh’s, provide an alternative that combines personalized service with flexibility.
However, the increasing popularity of e-hailing platforms, especially with their dynamic pricing models, has made it challenging for independent operators like Ukoh to maintain their competitive edge. Yet, during peak periods when e-hailing rates surge due to high demand, passengers often find the rates of these independent car hire services operating outside MMA2 to be a welcome relief.
The unions, independent drivers, and the e-hailing disruption
The car hire landscape at Lagos airports is evolving, with traditional operators and e-hailing services each vying for a piece of the market. For passengers, the choice between these services often depends on their preferences for cost, convenience, and the reliability of the service.
Mrs. Onoroide, a regular air traveler in her 60s, values the reliability of traditional car hire services.
“At my age, I can’t walk around the airport with all my bags,” she said.
- After returning from a month-long vacation, she uses the escalator to the second floor of MMA2, while her young help takes the elevator with her four bags. They meet on the same level, where one of Etiese Sunday Ekpo’s cars, from Pedabom Global Cargo & Logistics Limited, is waiting for her.
- Before her flight from Warri, Mrs. Onoroide had already informed Ekpo of her arrival, ensuring a smooth pick-up.
“I’m not used to e-hailing,” she admits.
“I prefer a service that I have repeatedly used over time.”
- Ekpo, a member of the Airport Car Hire Association of Nigeria (ACHAN), operates car hire services from within the airport complex, paying N700 per hour for parking his vehicle in the second-floor car park. After agreeing on N45,000 for the ride to Victoria Island, Mrs. Onoroide appreciates the predictability and safety of the service, which she finds worth the cost.
- In contrast, a young lady visiting Lagos for the first time finds herself outside the airport complex without a relative to pick her up. She checks the e-hailing platforms, but the fares are steep, ranging from N20,000 to N25,000 due to the rush hour.
Opting for an independent car hire operator, she negotiates a fare of N10,000 to Ajao Estate—half the price of the e-hailing fare.
For her, the flexibility and affordability of the independent service were more appealing, especially when compared to the higher rates from e-hailing services during peak periods.
This contrast highlights the different paths passengers take based on their circumstances and preferences. While repeat customers like Mrs. Onoroide may prioritize reliability and familiarity, newcomers or those on a budget may find independent operators more accommodating.
The strain of e-hailing on traditional operators
The rise of e-hailing platforms has disrupted the car hire ecosystem, especially for independent operators like Ukoh. He explained how e-hailing services can offer lower rates during off-peak hours, making it difficult for traditional operators to compete.
“I don’t have the luxury like the e-hail operators who can just pick up another order right after dropping off a passenger,” Ukoh explained.
“Sometimes, I just have to let go, meaning I refuse to take such customers offering low prices. However, there are instances where I’m able to convince them to go further by explaining how our business models differ. For us, the cost of returning empty has to be factored in, unlike e-hailing drivers who can quickly find another passenger.”
- An anonymous Uber driver admitted to making offline arrangements with customers to account for the N700-per-hour parking fee incurred while waiting for passengers at the airport.
“I charge slightly higher than platform rates during these offline deals to bypass commission fees and still cover my expenses,” the driver explained.
- However, the driver acknowledged that offline arrangements are not always possible.
“When I have to accept platform rates, it feels like I’m getting less for my time and effort. But at least I know I’m securing a ride and can make up for it on the next trip,” he added.
- Other e-hailing drivers shared similar challenges operating within the airport. Ahmed, a driver with InDrive, told Nairametrics that he avoids waiting for orders inside the airport complex due to the parking fees.
“The parking charges are too high, so I rarely operate within the airport,” he said.
Instead, Ahmed focuses on high-demand areas like the Island.
“When I take passengers to the airport, some let me know when they’ll return so I can pick them up,” he noted.
“Many of my colleagues focus on the airport and are willing to pay the fees, but I prefer to work in areas where I avoid those charges.”
The evolving car hire landscape at Lagos airports
The car hire system at Lagos airports offers passengers a variety of options, shaped by the presence of multiple unions, independent operators, and the growing influence of e-hailing services.
- Unionized operators, such as those under the Airport Car Hire Association of Nigeria (ACHAN) and other unions, emphasize security and professionalism.
- Independent operators, on the other hand, bring a competitive edge with lower pricing strategies. Operators like Ukoh avoid high parking fees within the airport complex, allowing them to charge significantly less.
“While unionized drivers may charge N50,000 for a ride from Ikeja to Victoria Island, I offer the same trip for about N25,000,” Ukoh shared.
- However, he acknowledged that this pricing strategy faces challenges, especially when passengers use e-hailing fares as a benchmark to negotiate lower prices.
Despite competition from e-hailing services, independent operators thrive by offering flexibility and catering to a diverse clientele. From NYSC corps members to corporate executives, Ukoh’s customers value the affordability and adaptability of his services, particularly during peak hours when e-hailing fares surge.
