Over 2,500 ride-hailing apps, mostly locally developed ones, have attempted to compete for commuters since US-based Uber entered the Nigerian market in 2014, according to a top official of the Amalgamated Union of App-Based Transporters of Nigeria (AUATON). Rising operational costs, regulatory hurdles, and the dominance of well-funded foreign players have made it nearly impossible for local platforms to compete.
“More than 2,500 apps have attempted to enter the market since Uber arrived in 2014,” Ibrahim Ayoade, general secretary of AUATON, told TechCabal by phone. “This is based on my records from their registration attempts with us. However, many of these apps fail to sustain operations due to the competitive landscape and challenging business environment.”
Nigeria’s ride-hailing market promised to deliver convenience to commuters and a financial lifeline to many drivers. Yet, the sector remains a difficult playing field. Established foreign operators, with deep pockets and advanced technology, continue to squeeze out homegrown alternatives.
Among the casualties is Oga Taxi, Nigeria’s first indigenous ride-hailing app founded by Michael Nnamadim, launched in 2014 but shut down after struggling to scale. Easy Taxi, a Brazilian platform that entered Nigeria in 2013, ceased operations in 2017 following its acquisition by Latin America’s Cabify.
Not much has been heard from T-Cab Rides, another indigenous app launched in 2018. The ride-hailing company co-founded by Samuel Ogunwus, allowed passengers to negotiate fares with drivers, similar to Indrive. However, the company appears to have ceased operations, given the inactivity on its social media accounts since 2019.
Alpha1 Rides, an indigenous ride-hailing company founded in 2017, attempted to disrupt the Nigerian cab-hailing sector with its new ride system, including office shuttles and limousines. Just like T-Cab, its social media accounts have been inactive since 2020.
GoAfrik, a Nigerian logistics startup co-founded by Thomas Ajayi, launched Taxigo Nigeria in 2018, offering services like taxi booking, bike rides, courier delivery, and on-demand logistics. However, the platform has shown little to no activity in recent years.
According to AUATON, several ride-hailing apps have attempted to challenge Uber and Bolt in Nigeria, with most launching before the COVID-19 pandemic in 2020. These include Oga Taxi, Smart Ride, Gudride, Alpha 1, GLT, Jetride, Rideme, Tripz, Go247, T-cab, Taxigo, 9ja, Skyconnent, Phixama, Cruise, MotionPlus, Gidicab, Soole, BudgetRide, Zkyte, Easy Taxi, Afro Cab, Say Taxi, ProTaxi, Enivo, and Alakowe Taxi.
TechCabal findings show that at least 16 of these platforms—including Oga Taxi, Smart Ride, Gudride, Alpha 1, GLT, RideMe, Tripz, Go247, T-cab, Taxigo, MotionPlus, Gidicab, Soole, Easy Taxi, Afro Cab, and HerRyde—are no longer operational in Nigeria.
“Logistics is a high-risk sector,” said Ayodeji Ebo, managing director/chief business officer at Optimus by Afrinvest Limited.
Fuel prices, policy shifts, and the fight for survival
Ride-hailing platforms have become increasingly popular across Nigeria, especially in major cities like Lagos and Abuja, driven by their convenience, a large youthful population, and rising internet penetration. However, the sector faces challenges like inconsistent policies, poor road infrastructure, driver complaints, and the lack of digitized data for efficient operations.
The challenges for ride-hailing companies in Nigeria have only intensified. The removal of the country’s petrol subsidy in May 2023 caused fuel prices to surge by over 400%, dramatically increasing drivers’ operating costs. According to the National Bureau of Statistics, the road transport sector contracted by 35.9% in 2023—down from a positive growth rate of 15.1% in 2022.
AUATON estimates that since the subsidy removal, the cost of vehicle maintenance has jumped by 200%, slashing driver profits by 300%. Many drivers, already burdened by platform commissions and regulatory fees, are quitting the sector or cutting back on working hours
“The cost of car maintenance has increased significantly,” said Bolude Olumuyiwa, a Lagos-based driver. “Repairing my car’s air conditioning now costs ₦200,000 ($130), compared to less than ₦100,000 a year ago.”
Even with fare hikes, drivers complain that their take-home pay remains unsustainable, while customers, hit by rising living costs, are increasingly abandoning ride-hailing apps for cheaper public transport.
Ayoade of AUATON believes that without policy support, local ride-hailing platforms will continue to fail. “The only way these indigenous apps can succeed is through government intervention—either through favorable regulations or financial support,” he said.
LagRide, a government-backed ride-hailing service, is losing traction, with fewer drivers using the platform. CIG Motors, the Chinese automobile company that assembles and distributes GAC vehicles in Nigeria, recently took over the company’s operational management.
Meanwhile, new entrants like SimpliRide, a driver-led ride-hailing platform launched in March 2024, hope to buck the trend by offering better terms to drivers. But industry experts warn that without long-term, patient capital, many of these startups face the same fate as their predecessors.
“The payback period for this capital needs to be longer,” said Ebo of Afrinvest Limited. “Otherwise, these companies won’t survive the pressures of rapid growth and profitability demands.”
The ride-hailing industry’s future is uncertain as companies grapple with market share, profitability, and driver welfare. For now, the road to ride-hailing dominance in Nigeria remains one where only the strongest or the best-funded survive.
