Nigeria’s ride-hailing sector has witnessed an influx of over 2,500 app-based transport services since Uber entered the market in 2014. However, most of these platforms have failed to gain interest, primarily due to rising operational costs, stringent regulations, and competition from well-funded international players.
According to the Amalgamated Union of App-Based Transporters of Nigeria (AUATON), numerous locally developed ride-hailing apps have attempted to establish themselves, only to collapse under market pressure. “More than 2,500 apps have tried to enter the industry since Uber arrived in 2014, however, many of these platforms struggled to sustain operations due to fierce competition and a challenging business environment,” said Ibrahim Ayoade, General Secretary of AUATON.
Despite the promise of providing convenience for commuters and economic opportunities for drivers, local ride-hailing apps have struggled to compete with established global brands. Companies like Uber and Bolt have leveraged their extensive financial resources, cutting-edge technology, and brand recognition to dominate the market.
Several indigenous ride-hailing startups have launched with ambitious goals but ultimately ceased operations. Notable examples include:
Oga Taxi: Nigeria’s first homegrown ride-hailing app, launched in 2014 but struggled to scale and eventually shut down.
Easy Taxi: a Brazilian firm that entered Nigeria in 2013, discontinued its services in 2017 after being acquired by Latin America’s Cabify.
T-Cab Rides: launched in 2018 by Samuel Ogunwus, allowed fare negotiations similar to Indrive but has remained inactive since 2019.
Alpha1 Rides: founded in 2017, attempted to revolutionize the industry with services like office shuttles and limousine rides but disappeared by 2020.
Taxigo Nigeria: a venture by GoAfrik, launched in 2018, offering diverse transport and logistics services but has since faded from relevance.
Reports indicate that at least 16 ride-hailing startups, including Gudride, Jetride, Rideme, Tripz, Go247, Afro Cab, and Say Taxi, have all exited the Nigerian market.
The ride-hailing industry in Nigeria has faced increasing difficulties due to economic instability and unfavorable government policies. The removal of fuel subsidies in May 2023 led to a staggering 400% increase in fuel prices, significantly driving up operational costs for drivers. According to AUATON, vehicle maintenance expenses have risen by 200%, while driver earnings have plummeted by 300%.
A Lagos-based driver expressed frustration over rising costs: “Repairing my car’s air conditioning now costs ₦200,000 ($130), compared to less than ₦100,000 a year ago.”
Despite fare increases, many drivers still struggle to make ends meet, while passengers, grappling with inflation, increasingly opt for cheaper transportation alternatives.
Ayoade of AUATON believes that without substantial policy support, local ride-hailing startups will continue to struggle. “The only way these indigenous apps can succeed is through government intervention—either through favorable regulations or financial backing,” he said.
Government-backed initiatives such as LagRide have also faced setbacks. Managed by CIG Motors, the Chinese firm that assembles and distributes GAC vehicles in Nigeria, LagRide has seen diminishing driver participation.
However, new entrants like SimpliRide, a driver-focused platform launched in March 2024, hope to change the industry’s narrative by offering better terms for drivers. Still, analysts caution that long-term financial sustainability remains a major challenge for startups.
Ayodeji Ebo, Managing Director at Optimus by Afrinvest Limited, emphasized the need for patient capital. “The payback period for this capital needs to be longer. Otherwise, these companies won’t survive the pressures of rapid growth and profitability demands.”
The Nigerian ride-hailing sector continues to evolve, but for now, only the strongest—or the best-funded—players can withstand the economic and regulatory challenges. Without significant financial backing or strategic government support, local platforms may continue to disappear, leaving the market in the hands of dominant global operators.
