• Says driver economics must shape industry’s future
James Emejo in Abuja
Nigerian mobility technology company, SimpliRide, has called for a fundamental rethink of the business model underpinning Nigeria’s ride-hailing industry.
The firm noted that escalating fuel, vehicle maintenance, insurance and financing costs are placing mounting pressure on drivers.
The company made the call against the backdrop of Uber’s decision to discontinue its ride-hailing operations in Nigeria after 12 years.
However, Country Manager, SimpliRide, Alero Fregene, described the development as an opportunity for stakeholders to reassess the economics and long-term sustainability of the sector.
He said the sustainability of the ride-hailing ecosystem was ultimately tied to the economic viability of the driver.
According to SimpliRide, the central question confronting the industry is whether drivers, who bear much of the cost and operational burden of providing mobility services, can generate sufficient income to sustain their businesses.
Drivers, she noted, are typically responsible for acquiring or financing their vehicles, purchasing fuel, servicing and maintaining them, as well as meeting insurance and other operating expenses.
Fregene said the industry therefore needed business models that reflected the realities of those carrying the largest share of operating costs.
In a statement, she said, “Uber was a pioneer of modern app-based mobility in Nigeria, and its contribution to the development of this industry cannot simply be erased because the company has decided to leave.”
She added that the changing economic environment required mobility platforms to continuously reassess their models.
“Markets evolve. Economic realities evolve. And business models must evolve with them,” Fregene said.
SimpliRide operates a subscription-based model under which drivers pay a fixed platform fee rather than surrendering a percentage of each fare as commission.
The company said the approach was designed to provide greater predictability for drivers and limit the effect of rising commission deductions as trip volumes increase.
Fregene said the model was developed around the economics of drivers, whom she described as the “economic engine” of the ride-hailing industry.
She said, “We asked a very basic question: if the person providing the vehicle, purchasing the fuel, maintaining the vehicle and physically delivering the service cannot build sustainable economics, how sustainable can the ecosystem around that driver ultimately be?”
She argued that Nigeria’s ride-hailing market could not simply replicate models developed for other economies without considering the peculiar cost structure of operating vehicles in the country.
According to her, vehicle ownership and financing costs, fuel prices, maintenance expenses and insurance obligations in Nigeria create a different operating environment for mobility companies and their drivers.
Fregene said this provided an opportunity for indigenous operators to develop business models more responsive to local market conditions.
However, she cautioned that being a Nigerian company would not, by itself, guarantee success in an increasingly competitive mobility market.
“Being Nigerian does not automatically make a company better,” she said, stressing that local operators must continue to compete on technology, reliability and customer experience.
She also emphasised the need to strike a balance between the interests of drivers and riders, stressing that improving driver earnings should not result in fares becoming unaffordable for passengers.
She said sustainable growth in the sector would require an equilibrium between affordable fares for riders and viable earnings for drivers, noting that both sides were critical to maintaining adequate supply and demand on ride-hailing platforms.
Meanwhile, SimpliRide said it was expanding its Driver Transition Programme to accommodate professional drivers seeking additional sources of ride demand following developments in the sector.
The company said participating drivers would not be required to abandon other ride-hailing platforms, potentially allowing them to operate across multiple platforms as they seek to maximise their earnings.
Beyond individual passenger transportation, SimpliRide also identified an opportunity in the corporate mobility market following Uber’s withdrawal from Nigeria’s corporate transportation segment.
It said businesses, hotels and institutions requiring employee transportation, airport transfers and other structured mobility services would continue to need reliable alternatives.
The company disclosed that its platform had recorded more than 23,000 downloads.
Fregene, however, said downloads should not be treated as the primary measure of success in the highly competitive ride-hailing market.
She said more meaningful indicators included the number of active drivers, rider demand, completed trips and the reliability of services delivered through the platform.
With Uber’s exit altering the competitive landscape, operators are expected to intensify efforts to attract both drivers and passengers while confronting the broader challenge of rising mobility costs.
The company maintained that the next phase of the industry would depend on the ability of operators to build models that are commercially viable while responding to the realities of Nigeria’s transportation market.