Bargain Based Ride-Hailing App ‘InDriver’ Launches in Lagos; Will this Disrupt Business for Uber and Bolt?

InDriver, a global ride-hailing app that allows passengers negotiate the price of their trips with riders has launched its operations in Lagos.

The launch of InDriver in Lagos, Nigeria, is the fifth by the ride-hailing company in countries across Africa. The app has been launched in Kenya, South Africa, Tanzania and Uganda.

Explaining InDriver’s expansion into the African market, Egor Fedorov, Chief Marketing Officer of InDriver, told TechCrunch that the Africa’s high population and market size were deciding factors.

 We think Africa is going to be a big market for us because there’s a lot of cities and high population [areas] that still don’t have access to ride-hail applications.

Egor Fedorov, Chief Marketing Officer of InDriver

How InDriver Works

InDriver began its operations in 2013 by Arsen Tomsky who founded an online social network to allow passengers and drivers bargain prices in Yakutsk, Siberia. The start-up has since grown to become one of the top 10 ride-sharing apps worldwide by downloads. Operating in over 200 cities across 26 countries and providing services for over 29 million people.

Compared to the popular ride-hailing apps in Lagos which use algorithms to determine the price of trips, InDriver’s business model offers a twist.

Trips on InDriver are booked on the app which is available for download on playstore. After registering on the app, taxis can be hailed to the desired location by stating pick-up and drop off location. The amount you are willing to pay for the trip must also be stated.

Drivers in close proximity to the pick-up point will either confirm the order either by accepting the bid or presenting a counter bid. Once both parties agree on the fare, the driver can proceed to pick you up at your location.

InDriver does not operate from Nigeria just yet, but it regularly communicates with drivers via phone calls from its African support team in Cape Town, South Africa.

InDriver doesn’t charge new riders joining the app for the first 6 months. Even after the trial period, the company will charge around 8% which is lower than the commissions charged by their competitors.

This means that joining riders make more money for the first 6 months. However, once prices are agreed on, it stays fixed no matter what situation along the trip. So drivers may be greatly disadvantaged in situations where traffic is bad.

Ride-hailing Competition in Lagos

With Uber and Bolt having major stakes in the ride-hailing market in Lagos, a new entrant is bound to face major competition. InDriver’s business model, however, may give them an edge.

The passenger and rider on InDriver reach an agreement acceptable to both parties giving them choice as opposed to the controlled system where Uber’s price-fixing is susceptible to different variables in an economy like Nigeria.  

That said, InDriver is not the first start-up to attempt this bargaining style in Lagos. In 2014, AfroCab, a Nigerian based ride-hailing app, that allowed users to negotiate the price of fares launched in Lagos. However, AfroCab shut down in 2016 unable to compete with rivals and successfully sustain its model of business in Lagos.

InDriver stands a better chance of surviving than its predecessor it would seem. It has a stronger foundation as a global company with experience facing challenges common with market saturation.

In addition, InDriver has the opportunity to exploit the market segment that doesn’t have bank accounts. According to the World Bank, over 118 million Nigerians don’t have an account. And the app does not have an option to add your debit card – payments are made directly to drivers in cash allowing those without account use the service.

According to Techpoint, InDriver claims to have signed up over 6,000 drivers in Nigeria but would not disclose the number of its users. It has also raised $15 million in two rounds from Leta Capital, according to Crunchbase.

With the power to negotiate fares like the traditional system of transport in the state, InDrive might just have the needed advantage to snatch a sizable chunk of Lagos’ ride-hailing market.