Following the recent Lagos ban of tricyles and motorbikes from plying major roads and highways, prominent ride-hailing startups Gokada and Max.Ng are reacting to the development.
The Lagos State Government cited safety and security reasons for the ban, insisting that accidents caused by bikes and tricycles have risen inexplicably.
The government also lamented that these same classes of vehicles are security threats as they are being used for criminal operations. However, bike-hailing companies are pleading their innocence and absolving themselves of any such wrongdoing.
Reacting to the Lagos ban, Gokada explained that its operations have been within the standards required by the government, insisting that it has a 99.8% safety record since it started in 2017.
In another thread on Gokada’s twitter page, one of its riders could be seen lamenting the impending loss of his job and the ripple effects it could have.
According to him, his spending power will be greatly reduced as will that of other riders who may be relieved of their jobs.
Gokada’s case is quite compelling because in 2019, the startup shut down its operations from August 14 to August 26 just to address key operational issues.
The startup then launched Gokada 2.0 which aimed at training its pilots in customer service, hygiene, safe driving and Google Map assisted navigation.
Upon its relaunch, new bikes and helmets were issued its riders to ensure safety. Thus, its claim to almost 100% safety record could be a statistic worth considering as the Lagos ban looks to swing into full force by February 1.
Max.Ng advocates regulation, not ban
Max.Ng said it would do all that was legally possible to seek a regularization in place of an outright ban.
The CEO of Metro Africa Xpress (MAX) stated that the bikes used for its operations all complied with safety regulations put in place by the government. He also decried the effects the Lagos ban will have on drivers and investors alike,
The CEO went on to reveal that since it began operations, it had provided 2,200 direct jobs for its drivers and full-time staffs, as well as 73,000 indirect jobs.
“We have demonstrated our ability to elevate the average monthly income of a rider on our platform to more than three times what their peers in the informal sector earn, with the additional benefit of ownership of premium quality vehicles within 12 months, and a further 40% increase in their earnings once they take full possession vehicles,”Adetayo Bamiduro, Co-Founder and CEO of Metro Africa Xpress (Max)
To be fair, bike-hailing startups, under the umbrella of Transport Hailing Alliance of Nigeria (THAN), have largely complied to with transport laws and regulations in Lagos. According to Gokada’s Pilot Operations Manager, Victor Daminabo, their bikes are 200cc and above and have both rider and passenger helmets.
They have also stuck to carrying one passenger at a time and all have comprehensive insurance covering their passengers.
Government ban may send investors running
In 2019, Nigerian startups attracted the highest number of investments in the African tech and digital space. Bike-hailing startups are not exempt from this investment invasion as a startup like Opay received heavy funding via its parent company, Opay.
With the Lagos ban, the prospect of dealing with huge losses looms large for investors. While the bike-hailing business had looked viable especially in Lagos with its huge transport needs, right now it is looking like an unimaginable dead end for investors.
Affected startups are already contemplating their prospective losses, as the ban would greatly affect investors’ returns. While this is true, the ban may also have more far-reaching effects for Nigeria than the immediate returns for investors.
Investors may start getting uneasy about putting money in Nigeria-focused startups simply because of how very easy it is for a good investment to suddenly turn bad. And all because of the abruptness of government policies and regulations.
Is stronger regulation the perfect middle ground?
Safety and security are rights of citizens which every government must guarantee. However, ride-hailing startups have a compelling case for the safety concerns. And it isn’t clear if any of them have been involved in criminal activities to make them fall short of the security concerns.
However, what if the concerns of the Government may be addressed in other measures that do not necessitate an outright ban? The bike-hailing startups themselves have called for tighter regulation and standardization of operations in the state.
Digital trackers are also options that can be explored to make sure that bike-hailing companies can account for the movement and activity of every of their registered riders. This can be a measure to forestall activities leading to insecurity by riders in the state.
The Lagos State government seems resolute in proscribing the activities of bike and tricycles in the country and as far as they can see, bike-hailing startups belong in that class.
The Lagos State commissioner of transport, Dr. Frederick Olaseinde didn’t mince words when he said quite recently: “Let me make it clear, motorcycles and tricycles are not part of the Lagos masterplan. They came in because there is a gap, but they don’t have a place in a mega-city.”
With such a declaration, the future seems very bleak for bike-hailing startups. And as the days go by leading to the implementation of the ban, there seems to be no way back.
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