Innovate or Die: Lagos taxi drivers want a level playing field with Uber and Bolt
Lagos State Taxi Drivers and Cab Operators Association is trying to adapt tech to stand a chance against the liked of Uber and Bolt.
The Lagos State Taxi Drivers & Cab Operators Association (LSTDCOA) is making frantic efforts to adopt technology that would enable its members to reasonably compete with Uber and Bolt.
For an association without any digital footprints — neither a website nor social media profiles — besides press mentions, LSTDCOA tried moving the needle towards adopting technology in 2020.
The Association announced partnership with two Nigerian ride-hailing platforms Ekocab and UNIVASA in March and December, respectively. The crux of the partnerships is to onboard LSTDCOA members on Ekocab and UNIVASA platforms and make their service accessible to millions of Lagosians. Just like Uber and Bolt.
Since Uber, an American transport company, launched in Lagos in 2014 and Bolt (formerly Takso and Taxify), an Estonian company, joined in 2016, yellow taxi drivers have seen their sales plunge.
"When Uber and the other ride-hailing platforms launched during the administration of former Governor Akinwunmi Ambode, our members thought nothing would happen to their business", President of LSTDCOA, Otunba Omolekan Taiwo, said while announcing the Association’s partnership with UNIVASA on December 7, 2020. "But now, we’ve seen that their operation is affecting our business. And our members have seen that technology is the ultimate; if you can’t beat them, you have to join them".
"So, in March, we announced a partnership with Ekocab, but I’m not satisfied with how they are operating. That’s why we’re partnering with another ride-hailing platform (UNIVASA)", Otunba Omolekan explained. "I know more than 200 members of our Association who left because we didn’t embrace technology. With these partnerships, we’ll bring back all those who left to join ride-hailing platforms and restore the glory of Lagos yellow taxis".
It should be noted that Otunba Omolekan was not the president of LSTDCOA when the partnership with Ekocab was announced on March 10, 2020. Then, he was the general secretary and only became the president in August. Now serving alongside him as general secretary is Mike Oladipo.
The Lagos State Taxi Drivers & Cab Operators Association is not the only Luddite, the National Union of Road Transport Workers (NURTW) is also a Luddite, too, with neither a cohesive digital footprint nor an online platform. Surprisingly, the Association of Amalgamated Commercial Motorcycle and Tricycle, Owners, Repairers, and Riders Association of Nigeria (ACOMORAN) has a website, albeit a placeholder that’s not up to date.
Despite his dissatisfaction with Ekocab, Otunba Omolekan told me their partnership subsists. And the CEO of Ekocab, Segun Cole, agrees. "Our partnership with the Association remains", Segun said. "And we are working in collaboration with the Lagos State Government on our Drive to Own project, backed by our financial partners".
A level playing field with Uber and Bolt
Two features are prominent in Uber’s and Bolt’s marketing materials to users: ease and comfort. These selling points assure users they can easily book a comfy ride with their smartphones. But this is not the case with yellow taxis. Most of the LSTDCOA members use rickety cars that the upwardly mobile and digital savvy who use ride-hailing platforms don’t like.
The ramshackle phenomenon is present across the two associations and union: LSTDCOA, ACOMORAN, and NURTW. Although fewer rickety motorbikes ply Lagos roads. The yellow buses (AKA danfo) used by NURTW members, however, are mostly sheets of tin arbitrarily welded with wood which serve as chairs for passengers. Attempts to ensure danfos are properly maintained and only those in good condition are on the roads have been abortive.
During the administration of former Governor Bola Ahmed Tinubu, the Lagos State Government issued an order that would ensure danfos are well-maintained by subjecting them to a test carried out by the Ministry of Transportation. But danfo drivers protested with a strike action and the order was quashed.
Otunba Omolekan explained that the LSTDCOA members are using rickety cars because they are not completing enough rides. And they are not completing enough rides because they are being shortchanged.
