Uber and its rivals are struggling to keep both drivers and riders happy in Lagos

Uber and its rivals are struggling to keep both drivers and riders happy in Lagos

Must Read

List of Guaranty Trust Bank Sort Codes & Branches (with addresses) in Nigeria

The sort code is a number which usually identifies both the bank and the branch where an account is...

Getting Your Workplace Ready For COVID-19

In January 2020 the World Health Organization (WHO) declared the outbreak of a new coronavirus disease in Hubei Province, China...

Top 10 Most Expensive Universities In Nigeria

For many Nigerians, high-quality higher education is a luxury. There are many private universities who are known not only...
- Advertisement -
- Advertisement -

It was only a year ago that Uber declared Lagos was potentially bigger than its London market, such was the unleashed pent-up demand for convenient and comfortable rides among the megacity’s fast-growing middle class.

But in recent weeks, the narrative has taken a very different turn as its push to win as many customers as possible in the face of stiffer competition has led to severe clashes with its drivers.

The problems and disputes had been quietly brewing for a long while and point to the difficulty of translating the Uber model to a cutthroat and difficult market like Lagos.

Uber’s Lagos drivers went on strike last month soon after the ride-sharing giant slashed fares by 40%. Uber argued the fare cut “should get more people requesting more rides” but drivers say they are being short-changed by the company.

Controversy around revenue-sharing with drivers isn’t unique to Uber Lagos, of course. The ride-sharing giant has dealt with the issue in many cities around the world in the United States, United Kingdom, South Africa and Kenya, among others. For the most part, Uber continues to seem to get away with such driver complaints. In Kenya, it even got the government’s support against Uber Nairobi drivers.

One Lagos driver who spoke to Quartz says Uber’s refusal to reduce its commission even while cutting the fares for customers has led to some drivers devising private ways of making money within the Uber ecosystem.

“Some of my colleagues are asking passengers to allow them to take the trip offline so that it would appear as if the ride was cancelled and Uber will not be collecting any commission from the cash payment the driver would receive,” claims the driver, who asked not to be identified.

One danger of that practice is it opens up drivers to the added risk of some of the criminal elements of Lagos. In April, an Uber driver was murdered after he’d made a private arrangement with a customer who was part of a gang of armed robbers.

Local Uber drivers say they were aghast at what they perceived to be the company’s attempts to distance itself from responsibility connected to the murder case. That bolstered their decision to go on strike say some drivers. Now they are demanding better safety response plans from Uber including improved rider verification. But their main gripe is they want Uber to drop the 40% fare promotion and reduce its commission from 25% to 10%.

Uber’s driver troubles come just as an Estonian-founded e-hailing app Taxify expanded to Nigeria. Even though Lagos has well over a dozen mostly homegrown e-hailing apps, few have been able to give Uber meaningful competition for any length of time in the three years since it launched in Lagos.

Read:  Uber celebrates three years in Nigeria

Yet, Taxify seems to have made something of a dent, however small. It could be its timing has just been better than other rivals, arriving at a time of upheaval for Uber in Lagos. Its strategy is to fight for market share without taking on deep-pocketed Uber in a cash battle. Instead it is trying to get the drivers on its side.


“We treat driver-partners better so that they can offer high quality service to customers,” says Taxify’s operation manager in Lagos, Uche Okafor. He points to its commission of 15% versus 20-25% versus its competitors. That lower commission probably helps offset its own 40% fare cut in competition with Uber Lagos.

In an unusual competitor move, just a few days after Uber’s 40% fare cut was announced Taxify actually halved its customer discount to 20% from 40%. This, in effect, allowed drivers to earn even more per trip and this put more pressure on Uber to reverse its price slash.

Taxify is rapidly expanding and gaining traction in Africa even though it has only raised €2 million compared to eight-year old Uber which had raised more than $15 billion in equity and debt by last year. Based on conversations with drivers and following their social media chatter, it seems more Uber Lagos drivers are joining the Taxify platform and are either on both platforms or have switched sides completely.

