Uber Lagos just made life harder for the competition

1

We saw this coming. Now it’s happened. They cut prices by 20 percent. This just came in the mail.

http://blog.uber.com/lagos-uberx-pricecut

Remember the last time you travelled in a 2008 AC saloon car for ₦90/km? You wouldn’t. It never happened until today. From 8pm on Monday 4th May, we’re slashing uberX prices by 20% - that will make owning a car in Lagos almost unnecessary. How do the new prices stack up?

I don’t know that Uber can disrupt cars in Lagos. Nigerians love their cars. And the pricing is still, er well, pricey for the average Lagos commuter. So there. It’s the other e-hailing guys like newly minted boss of Afro, @aniediudo that have their work cut out for them.

1 Like
2

Uber IS moving. Uber is disrupting.

3

But how does this work out for the Uber drivers who finally had a chance to make more money than they ever could as regular taxi drivers?

2 Likes
4

Speaking from the perspective of a car owner, forget car love. I hate Lagos traffic, and would happily never drive in it again. BUT! I drive a Yaris, so maybe I just lucked out on a fuel-efficient car. A full tank at N4000 will drive me to and from the island for 2 weeks. With AC. Uber has never been a viable option for someone like me.

Perhaps Uber is more geared towards Islanders with higher incomes and patience. Other than the first two times I used it (of which I used it from Yaba, not my house), when my car was getting fixed, finding a cab from my location has been tedious. There’s almost never one available. They’re all on the island or coming from the island. It was cheaper and faster to just stroll out my gate and find a passing taxi. I mean, just looking at that chart (Airport to the Island) you can see who their ideal demo is (and yes I know you’re paying for the ~comfort~ and convenience). I just don’t see them ‘disrupting’ (ugh, this word) cars in Lagos.

More power to them though, at least they’re actually trying to have cheaper fares.

4 Likes
5

I just don’t like the sound of the word—‘disruption’. What does it even mean?

6

@onyeka has this very wonderful gift of putting everything in perspective. :thumbsup:

4 Likes
7

Yes, “disrupt” is a new, and widely popular word used by industry insiders, and those aspiring to be industry insiders - it often means a lot less than it sounds.

It has some value when used in thought-provoking discussion, i.e., a disruptive technology is one that by its very definition disrupts … technology. Disruption, changing the established way of doing business, unseating incumbent market leaders, et al; but not at all because a new company raises investment, or has the best branding, or is executed and designed with an excellent team, but because the inherent technology underlying things itself is groundbreaking, and destroys a previous way of doing things.

Very things things in this world have been technologically disruptive, you could probably list them.

Consider travel sites, they disrupted travel agencies, Internet disrupted pre-print solutions; consider Google maps, and Yellow Pages. And sadly, more often than not, what wins in business is what is best funded and also best executed, [note that I didn’t say most funded/executed] - and this rarely is found to be the best technology. See the entirety of the biotech industry.

A lot of companies are best only at incremental improvement. Small valuations that increase over time given continued, and consistent value, creating a smaller margin for a completely changed market dynamic.

Nothing is being disrupted at present.

2 Likes
8

Not everything. Maintaining a car is not only about buying fuel. Why don’t we look at an industry that is as old as ever… Hotels. Why do you pay N5,000 to N10,000 on average 3-star hotel per night, to up to N50,000 - N100,000 per night, when you can get a decent apartment anywhere in Lagos for N400,000 - N800,000 per annum (365 days).

Uber (and the sharing economy as a whole) challenges the premise of ownership. Did @onyeka consider that before she drives the car she drives, she actually bought it. Then there’s everything from car wash liquid (read Omo), to engine oil, brake fluid, brake pads, brake discs, fraudulent mechanics, fake spare parts, parking space at home and everywhere else you go, you have to drive or pay a driver to drive you, risk of getting involved in a minor/major accident and the time and money wasted in resolving the issue, risk of car being stolen, wear and tear of tyres, paint on the car, licensing, … should I go on?

If you really feel she has put “everything” into perspective, I can tell you from the experience of driving a Honda “hala” 18 years ago in the University, to owning a Toyota “Big for Nothing” today, that what I have listed in the above paragraph is NOT up to 20% of the engagement involved with driving yourself!

2 Likes
9

??? I can’t tell if you’re arguing my point or agreeing with it, because this is a weird comparison. Do you live in a hotel 365 days a year? Does anyone live in a hotel? I’m going to say no. That’s the living equivalent of using Uber for all your trips.

Wow, for real?

I mean, I don’t know about you, but my own car just showed up out of the blue one day and has pretty much maintained itself since then. How could I possibly know what I’m talking about though, I’ve been driving for just eight years as opposed to your wise eighteen.

