Five Uber drivers were arrested yesterday, allegedly for operating without a hire car permit and driving without proper insurance. Two of Uber’s local offices were also raided and three staff members detained, according to the the South China Morning Post.
Hong Kong is only one in a growing list of cities where there are anti-Uber actions by the police, taxi drivers. the city council or some other group
Meanwhile in Nigeria, it’s happy happy joy joy
The other day I asked the Uber guy on the driver’s seat; "have you had any run ins with anyone; taxi drivers, the police, the omo onile’s , anyone?
He smiled and shook his head. “No,” he said. “Never”.
Uber’s success in Nigeria so far is a real testament to the beauty of global best practice executed locally and props really have to go to Ebi. She is amazing and freakishly smart (I’m not washing her).
Here was the formula I believed worked well for them : turning upper middle class people into Uber car owners.
When Uber first came, they relied a lot on car hire companies. You know those expensive ones that charge you 6k for a trip from Fourpoints Sheraton to Yaba. For these people there was a lot of misalignment. The drivers made more money working with you ‘one on one’. The companies treated uber as a side job. The experience sucked a lot.
Then quietly Uber started to get upper middle class people to put their cars on the road. Here is how it works :
Your car is probably a liability to you. It is parked at least 8 hours a day not making you money. How about you turn your car (and other cars) from a liability to an asset by putting it on the road so you can make some side change (Nigerians love side change).
A lot of the Ubers on the road are owned by individuals. Many are new because of deals Uber has cut with car manufacturers like Kia. They are also driven by drivers who have been trained and recommended by Uber or a partner. Quite obviously since Ubers are simply private cars they would know how to navigate police and others.
The genius of it all is that especially in Nigeria where there isn’t an organized taxi lobby, the majority of uber car owners are people who will have influence in government and can ensure there will never be a clampdown. If govt were to even consider one - their nieces and friends In the upper middle class who are uber owners and users will raise an alarm.
Think of it as a reverse lobby in Nigeria.
I’m really impressed by Uber strategy and astounded by Ebis execution in Nigeria. It is a real testament to why global best practice and talent with local context make such a powerful combination for foreign companies looking to invest in Nigeria.
I haven’t heard of a Nigerian law banning on-demand Taxi services yet. Also, regulation in the transport sector is very low.
Uber is facing problems in countries where the taxi drivers are great enough and already have existing lobbying frameworks. It’s easier for these drivers to get governments to ban on-demand taxi services at will.
What has been your experience with Uber Lagos so far? Because it feels like the drivers I always get aren’t exactly upper middle class. But maybe a few notches above the regular taxi driver, based on their communication skills.
Great insight into the business model by @iaboyeji …not so sure your contention that by getting buy-in from the upper middle class Uber has side stepped potential legal issues is a valid one.
I am aware of a couple of interests monitoring Uber growth and working on a strategy to ensure that 1) the incumbents (regular taxi drivers) are able to compete better, and 2) more importantly ensuring the safety of passengers and third parties (regular road users) 3) bringing Uber and it’s drivers under the proper tax and regulatory administration.
The monitoring of the tech space is by no means limited to Uber, but the other golden boys that are making a name for themselves in Lagos particularly.
Think we are moving away from this…I know someone in govt model, and if that’s what Uber is solely banking on to avoid any regulatory oversight, then that might be a bit short sighted.
i agree with @iaboyeji, Nigeria is really cool place for business despite the infrastructural setbacks. @ebiatawodi 's concept of socio-economic class shift was a joker, I still believe Uber can still become stronger if they extend to those in the upper low class and those in the lower middle class, probably a startup that will produce a special ridesharing App using Uber APIs could help make this possible. Telcos use this weapon very well, i know one of such targeted products that have helped some Telcos exceed their financial target.
Nigeria is at a stage of raw capitalism right now, with little government regulation. The most regulated places being Lagos and Abuja. Reminds me of 19th Century America.
A part of my blog piece below.
TAKE ADVANTAGE OF NIGERIA’S WEAK LAW ENFORCEMENT
I urge Nigerians to take advantage of the lacklustre law enforcement in the country. Use the deadbeat politicians to your advantage. Monopolize industry without remorse. No business venture should be embarked on with the mindset of being a kind and fair-player. I’m not advocating illegality, however I advocate using the broken law enforcement and weak government to your advantage. For instance, in Nigeria only Lagos, Port-Harcourt and Abuja have any semblance of government presence. Nothing stops an entrepreneur from setting up shop in Benue State capitalizing on government absence. Without interference, a serious entrepreneur monopolist who understands the huge agricultural wealth in Benue State will be wise to set up rail lines all across the state, connecting farms, warehouses and transport depots. Sure there will be push back, but when your rail-lines become absolutely crucial to the economy of Benue State and the whole middle belt of Nigeria, the government suddenly realizes it’s powerless before you.
This isn’t underhanded in any way, rather it’s taking advantage of politics and environment. Morality is fickle, business is about profits and figures (without infringing on human rights). As an entrepreneur you don’t beg the government to regulate your business, that’s straight up crazy. Use your strengths. In Nigeria one of our strengths is an inefficient government. This reminds me of the saying, “Every situation no matter how bad has an advantage”.
Yes, we will take advantage especially in the ICT sector, companies like African Internet Group are taking advantage bigtime looking at the number of companies they are running
I’m not one to advocate for government interference in growth of industries or sectors, but there is a valid reason why governments regulate industries…the public good.
What happens if your hypothetical Benue railway line derails and kills individuals? Or the railway tracks go through farmlands rendering the surrounding area not fit for farming? Will your start up compensate the community and ensure they are able to find alternatives? will your startup deal with the communities when they begin to get violent?
Lack of proper regulation is one of the reasons our Niger Delta area started getting polluted and communities got affected (multinational oil companies were able to cut corners). Government is there as a regulator to ensure private needs do not outweigh public good. In your scenario, your startup CEO is a well meaning Nigerian eager to bring about prosperity to the good people of Benue state, what happens to your scenario when the CEO is a 2 bit hustler?
The underlying point I am trying to make is that yes by all means use the lack of regulation as an advantage, but do not dismiss the benefits regulation can bring even to startups (re anti-trust and cartel creation). Regulation when done properly levels the playing field, not a good thing for first movers and companies with deep pockets, but a great thing for the wider business community and more importantly the consumers…imagine regulation that could level the ‘operating’ playing field between Konga/Jumia and www.benddownselect.ng (fictional address, don’t click and don’t steal name, might use it for a future ecommerce startup )
Yeah you’re right, regulation can be good (not always). I was just saying to take advantage of inadequate regulation. And yes you’re right about the Niger Delta, the government didn’t do enough to stop private interests from polluting the area. However, no private profit-driven business person advocates for hindering regulation.
Very interesting insight. The upper middle class goodwill is like the perfect coup, I imagine this will hold for a very long time. It’s like no one cares. I also think the black car market is still so huge, so taxi operators are not feeling the pinch yet. When the fragmented taxi lobbies around Lagos begin to pay attention though, things could get ugly fast. Because when the omo oniles don’t get their cuts because taxi’s are not getting as much patrons as they used to, the godfathers starve too, and when the godfathers - with an abundant supply of angry brainless minions - starve…well … a lot of things go wrong. It’ll be interesting to see how this plays out.
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