Not many will reckon that bike-hailing company Opay has spent 365 days on this side of the globe. But they have been around for just about that, more or less.
A bit of background: Opay introduced ORide, a new and innovative on-demand motorbike ride-hailing service. It was actually launched in May 2019 in Nigeria, and officially announced its services in Lagos on June 2019 with immediate expansion plans throughout the nation.
However, the company announced its birthday on Twitter today. Perhaps, today holds a special significance they have decided to celebrate.
Since its entry, OPay has infused a different energy into the bike-hailing space in Nigeria. And today is a good day to bring to mind some of these:
Market Entry Discounts
Besides inspiring a better sense of safety, the notion of a traceable rider, online booking and other perks, one major difference between the new bike-hailing rides and the regular bikes is their pricing.
An average bike-hailing experience will cost you more than the regular transport system and a bit less than taxis. So, they offered faster alternatives even if they weren’t inclusive.
Oride’s massive discounts allowed peeps enjoy rides for as low as N100 ($0.28) in its first month and gradually increased the ceiling. The result? A lot of people tried the bike-hailing option. They also had to download the Opay app too.
While this is an impressive but costly market entry scheme, it captured a lot of users still. Including people who would rather use a taxi than try a bike of the same cost and people who felt it was way above their spending limits.
Little Things that Count
Other bike-hailing platforms may have been giving out raincoats before now. Maybe not. What is evident is that Oride made the gesture a prominent feature of their service.
Result? Peeps could still defy the rains and reach their destinations on time:
“We know that it is the rainy season. So, we provide the riders with the raincoat. The passengers also have a raincoat. It does not matter if it is raining, you can still get to your destination.”
Speaking on the idea, CEO, Iniabasi Akpan said…
Personally, I was on a competitor bike sometime ago on my way to a short notice meeting when we ran into unexpected rainfall. Our only succour was a tree shade we sought along the way. So, I know how it feels.
That raincoat idea was a thoughtful one.
A stand on the 25 million Levy
Some weeks ago, there was outrage on social media over an announcement that the Lagos State Government is considering a N25 million licensing fee (about $70,000) for bike-hailing platforms operating in the state.
This was in response to a very popular video online showing an Opay rider being harassed in the Ojota area of Lagos.
We reported shortly after that the Country Manager at OPay, Iniabasi Akpan, described the plan by the Lagos state government as a good development.
Here are his words:
I think it is a good thing. Hmm, we anticipated this because I mean if you are gonna also get serious players into the market, then you need to have people who are willing, you know, pay what it costs to run the business.
The other major players in the sector were silent about the development. Opay gave the first salvo at the licensing fee issue and it was an unexpected turn for many.
Fund Raising and the Expansion Drive
Some weeks back, Oride’s parent company Opera raised a $50 million funding. The funds were raised in a round led by Chinese VC investors Sequoia China, IDG Capital, and Source Code Capital.
If you recall, OPay indicated that it plans to use the generated capital to primarily grow and strengthen its digital finance business in Nigeria by boosting the growth of other Opera ventures (ORide and OFood).
Shortly after this, ORide was launched in Ibadan, Southwest Nigeria. In a space of a few weeks, Opay launched OTrike, a tricycle-hailing platform in Aba, Southeast Nigeria.
Similar to ORide, OTrike’s services can be assessed via the OPay app which features other services like food order and delivery, utility bills payment and cash access.
Of the major players in the space, Opay is so far the first and only platform to play in the food, ride, tricycle and delivery spaces at the same time.
Putting it all Together
A number of commenters on social media have expressed their doubts about the survival of Opay in a difficult business terrain like Nigeria especially with its expansion drive and unbelievable discounts.
Only a few realise that Opay is riding on a distinct strategy described by Professor Ndubuisi Ekekwe as “Double Play”.
This means, in his words: “Provided they bring volume, even when losing money, Opera will make its money from payment fees. That is the Double Play Strategy: lose money in one thing but make up in another.”
I will add that Opay has significantly changed the game within this short period. It brought real elements of competition that is making competitors acknowledge their flaws and decide to go back to the drawing board.
Opay is an indication of what difference a huge investment can make.
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