“Everybody has a plan until they get punched in the mouth.” This simple saying by Mike Tyson best describes the shock that the ride-hailing sector received when the Lagos State Government decided to take them off the roads with one piece of legislation early in 2020.
What rapidly followed was a demystification of the concept of ride-hailing and the companies that seem to be prospering, massive loss of jobs and a significant dent on the investment-worthy state of Lagos.
I doubted if any bike hailing platform would have succeeded outside of Lagos and my curiosity brought me to SafeBoda Nigeria and the cool impact they are making in Ibadan. I spoke to Babajide about a myriad of issues in that space and his contributions were revealing and very significant.
Below is an excerpt of our conversation. Please feel free to make your conclusions and share your thoughts. Enjoy!
Q: So tell us a bit about yourself beyond what we already know…
For me, it is more about your purpose: why you are doing what you do. And once you’re able to figure out the purpose, you can build a career around it. For me, the purpose is to constantly make an impact, especially in Africa.
Brief background, I am an engineer. I studied computer engineering at the university. Then, I moved into HR consulting and strategy with Phillips consulting at that time.
I spent about 4 years and left to work at the bank. I worked as an HR in the bank. I did one year at special projects and then moved to talent acquisition.
Then the opportunity at Andela came. I remember when I was leaving, we had a conversation and they reminded me that when I was to be hired they told me “give us some time to figure out what the role is” and I told them no. Hire me and I will come in and figure out what the role should look like.
I typically do not operate with a career path. Some HR people might not like it because it defies the traditional practise that everyone must be a specialist of the sort but it is what it is.
For me, what I want to do is to help African founders or African companies scale.
As we speak, I still don’t want to build my own thing. I don’t have dreams of doing that. I cannot say what might happen in the next 5 years. Right now, I feel like I enjoy helping people who are already building things to move the needle, become stronger, understand market dynamics and things like that.
So that is what drives me for now.
Q: After all the good time, why did you leave Andela to join SafeBoda?
Then at Andela, we were changing the World and distributing opportunity. Let’s forget about what is happening now at Andela and let us think about all the people whose stories became changed. There were many inspiring stories from Andela at the inception.
At a point, I realized that as the talent pool was scaling the local startup ecosystem was not scaling. Many businesses that will be perceived as International cannot be said to be at par with their foreign counterparts. Everything has to balance and that was like the tipping point for me to move from the talent side to the business side.
So I had two options:
One was to leave and build an idea that I had, with a couple of other people. The other was to try and get a job. Like I said, I had never been in that headspace of building, finding and starting up my own thing.
So what I just did was the next best thing which was to find a job where I had the ability to control what happens and be the key decision-maker.
Then I had 3 options but SafeBoda was the only one that gave me the kind of opportunity I wanted.
Q: With the competitor landscape, why did Safeboda choose to come to Nigeria?
One, the prospect was there. The number of people who use Okada in Nigeria was huge. If you go to almost every city, there is a heavy Okada base for long and average distance trips.
Those are some of the ingredients you need to build a successful ride-hailing business.
Q: It took a bit of time between the announcement and the actual launch. Why did SafeBoda take a while to actually launch?
The first 8 months of my job was more or less like what you will have an expansion person do. I was hired as the Country head. But what my role looked like for those 8 months was less. We had no entity.
So, we had to set up the business entity and do things like business registration, acquire operating licenses, opening a bank account, checking out an office space and pretty much every other thing. I basically built from scratch.
I remember that when we incurred cost, we keep the receipt and at the end of the month, we retire and then get paid back the amount spent because there was no entity.
And so after building from the ground up, we needed to figure out the market entry strategy. This was before we began hiring. Initially, we started from working out of my living room and later we moved to spaces like SoFresh in Yaba or Café Neo.
We were then building the go-to-market strategy and also talking to the Okada guys to understand their pain points. It was at this point that the incumbent Governor of Lagos, Mr Sanwoolu got elected.
Few months after he came in, we decided to understand how Lagos was positioning under the new administartion. We actively engaged them just to get a feel of the mindset of the new people in the room. When we realised this was going to end badly, we were caught up in a decision point: should we pull out of Nigeria?
That was like a very honest conversation I had to have with the higher-ups. One option is to say, you know what we made a mistake. We’re putting our plans for Nigeria on hold and then we’ll figure out the next steps. And then it won’t necessarily hurt anything at that point.
But that would mean I would also be out of a job and back into the job market.
But at the end of the day, we needed to have that conversation and commitment to be able to build anything solid and anything popular in Nigeria. Those were the conversations we were having.
