They ruled the entire city for decades. They got so strong and enjoyed an unchallenged monopoly across the state with a membership strength which grew into tens of thousands across the state with their parks or ‘office’ dotting every major bus stop few kilometers apart from each other. Like every incumbent in every market segment, it was not meant to go unchallenged.
This is the case of the yellow taxis in Lagos. For the average baby boomer and older millennials, these yellow taxis with two black lines were the private means of getting around for those without a personal car and loathe the publicly available buses better known as ‘danfo’ and ‘molue’.
Then came Nigeria’s new republic with the return to democratic government in 1999 and the privatization of the telecommunications sector in 2001.The good bit about the internet is; while it creates jobs, it also takes jobs or as in most cases, transfers or changes nature. The transport means in Lagos and Nigeria by extension, was not an exemption. Within the next decade after the inception of the new democratic setting, we saw attempts to use technology to move people around. Companies like Afrocab, Easytaxi, Dryv, GoMyWay and others launched with interesting value propositions and business models. GoMyWay for example, catered to the need for a carpool within the city as commuters wanted the safety and comfort of a neat ride at a reasonable price, even if it meant splitting the cost. Thus, a good market opportunity was created. Afrocab, to the best of the knowledge of this writer, was the first indigenous company in the ride-hailing segment in the early 2000s. It gave riders opportunity to ‘haggle’ their fares on the app as well. This seemed like a good proposition considering the price sensitivity of an average Nigerian consumer.
Uber and Taxify – the Estonian technology company which rebranded to Bolt – who have since remained in the market in spite of the challenges in the market. In the midst of these attempts to change the way commuters moved around using technology, coupled with a growing economy which left a lot of disposable income in the hands of riders, these ‘apps’ as they were called in the early days by the older drivers, quietly but steadily took the market share from the traditional yellow taxis. This was the case in every major city where ride-hailing businesses opened shop except in some unique cases like Ibadan where culture and quality of service have beset the full adoption of this means of moving around.
What Really Happened
For a start, ride-hailing removed the hassles of scheduling a trip with your favourite taxi driver by the corner. This could be by notifying him a few days or day before, go to the park to pick a cab or wave down a moving taxi by the roadside. This was the culture before the internet-enabled came into the scene. While the ride-hailing did not fight on price points, they leaned hard on other strong points like convenience. They set the minimum requirements for cars to operate on their platforms; age of car, neatness, completeness of documents, basic understanding of English Language for easier communication, knowledge of major routes with the city and many others. These requirements helped weed out the unqualified despite their eagerness to enlist. With these, commuters now have a decent car, with a neat interior and functioning air-conditioner, with complete vehicle documents thereby free from harassment on the road and driven by a neatly-dressed driver that’s not chatty. The traditional cabs lacked these efforts at standardization and benchmarking which helped the ride-hailing businesses replenish their pool of customers as they grew.
Unlike the traditional taxis, these platforms came with a review and reward mechanism to encourage the passengers and the drivers and punish and penalize when necessary. Like a regulator setting the rules of the game, both players on both sides of the table felt protected; a passenger could rate a trip so low for a minor reason as not following the directions on the (Google) map and the driver could do same if he is harassed, scammed, insulted or treated badly on a trip. All these were not available with the old, traditional ways.
Over time, as the market’s attention shifted, there were rumours or attempts to have these taxis on their own app. These efforts did not come to fruition as some members while registered on the ride-hailing platforms still kept their spots at the parks in a bid to gain best of both ‘worlds’. To some, it worked out especially the younger generation of drivers open to adapting to new ways of doing business.
Currently, a noticeable change at visited taxi parks is the near absence of yellow-painted taxis. Virtually all of them are now gone, replaced by older but better-looking salon cars and hatchbacks compared to the vanishing branded ones not fit for ride-hailing platforms.
Looking to the Future
Across the Atlantic, New York City taxis have found a way to stay in business side by side with the ride-hailing companies like Uber and Lyft. However, and this must be pointed out, a culture of maintenance and quality control coupled with high disposable income have all made their survival possible. This is a departure from what’s obtained in the Nigerian taxi market. The system permits anyone with a car, willing to change the colour and pay the requisite acceptance fees to get on board. This is a stark departure from their counterparts in New York with a medallion system passed on to one driver to another. This puts a cap on the permissible number of cabs in the system thereby serving as a store of value.
As time grinds forward as these drivers grey out and technology gets better and adopted, the window period to salvage a vanishing business subsegment closes. Perhaps it’s best to not try, and watch time do the rest.