"Since the ride-hailing platforms came onboard during Ambode’s administration, yellow taxis have been disallowed from entering almost all the estates, Eko Hotel, UNILAG (University of Lagos), and the local and international airports", Otunba Omolekan lamented.
"All this discrimination is why our members are using rickety cars. We’ve signed an agreement with a bank to collect ₦500 million loan to buy new cars for our members. But with this discrimination, if we collect it and don’t have a level playing field to operate, how are we going to repay the loan?"
Indeed some establishments, including estates and schools, disallow yellow taxis from entering their premises. (Ditto danfos, tricycles and motorbikes). But because the cars used by Uber and Bolt drivers are not branded and are usually in better condition, they are allowed anywhere personal cars are allowed.
In 2009, as part of the Modern Taxi Scheme, LSTDCOA president said the Association received ₦873 million from Union Bank (₦523 million) and First Bank (₦350 million) to buy new cars for its members. Otunba Omolekan said some sceptics were doubtful of their ability to pay back, "but we paid and we’re not indebted to Union Bank and First Bank".
"That time, there was no discrimination. We had access to all the estates, UNILAG, and Eko Hotel", Otunba Omolekan said. "Now, because we don’t have access to those places again, drivers on other ride-hailing platforms have an edge over our members".
Lagos Taxi Drivers partnership with Ekocab and UNIVASA
How is it that UNIVASA’s partnership with LSTDCOA does not flout the non-compete agreement the Association signed with Ekocab?
When I asked Otunba Omolekan, he quipped that the market is big enough for both of them — UNIVASA and Ekocab. The CEO of Ekocab echoed the same sentiment, but added, "the agreement they [UNIVASA] signed with the Taxi Association, which I have gone through, is strictly to onboard the old babas and their rickety cars, nothing else".
"We were never going to onboard those babas. But unfortunately, at our launch [in March] they came with 40 Nissan Primera they just purchased with a micro-finance loan. That’s the picture that was captured. And the Twitter backlash happened", Segun said.
The announcement of Ekocab’s partnership with Lagos State Taxi Drivers came on the heels of restricting bikes and tricycles from operating in 22 local government areas (out of the 37 LGAs in Lagos). Hence, Ekocab got the flak for sabotaging the business of bike-hailing startups to launch a ride-hailing platform in cahoot with the State Government.
1. Pretends not to see the conflict of interest of advising on. regulating the industry you're building for.— RIP to all the Fallen. (@eldivyn) March 12, 2020
2. Admits he's regulatory adviser for the industry but pretends he has nothing to do with the policies enacted.
3. Conveniently leaves out his relationship to the Gov. https://t.co/KsrfQdbufR
For a democratic state government, such an underhanded strategy was not expected. Since Bolt and Uber launched, there have been instances of new ride-hailing platforms using smear campaign of the competition as a tactic in their market entry strategy. Capitalism permits businesses to do that, but good governance constricts governments.
The CEO of Ekocab continued, "We had trained 100 taxi drivers between the ages of 25 and 45. The president of the taxi drivers tried persuading us to go ahead with training the babas and onboarding their vehicles. But we could go against our standard requirements for both drivers and vehicles. Besides, Uber and Bolt already changed the game, we can't come out with something subpar, and there was also the new state regulation on vehicle standards".
The requirements for cars on Bolt and Uber not only differ, but also each of their offerings has different requirements. Also, the Lagos State Government rolled out a new regulation for "online hailing business operation of taxi" on August 27, 2020. The new regulation introduced licence fees of ₦8 million and ₦20 million, and ₦20 fee levied on each ride for Road Improvement Fund.
UPDATE: Today, The Lagos State Govt had a meeting with the E-Hailing Ride Stakeholders which was chaired by the Governor of Lagos State, Mr @jidesanwoolu at the Lagos House, Marina .. The Following resolutions were made which was agreed by ALL Parties: @Boltapp_ng @UberNigeria pic.twitter.com/WNrayVzpMG— Gawat Jubril A. (@Mr_JAGss) August 14, 2020
The partnership between UNIVASA and Lagos Taxi Drivers is aptly named "BABA DEY ONLINE". The CEO of UNIVASA, Ben Adeniyi, explained, "We want people to know that the baba they usually say is outside when they use yellow taxi is now online".
"Our vision is to unify the transportation industry in Lagos State. We believe that through the success of this partnership, other cab operators would be interested in joining the Lagos State Taxi Drivers and Cab Operators Association", he added.
"One of the advantages my organisation has identified is that there are some places where the drivers on other ride-hailing platforms don't like to go. Places like Ajangbadi and Badagry. Because they always consider how they would go back home. But because of the network of parks yellow taxi drivers have, they can go anywhere even if it’s far from their home. They would just rest at any of the parks nearest to the destination".
According to the president of LSTDCOA, there are 283 yellow taxi parks across Lagos, which are coordinated by 16 branches. And their headquarters is situated in Oshodi.
Ride-hailing is difficult, moreso competing with Bolt and Uber
Afrocab, GoMyWay, Easy Taxi, and Smartcab Nigeria. These are all indigenous ride-hailing companies that were unsuccessful in competing with Uber and Bolt. While internal factors contributed to the failure of some of them, it is important to note that both Uber and Bolt have raised $25.2 billion and $215 million, respectively. And that’s a big war chest difficult to compete against.
But some local ride-hailing companies are still fighting it out. Notably, in addition to Ekocab and UNIVASA Nigeria Limited, Jekalo, BMP Car, rida, inDriver, and Pullup. Although each of them are trying out different models, they are yet to gain mass adoption. "Never heard of Jekalo, inDriver, rida and Oga Driver. But I genuinely don’t consider Ekocab and UNIVASA to be actually businesses", Ugo tweeted.
Never heard of jekalo, inDriver, rida and Oga Driver but I genuinely don’t consider Ekocab and Univasa to be actually businesses— Ugo (@UgoTalksAlot) December 26, 2020
And that is a valid sentiment. The CEO of Ekocab Segun Cole also told me, "From little research, UNIVASA is a white label of different apps. They probably just wanted to use these babas to pilot their app". While I don’t expect him to have flattery comments about a potential competitor, he is correct in saying UNIVASA is a white label app.
This is not the first outing of UNIVASA Nigeria Limited, which also goes by the name Bemas Technologies Limited. While UNIVASA describes itself as "one-stop solution provider to fulfil your daily needs via our cutting-edge digital technology", Bemas says it is "a full-service IT [information technology] solutions provider and consulting firm". And in 2017, Bemas had launched Universa E-Mobile top up. And even now, there are six UNIVASA apps in the Play Store.
Although it is not functional (at the time of filing this report), you can download the UNIVASA User app to use "BABA DEY ONLINE" and other consumer services UNIVASA provides. Similarly, Ekocab is inactive too. But the CEO said they have plans of replicating their current model in other Nigerian states in Q1 2021 and roll out 1,000 tokunbo (fairly used) cars.
"In addition to this, we would also be providing vehicle documentation funding for driver-partners, to be able to secure documents, unlike other apps that shut out their drivers if they don't have the right documents", Segun said. "We have a multi-modal vision. We plan to incorporate other modes of transport, from waterferries, to BRT Transit, electric vehicles, e-bikes, e-mopeds, e-scooters, e-rickshaws".
Ekocab and UNIVASA have lofty dreams and ideas but, at the moment, cannot be considered contenders in the ride-hailing race. And as such Lagos State Taxi Drivers and Cab Operators should revise their partnership and technology adoption strategy. Perhaps, they can consider working with the biguns — Uber and Bolt.
For the ride-hailing platforms still tugging it out, they would need four things to succeed: idea, product, team, and execution as identified in Afrocab's post-mortem. Afrocab failed because it had only one of the four: idea.