As Lagos Impounds 22 Gokada and Max.NG Bikes, is it Time for Bike Hailing Startups to Review their Models?

Bike hailing startups, Gokada and Max.NG are presently witnessing the biggest challenge to their sustainability.

According to PM News, operatives of the Lagos State Task Force have impounded 115 motocycles, popularly called Okadas, and arrested 10 okada riders operating in different parts of the state. 22 of the impounded bikes are owned and operated by Gokada and Max.NG.

JUST IN: Lagos State Environmental Sanitation and Special Offences impound 115 motorcycles including 22 branded commercial motorcycles called ‘Gokada and Maxokada’ for violating the state road traffic laws.

— Nairametrics (@Nairametrics) March 12, 2019

According to the chairman of the task force, Olayinka Egbeyemi, the okadas were operating on restricted routes. He also disclosed that some were driving against traffic in Ikeja, Ojota and Maryland areas of Lagos.

It was an eyesore seeing the operators of these newly-branded commercial motorcycles, ‘Gokada’ and ‘Maxokada’, in competition for the right of way with motorists on highways and bridges across the state.

He also went one step further labelling Gokada and Max.NG bike sharing business as illegal and undocumented with the state government. According to him, the task force is warning Gokada and Max.NG to comply with the state’s traffic laws as arrested riders will be prosecuted.

To be clear, Gokada and Max.NG rely on motorbikes to provide on-demand transportation and logistics services in Lagos.

There is a PR going on about how Lagos State Commissioner of Police clamping down on bike-hailing startups, GoKada and " MaxKada" saying they have no documentation or something of sort

Quite unclear, I've reached out to parties for comments.

Who else heard such announcement?

— Benjamin Dada (@DadaBen_) March 12, 2019

However, Lagos state has been going tough on commercial motorcycles over the last few years. In line with its status as a megacity, the state has heavily restricted commercial motorcycles from plying many major roads in the state.

Over the last two years, the state has banned okadas from operating on over 140 roads. And the list continues to increase as many other streets also restrict the movement of okadas either completely or after a particular time period.

So in the face of these regulations, the sustainability of the bike sharing model of Gokada and Max.NG was always shaky. Interestingly, these startups emerged right around the same time these regulations were being reinforced.

Lagos impounds 22 ‘Gokada’, ‘Maxokada’ motorcycles, 93 others …to prosecute 10 riders
React to this https://t.co/BfupUEs8Hl

— Punch Newspapers (@MobilePunch) March 13, 2019

However it’s not clear whether either startup has ever pursued any regulatory agreement with the state government. If they haven’t, it would explain why bikes belonging to both startups have been seized.

Unless they pursue some sort of licensing or regulatory agreement, these bike sharing startups will continue to run into huge problems with the state authorities. Any plans to expand beyond Lagos will also have to consider regulatory issues.

For now we wait.