Getting to Ibadan
While we’re still trying to figure out and make the decision on whether we will leave Lagos and go into other things, between myself and the VP of expansion, we decided to check some secondary cities.
He was particular about Otta, Ogun state because of the proximity to Lagos. The idea was to startup from there and somewhat spread into Lagos. I was a bit particular about Ibadan because I spent some time up here growing up as a kid.
So, we went to check both locations out. Otta looked good, everything was right: proximity to Lagos, earning power, consumer appetite for Okada use etc.
We looked at Ibadan, it was the same thing as well. What was different between Ibadan and Otta was in Ibadan, the money was being made in Ibadan and spent in Ibadan. This helped form our decision.
We began extensive research in Ibadan. I had to get on the ground and take okada rides in Ibadan, myself and the VP of expansion. He is the Oyinbo man that almost all the Okada men in Ibadan know. We were taking rides, talking to the riders, knowing their pain-points, building a list of drivers for about 2 months.
Meanwhile, we were studying what our competitor was doing in the market and figuring out what our best strategy will be.
So when we are done, we created the plan, strategy design and every other thing that was needed. The next task was to hire the team. We recruited for different roles, onboarded the guys and have them come up with their own mini-plans based on the overall strategy.
Q: Has Ibadan met your expectations so far?
Ibadan has surpassed our expectation. it’s been a very great market. It has been a very great City. Now, we are a bit further down the road map of what Ibadan was supposed to be. We have kind of surpassed the expectation we set for ourselves here.
For adoption, people often mistake the kind of population mix of the people here. Ibadan has the highest number of academic papers in West Africa. We have a good population of sophisticated people in Ibadan.
If you speak to the drivers, you will be surprised by their level of exposure and how they are able to engage the platform. Of course, there have been niggling challenges.
Q: Share with me some of the challenges your team has faced in Ibadan and what did you do differently?
So some of the challenges that we initially had was getting the driver to believe in the system.
Prior to our arrival, an existing competitor had a history of mistrust. Drivers had angrily left the platform. If you followed the story then, you will realise there was a sharp rise and a quick decline of adoption.
So, it was difficult going back to the same drivers to onboard them to the platform. We had to go back to have conversations, gain back trust and resolve issues like a community.
We told them: “hey, there are going to have issues, but we need to sit down and resolve it like a community”.
Q: Has the Oyo State Government provided the needed support in terms of state regulations?
Interestingly, the Oyo State Government has been very supportive. They were clear that we are free to play in that space. And, that they will come in with regulations whenever they are ready and it won’t be in the manner of Lagos.
We have been actively engaging the government since.
But then it’s still what it is in Nigeria where the head wants to do something right, but it is another thing to get the body to move. True, we have some pockets of rent-seeking.
For example, the government said that park managers should collect ticket revenue from Monday to Friday only. But because the managers want to make their revenue quota, they tried pushing for Saturday as well. So, the government has said one thing, the people are doing something else.
I think it’s just a representative of how Nigeria is designed: where people keep creating bottlenecks in the process so as to make a personal profit.
Q: How did you deal with the competition? You were not the first mover…
The first thing is we have 6 years of experience though it might not necessarily be in Nigeria. Some of the issues that competitors have had, we have had them in our previous Markets. We have figured out how to deal with those issues and we have figured out how to jump that curve.
To be honest, I don’t necessarily see us as competition like people put us in that space and say “oh you guys are competing”. I say that every time you go out on the road, you see about 80% more other bikes (okada riders) than SafeBoda, Oride combined.
In Ibadan, we have about 80,000 active bikes in this sector and we are not up to 10% of that population combined. Together, we are not even sufficient to serve customers. Those guys are the actual competition.
We ought to be talking about how we will moderate prices and help the average riders migrate from the mindset of calculating earnings per trip to earnings per day. More like flipping the market on its head and you earn more at the end of the day though the rides are cheaper.
So, those are some of the things we did with driver education.
It is not by splashing the cash to entice them. You promise them tripled earnings when that is not possible. What will happen is that you create a false expectation and increase the drivers’ appetite then you begin to claw back bonuses and make the drivers disgruntled.
The other thing is working around driver utilization. Because if you think about how people move, you see a trend of many people moving in the morning and evenings. So drivers are under-utilized during the day.
Here, we introduced other verticals that will help. Because what matters is what the driver earns at the end of the day. So the rider is carrying passengers in the morning. In the afternoon, he is delivering food for the office as well as courier/logistic services. So by the time he works for about 8-10 hours (our average is 9 hours), you will see a consistent engagement.
Q: Ibadan is not Lagos, How were you able to get quality talents in a city like Ibadan?