Uber’s difficulties in Lagos are also highlighted by how it has had to cut back its geographical coverage of the sprawling city. It now aims to restrict its drivers to the upmarket Lagos island areas of Ikoyi, Victoria Island and Lekki and closer mainland neighborhoods like Yaba

It means more drivers will be concentrated in a smaller area so there’ll be more drivers competing for Uber requests even though the number of passengers won’t necessarily rise. Uber says it wants to ensure there are fewer “dead kilometers” between trips. “We’ve reduced our service area from where you can request trips, to make sure that there is more reliability in the core areas of Lagos,” it said in a statement. “This smaller service area means more reliable rides when you need them.”

Driver efficiency

A likely trigger is Lagos’ notorious traffic jams particularly between the island neighborhoods where one presumes a lot of Uber’s customers are located, and the farther outskirts of Lagos beyond the core mainland. Uber is saying you can take an Uber from the island to anywhere in Lagos but don’t expect to get an Uber from there back to the island.

Read:  Africa's app-based taxis battle Uber over market share

“This will ensure efficiency for drivers in Lagos as it will lower estimated times of arrival (ETA) for riders as more driver-partners are made available around the core service area,” says Uber.

Anecdotally, using Uber in Lagos can be a bit hit and miss, especially if you’re outside what it now sees as its core coverage areas. Ride waiting times can suddenly escalate from an initial promise of five minutes to 15 minutes or more and then keep refreshing without any time change till the rider gives up and cancels to request a ride again.

From Uber’s perspective a driver is usually in one of three states: sitting idle waiting for a trip; on their way to pick up a rider; or carrying a rider to their destination which is the only time a driver’s earning a fare. Uber argues by restricting the Lagos coverage area it will lower estimated times of arrivals and increase the time in an hour when a driver is earning a fare. “The best way to do that is by offering riders a ETA that’s hard to refuse.”

It could be another opportunity for rivals to win more riders from Uber, but in truth the Lagos vehicle traffic can be so bad between the various deeper suburbs of Lagos that the rivals may eventually find it makes sense to mimic Uber in limiting the reach of their service.

Naturally, Uber describes this all as fair game. “Competition and choice mean we all have to up our game, and constantly innovate to improve our service and quality,” Uber said in another statement.

Taxify agrees increased competition in a city the size of Lagos with over 20 million people, is inevitable and will help ease the transport difficulties here. “Ride-hailing technology has the potential of easing up a lot of tension,” says Taxify’s Okafor. “One vehicle servicing the transport needs of up to 50 residents would lead to reduced traffic bottlenecks and a saner city.”

Read:  Enyo Retail And Supply Expands Its Footprints, Launches # Fuelledbytrust Initiative

*Correction: The story previously said Taxify’s discount was 30% it has been corrected to show it was 40% and reduced to 20%.

Written by: Paul Adepoju (A Lagos-based writer who covers technology, health and business in the West African region. Follow him @pauladepoju)

- Advertisement -

Subscribe to BrandSpur Ng

Subscribe for latest updates. Signup to best of brands and business news, informed analysis and opinions among others that can propel you, your business or brand to greater heights.


Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Latest News

MTN Ghana delivers double-digit growth for the year 2019

MTN Ghana (Scancom PLC or MTNGH or the Company) delivered a strong performance for the year in a competitive...

Will NERC’s recent effort end ‘Crazy Billing’ by Discos?

A quick overview of the Nigerian Electricity Supply Industry For decades, the Nigerian Electricity Supply Industry has been plagued with several challenges across the entire...

Funke Akindele, Kate Henshaw, Ramsey Nouah, Ik Osakioduwa, Dakore Egbuson, Others Party At 7th AMVCA Sponsors and Nominees Cocktail

On Thursday, 27th February 2020, MultiChoice hosted a number of celebrities at the 7th Africa Magic Viewers Choice Awards (AMVCA) nominees cocktail who all...

Local Bourse Sees Highest Week-On-Week Decline in 10-Months Amidst Coronavirus Scare-Induced Sell-Off

EQUITY MARKET The Nigerian equity market this week went on a losing streak as investors continued to restructure their portfolio to safe-haven over the possible...

GTBank Will Win The War Within The Digital Payment Space – Agbaje

Mr Segun Agbaje, Chief Executive Officer, Guaranty Trust Bank (GTBank) says the bank will continue focusing on caring about human feelings to win the...
%d bloggers like this: