ORide’s Run-For-Your Money Approach Is Adding Fuel To The Fire Started By Nigerian Bike-Hailing Startups
At the time cab-hailing startup Taxify was rebranding to Bolt, the CEO of the Estonian company, Marcus Villig, said something worthy of remembrance, at least now. The 25-year-old pointed out his belief that being a late entrant in a market can be to a company’s advantage.
Opera In With A Shout
Revealing the bridges burnt by its competitor Uber, the techpreneur said that Bolt had spent significantly less educating the ride-hailing market, picking new customers and on-boarding driver for its own private services. At this point, Marcus’ idea seems to define what’s going on in Nigeria’s bike-hailing sub-sector.
If you’re based in Lagos, by now you should know that there’s a new bike-hailing startup that is giving every other two-wheeled player in Nigeria’s busiest city a run for their money.
Opera’s new motorcycle-hailing startup, ORide – which is an offshoot of a previously launched product known as OPay – is charging just NGN 100 for rides shuttling between the mainland and island of the West African nation’s former Federal Capital Territory.
To put this shift into perspective, let’s address how much it normally costs to get around Lagos. Using public bus transport, it can cost you NGN 600 to get from the city’s capital, Ikeja, on the mainland to one of the most popular places on Lagos’ Island.
Once it involves crossing the Third Mainland Bridge, prices are bound to go up and even more when traffic crawls. For other bike-sharing startups, it could cost up to NGN 1,200.
Having read the story of how this woman’s day was saved this woman’s day, one would realize just how much this one month discount is putting on the table. A 99 percent off wooing is bound is to make things a lot more interesting.
Even though it will last for this June alone, this seemingly Herculean move is going to help ORide endear customers to itself. No one knows what other customer-centric gimmicks they’re going to pull off next, especially as ORide has appointed former editor-in-chief of Pulse Africa and Chief Correspondent of NET.ng, Osagie Alonge, as its new Director of Growth.
First off, ORide is more than the usual requesting-for-bikes app; it is also used to send and receive money fast and conveniently. A business that transcends the transportation sector poses a normal-than-usual competition for its Lagos-based rivals.
The discount is undoubtedly going to affect the engines of its competitors, and users of GoKada, and Max, as well as Ugandan SafeBoda who is expanding to Lagos, giving them something to think about if they are ever going to get the best of Nigeria’s commercial nerve.
Given the fact that users can also use the app for cash transactions, this startup not having so many two-wheelers on the road at a time does not mean its app is being underused.
Why The Tussle?
Lagos is a city of opportunity, receiving and accommodating droves of Nigerians and foreigners in search of that proverbial platinum fleece, either for white and blue collar jobs or entrepreneurship. In this city’s tech ecosystem, bike-hailing services are competing for traction and market share in a city that has for long been choked with some of Africa’s most pressing transportation challenges.
The on-demand idea is greener grass on the other side for millions of Lagosians tired of hours-long traffic jams and arriving at work and appointments late. Compared to cab-hailing services such as Uber and Taxify, bike-hailing is also cheaper and faster, especially in the wake of unnerving traffic congestions.
As conventional okadas (motorcycles) are often reckless and technically overbearing, these companies are selling and proving themselves to be the safer option it a city with many traffic rigors. This they are doing by employing the best cyclists and putting only quality motorcycles on the road, two-wheelers that surpass normal Okada in both model and sophistication.
Emphasizing on safety as well as comfort, the bikes carry only one passenger at a time, stress the need for the use of helmets and are integrating first aid boxes into their on-the-go- service packages.
Also, with the fast-developing attitude towards technology-driven companies and the growth of the ride-hailing industry, Lagosians are increasingly embracing this movement option, thanks to the approaches used by these startups who have also won the favor of investors.
There’s A Problem, Though?
In a related issue, many customers (passengers) of existing bike-hailing startups – GoKada especially – have complained about the indefinite and sometimes ridiculous pricing. Either the riders are running operations independent of their apps or they are needlessly inflating prices.
Given the fact that everything is digitally arranged, motorcyclists and passengers should not be negotiating prices. Some riders have even reportedly refused to take passengers to some certain areas for unspecified reasons.
While this information is not generalistic, it does throw light on the reality that ORide is starting off in Lagos with a good price statement. By offering NGN 100 rides across the city, they could be telling passengers that they’re entering the ride-sharing market with financial integrity, one very different from what previously existing biking companies seem to be practicing. As is obvious, Lagosians are complaining, not only about GoKada, but Max as well.
GoKada and co have held their own, and the discrepancies on both platforms is probably not the fault of the management teams. But ORide is doing something they aren’t – giving discounts and winning customers.
In terms of ease of use, the ORide app seems to blow that of GoKada and Max out of the water, since the former is based on a fintech solution known as OPay which customers can use to get free coupons and carry out other transactions. There have been reports of technical issues on the GoKada mobile.
The Numbers Are Encouraging
Max, an early ride-hailing startup contrived by two MIT alumni, currently has more than 1,000 motorcyclists and has completed more than 850,000 trips since it launched. Rivaling GoKada also boasts ore more than 1,000 riders to its services.
Aside from this, the bike-hailing sub-sector in attracting increased funding for different sets of reasons. GoKada recently banked USD 5.3 Mn in a Series A round mainly steered by the Rise Capital. The investment-related narrative from the firm was that it was going to expand its services within Lagos – not outside, and perhaps never.
Before GoKada’s fundraiser, Uganda’s SafeBoda announced an investment believed to be significant by millions as part of its intentions to expand into Lagos. ORide, who launched in May, has set-aside funding that could be in excess of USD 140 Mn. Max.ng has also received a total of USD 1.1 Mn in funding, and of these investments suggest the fierce battle going on in Africa’s largest city.
According to the National Bureau of Statistics, only 747 motorcycles were involved in road accidents in Nigeria in the last quarter of 2018, a period in which most road mishaps occur in the country, reportedly or superstitiously because of the “ember” festivities. In the same quarter, 1,312 saloon cars and 821 minibusses were involved in road accidents, while 460 trucks and 182 trailers did the same.
Most Lagosians are either driving saloon cars or taking the public minibus option. Given the safer nature of bikes over the two, customers are likely to take the two-wheeler. To be clear, this is a city where the use of motorcycles was banned, precisely in October 2017. But given the unrelenting traffic problem and the innovation obtainable, okadas could not remain under for long.
According to Goldman Sachs, the ride-hailing industry will balloon to USD 285 Bn by 2030. Vying to digitize a share of Africa’s market share, two-wheel transport startups represent a collective revenue pool of USD 4 Bn, which this TechSci study says is going to double to USD 9 Bn by 2021.