Here’s a quick piece of math for you. I worked on the Island for just over 4 years. Say, an average trip to or from the island is N3000 at LEAST with some random taxi app. That’s N6000 a day x 265 days a year x 4. That’s N6.4m for 4 years of daily transit. That’s just getting to work. Not considering weekend journeys or journeys with longer routes. That’s more money than I’ve spent on my humble, second-hand car in my 7 years of owning it. Not to mention none of those things you mentioned require fixing often (fun fact, I’ve never needed to add brake fluid to my car, and just changed my brake pads for the first time in years some months ago).

The truth is, if you can’t afford to buy a car that doesn’t need almost weekly repairs, chances are you can’t afford to chuck said car and take an expensive cab service everywhere you go either.

No need to exaggerate to prove your point. It’s either that or you need to buy better cars, man. I needed to go out yesterday and my AC was being repaired (here’s another fun math fact: the repair cost less than the outgoing trip by cheap yellow taxi that I ended up needing to take).

Oh… wait, hold on, I see you work for that Afro cab company. Well, then that explains your whole doomsday response.

5 Likes
10

Hello @onyeka. Chill O! We aren’t “fighting”.

Yes I do work for Afro (or 'that Afro cab company). I would as politely as possible step through your response without necessarily re-quoting your quotes of my initial comments but I will just go through them sort of from the top to the bottom.

Let me put this out there, that I honestly would love to have a sit-down with you, lunch (or Nkwobi & some Orijin). So feel free to hit me up @aniediudo on Twitter, Gmail/Google, Facebook, Skype or LinkedIn.

As a primer to this discussion, please (and I say please without any spite) read this article/blog post:

http://www.forbes.com/sites/jonathansalembaskin/2014/06/11/uber-challenges-the-premise-of-ownership/

Now back to your reply from top to bottom.

The hotel comparison is not so much about whether Onyeka, Aniedi or Michael can afford it, but do we need it. If I find myself in Owerri for a 2-week or even 2-month (60 days) gig/project, would it make sense to spend N5,000 X 60 days (N300,000; 2 months) on hotel accommodation or to rent a place for N300,000 for a year.

So I can get or own (premise of ownership) a flat (that comes with no furniture, utilities, domestic services etc.) for 12 months or rent a hotel room for 2 months for the same amount of money. Which would you advise me to do to “maximize value for my money?”

In addition, besides maybe airtime, there are very few products/services that are targeted at everybody. That Uber/Afro is not targeted at you is not because you can not afford it, but as a car owner commuting in the town you reside you may/do not ‘need’ Uber/Afro constantly. You may want or even need it occasionally, but you don’t need it constantly. Uber/Afro is not targeting you as a constant repeat customer when you are in Lagos. When you are in Abuja or Port Harcourt for a few days, that is when you could be a target customer, unless you drive your car to Abuja or Port Harcourt, or buy a new/used car when you get there. Much the same way when I am in Lagos or Uyo, Hotels.ng/Jovago or any brick and mortar guest house is almost useless to me, but when I’m in Benin, Kaduna or Abuja, “na me dey find them”. But that you are not their (our) target market does not mean they (we) shouldn’t be in business.

And some people do literally live in hotels - hopping from town to town, city to city.

Seriously, you need to factor in the upfront cost of buying your car into the cost of moving from place to place. Seriously.

I concede (#GEJ), maybe I did exaggerate a bit with my “NOT up to 20% of the engagement” statement.

You are spot on with your calculation of N6.4m for 4 years of daily transit. Considering that many of us spend about a quarter of that (N1,500/day; N1.6m for 4 years) on fast food (Tastee, KFC, Tantalizers, Mama Cass), shouldn’t we all just be cooking at home? As a matter of fact, I fear my folks would be constantly turning in their graves every time I pay “just” N700/750 for “value pack” talk less of those N2000 - N4500 meals at Jevnik or Yellow Chilli.

In addition, and this is from an entrepreneurial perspective, for companies like Uber, Airbnb and other players in the sharing economy to be achieving hyper-growth, there is something they are doing so right, that we as techies need to critically look at. You only grow so large, or become so successful, when you solve a problem, fill a need, and/or provide value for a large target/addressable market.

Beyond complex APIs, design patterns and cutting-edge frameworks, that is what makes successful software entrepreneurs billionaires - value at scale. There is a lesson to be learned from these companies. This is one class I don’t intend to skip.

I’m in Unilag (and maybe CcHUB) all through Saturday (http://www.techcityng.com/save-the-date-youth-tech-summit-is-coming-to-lagos/). I would really love to meet with you.

P.S: My Toyota “Big for Nothing” (2006 Camry) in the 1 year I have owned it, has only needed a new battery, 3 changes of engine oil (“servicing”) and a new rear bumper (that I take responsibility for “bashing”).

