Innoson Motors to Launch Ride-hailing Service with Hire-Purchase Model in Enugu

…as disgruntled e-hailing drivers in Enugu demand lower commission charges

Innoson Vehicle Manufacturing (IVM), Nigeria’s indigenous auto manufacturer, has disclosed plans to launch its custom ride-hailing service, IVM Connect in Enugu, Nigeria.

IVM Connect will join Uber, Bolt, Oma and RideOn as one of the ride-hailing service providers in Enugu. Bolt began operations in the state in December last year.

According to IVM’s Head of Corporate Communications, Cornel Osigwe, 200 IVM vehicles from its Nnewi manufacturing plant in Anambra state are ready to be rolled out when IVM Connect launches in early October. Innoson Vehicles also revealed plans to expand to other states in Eastern Nigeria including Owerri by adding 4,800 vehicles to its existing fleet within one year of launching IVM Connect.

The company has advertised vacancies for interested drivers to apply in preparation for its IVM Connect launch.

Like Uber and Bolt, IVM Connect will operate through a ride-hailing app, IVMCruise which is being developed by the company.

IVM Connect Will Run A Hire Purchase Model

IVM plans to employ a hire purchase model where drivers have to pay for the vehicle they are given within two years. Unlike IVM Connect, Uber and Bolt do not give their driver-partners vehicles as drivers are required to bring their own vehicles.

IVM G5 Model

In essence, IVM will lease its branded vehicles to drivers who will offer e-hailing services in Enugu through its IVMCruise app.

IVM Connect drivers will have to make electronic payments for the vehicle in instalments within the stipulated 2-year period. Upon completing the payment, vehicle ownership will be transferred to the drivers.

Popular ride-hailing platforms in Enugu, Uber and Bolt run a contrasting model. Car owners who want to drive for the companies enter into a driver-partnership where they remit a trip fare usually on a weekly basis. The trip fare is estimated based on the distance covered and trip duration.

Oma and RideOn are two other frequently used ride-hailing services in Enugu which operate a similar business model to Uber and Bolt. Neither company offers a rent-to-own option for drivers.

Frustrating Challenges for Drivers in Nigeria’s Ride-hailing Space

Driver-partners working with e-hailing companies such as Bolt and Uber usually bear the brunt of any unfavourable decision taken by the companies or harsh regulations implemented by the government.

According to a document obtained by Technext, Bolt drivers in Enugu recently bemoaned poor working conditions such as terrible road networks, high cost of vehicle maintenance and undue interference by law enforcement authorities in the state.

“Added to this now is Bolt’s deliberate and conscious disbursement of close to zero charges and ride promos at the expense of driver-partners’ pains and sweat, coupled with the back-breaking percentage commission charge of 15% levied on driver-partners’ gross income,” e-hailing drivers in Enugu complained.

Innoson Motors to Launch Ride-hailing Service IVM Connect with Hire-Purchase Model in Enugu

The drivers made their dissatisfaction known through the National Union of Professional App-Based Workers (NUPABW). In a letter to Bolt’s West Africa Regional Manager, Uche Okafor, the Enugu bolt drivers demanded that the company upwardly reviews its low fare charges for trips. The drivers suggested an increase in base price to N320, per kilometre price to N72 and per minute price to N14.

Another instance which reveals the inhibiting factors facing Nigeria’s e-hailing drivers is the Lagos state government’s 10% tax regulation on e-hailing services including Uber and Bolt in the state.

e-Hailing Drivers to Boycott Uber and Bolt Apps in Protest Against Lagos  Regulation
Bolt/Uber drivers protest against Lagos regulation

Just recently, Uber/Bolt drivers embarked on a week-long boycott of the ride-sharing apps to express their grievances at the new Lagos state regulation.

Suggested read: e-Hailing Drivers Union Begin Week-long Boycott of Uber and Bolt Apps in Protest Against New Lagos Regulation

As of now, Bolt is yet to officially respond to the Enugu drivers’ demands. It is important to stress that driver-partners are indispensable when it comes to ride-hailing in Nigeria, or anywhere else for that matter. If there are no drivers available, the purpose of e-hailing apps is defeated.

As Innoson Vehicles makes plans to launch IVM Connect in Enugu, prospective driver-partners will be looking forward to a more supportive business clime. With a rent-to-own option, hopefully, the new ride-hailing service would address some of the issues raised by the drivers.

Technext Newsletter

Get the best of Africa’s daily tech to your inbox – first thing every morning.
Join the community now!

Register for Technext Coinference 2023, the Largest blockchain and DeFi Gathering in Africa.

Technext Newsletter

Get the best of Africa’s daily tech to your inbox – first thing every morning.
Join the community now!