You will be amazed by how much talent you have out of Lagos. For me, I will start to advocate that more tech companies look outside Lagos. For instance, I don’t see why any of the wealth startups should be having their core operations in Lagos.
Because if you pay someone 400,000 in Lagos, he is struggling. Pay someone 400,000 anywhere outside of Portharcourt and Abuja and they are living a very decent life.
It was easy to get the most senior guys to move to Ibadan because it is an easier way of life. The head of marketing had always lived in Ibadan so it was easier. About 70% of the team is from Ibadan. The University of Ibadan (UI) is one of the best institutions in the country.
Q: Regulation issues: Kampala is proposing that all Boda Bodas adopt the ride-hailing model. In Lagos, the reverse is the case as the state has banned ride-hailing platforms. What is your take?
So I think it is a fundamental cultural problem with us. We have a colonialist mindset in that you always want to copy what the first world countries are doing in a third world country with third world problems.
Why is it that Okada companies exist in the first place?
There are no okada companies in the US, the UK or Canada. These guys are about 200 years at this and miles ahead in terms of infrastructure. Why try to build your cities like theirs now?
If you want to model after any other clime, it should be Southeast Asia. We are trying to model against the US and UK without having the infrastructure that the US and UK have.
Ride-hailing would have helped with COVID-19
This would have been the best time for us to leverage bike hailing platforms in Lagos because of COVID-19. Because now, BRT buses are so expensive. I saw in the news where someone was complaining that they paid #500 for a #300 trip and the bus was still packed full.
With an Okada, it is a one-on-one service, just you and the driver. Even if you decide that buses should do half or 60% capacity. It means for a danfo of 14 seats, 7 people are at risk each time.
But with the bike, the driver will be masked up. You guys don’t even need to talk to each other than get on the app, he shows you he has started the trip and ends the trip and you pay through a wallet system.
As we speak, we do not have a functional train system, the BRT system is not sufficient. Yet, we are imposing a ban on the alternative.
Okada is not Okada
In reality, members of the political class making these laws do not share the same reality with the masses. When was the last time they got on a bus or Okada or even a tricycle? So, when they banned okada, people started walking. And they are still walking up till now.
I think the best way they could have done was to figure out how to regulate the sector. Speak to the parties involved and create a regulatory framework around it to make it all work.
Ask the players, what are your accident records like? Like no one asked those question. They used a blanket cover and banned everything. And, we saw conversations like “Okada is okada, whether Gokada or Maxgo, whether the fancy or normal Okada”.
But that is not true. Okada is not Okada. Because, these guys have invested a lot in buying those motorcycles, training of the personnel, buying those certified helmets an so on.
They are not the same thing. It is like saying Honda and Rolls Royce are the same.
Q: Do you see ride-hailing app playing a role in the future of Africa?
So, I do not believe that Africa will change. We do not have the infrastructure. The work from home experience during this lockdown was terrible. Why? Internet! Which is the one thing you need in order to be able to function properly.
We will probably learn to live with some changes but I don’t think things will change radically like that.
Most of the comments on Twitter ismade by people who are far from the actual realities on the ground. Many people don’t have the infrastructure to take their businesses online. In fact, the cost of taking your business online is huge.
While your business is small, the cost might be small, but when you begin to get big, you will realise the cost is huge.
I think there will always be a big space for ride-hailing because people will always move. If ever all the businesses go online, it means ride-hailing businesses will transform to become logistics businesses. So, there will always be opportunities.
Q: What are the future plans from your team?
To continue to grow and to continue to improve the quality of life of our drivers. Because that is key.
Many people think that we have one customer but we kind of have 2 customers. The primary customer is the rider. The secondary customer is the customer whom the rider interfaces with.
So, for us, when you have improved the quality of life of the rider then it gets to a point where they become a strong army who have the ability to do multiple things. Then, there is also dignity in such labours.
That is why we are very strong in terms of branding. If you find our drivers, they are constantly on their helmet because they are brand-new, imported with the bright orange colour.
In fact, many of the riders have come up with a unique style of wearing a black shade under their helmet. We are beginning to see them change from the regular sandals they usually wear to wearing black boots. These show a change in orientation.
On the broad plans, we are not deviating from our parent brand in Uganda. This means that vertical services will come into play, at some point. We will have shops, foods and other options on the apps as well.
Q: Are you planning to expand to other cities in Nigeria?
We are still thinking about it. But there are no concrete arrangements yet. What we want to be able to do right now is deepen our reach in Oyo.
Q: Thank you, Babjide, for your time.
You are welcome.
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