3 Likes
11

@aniediudo I’m not fighting with you either, but your comment bordered on condescending. You’ve now admitted yourself you exaggerated some of your points to prove that Uber or whatever would challenge car ownership, and you’re doing this with false equivalencies. There’s also the issue with us here acting like our environment is anyway similar to the UK/US.

I don’t have an issue with hiring a cab in a place you don’t live/commute in, that was never my point. Such is the case with hotels. If I’m going to PH for a week or two and I have no one there, the obvious choice would be to book a hotel room, the same way I would hire cabs to get around.

Owning a car, IMO, is like owning a house. It’s just more convenient in the long run. The same way me owning a house means I can do whatever I want with it and some temperamental landlord won’t throw me out without warning. For me, Uber or any taxi really, will never replace owning a car. Like I mentioned above, on many occasions I’ve tried to get a cab and couldn’t find one near me, or at all. With my car, I could just get in and go. Renting only makes sense for temporary situations.

In addition, besides maybe airtime, there are very few products/services that are targeted at everybody.

E-hailing taxi services are targeted at an even smaller niche than car producers. I couldn’t afford a new car, so I saved and got a fairly used car. That pays me more on the long run than getting a taxi to and fro everyday and this is why at this point in time, I don’t think they will ~disrupt~ the idea of car ownership at least here in Nigeria. It’s still a luxury. I don’t need it. There are cheaper, more sensible alternatives. Do what you need to do, but especially here in Nigeria, let’s not pretend that anything more than a small percentage are going to be using these services on the regular.

Considering that many of us spend about a quarter of that (N1,500/day; N1.6m for 4 years) on fast food (Tastee, KFC, Tantalizers, Mama Cass), shouldn’t we all just be cooking at home?

And yet, no one has talked about fast food places ~disrupting~ home cooking. I honestly think many startups today overstate their importance.

And you linked me to an article that is not convincing. Even the commenters don’t buy it. See this comment, which is true:

The idea that “Uber challenges the premise of ownership” is nothing but hype. If Uber is good at one thing, it is confusing gullible people with spin. Uber is a taxi company — so what you really mean is “taxis challenge the premise of ownership.” But taxis have been around for over a hundred years. It seems a bit late for them suddenly to be “challenging the premise of ownership.”

5 Likes
12

Fun TL;DR

  1. @lordbanks makes a passing reference to Uber disrupting cars in Lagos while acknowledging Nigerians love their cars.
  2. @onyeka points out that it will be next to impossible today as driving your own car is far cheaper than hailing Uber, and more efficient too as chances are your cab will be coming from the island to pick you.
  3. @aniediudo makes a point that there is more to owning a car than just buying fuel, somewhat appearing to make an argument for ditching your car altogether and going full Uber.
  4. Bewildered, @onyeka points out exaggerations @aniediudo made, picked on a vague comparison to hotels by @aniediudo that seemed to make her point, and also treated us to a Phoebe meme from Friends (the TV series). We also find out again @aniediudo works with Afro, just in case we didn’t catch that from @lordbanks’ post.
  5. @aniediudo does an about turn, first making an irrelevant lunch proposition, and then going all straw man on @onyeka and the rest of us, hoping we will conveniently forget the statement @lordbanks made which @onyeka was directly responding to. Also we find out he really wants to meet her. Hmm.
  6. @onyeka, refusing to lose focus of the point she was making in her original comment, ends the conversation with words of wisdom from a random commenter on the Internet.
13 Likes
13

@xolubi, and you carefully omitted the entrepreneurial advice that Uber and Airbnb are doing something right we all should take a cue from in scaling our startups and technology ventures to profitability.

If it is all about winning an argument, then I am surely in the wrong place.

And I still don’t see how offering to have lunch with a new friend is irrelevant. Neither was my hotels comparison vague in my opinion. And yes, I would love to meet her, why not?

Nonetheless, thanks for a very interesting discourse. This is why I come to TechCabal.

When it comes to leading Afro and rebuilding a new team, product and service, you have no idea how much work I have to do. I have much respect for everyone here that’s why I am responding :wink:

Ultimately, the success or otherwise of Afro as a business and a great place to work is all that matters. And if we fail, the team in Nigeria I lead will do so fast, and try to recover and tweak/pivot even faster.

On this thread, I’m out.

1 Like
14

Lool! Nice analysis @xolubi. I understand why he wants to meet her though. @onyeka has a way of saying things that make sense every time.

1 Like
15

Aw, that’s so kind of you to say! Thank you :blush:

2 Likes
16

The heart is for the gif. @onyeka wins Radar today! :joy: :joy: :joy: :joy: :joy: :joy: :joy:

17

Very apt and concise reply. It is better to own something than to rent it. That’s why we all aspire to build and own our own houses instead of living in rented apartments.

19

Hmm, I think you accidentally a link.

20

This topic was automatically closed after 60 minutes. New replies are no longer allowed.