Lagos Okada/Keke Ban: Gains, Pains of Brands
Following the recent ban of tricycles (keke) and motorcyles (Okada) by the Lagos state government in 15 Local Government Areas, the effects have been greatly felt by some businesses.
According to Lagos State government, the new law which became effective from Saturday, February 1, 2020 is meant to ensure safe transportation in Lagos.
This analysis expounds on how this new law will positively and negatively affect some businesses that have in one way contributed to reducing transportation issues in the state.
For the ride-hailing startups like MAX.ng (bikes and Keke), Gokada, ORide, OTrike, this law has greatly put a halt to their business activities, thereby creating losses for these business owners.
Since the last 2 years, there has been a significant rise in the number of commercial motorcycles operating in the state as a result of congested traffic that has affected ease of movement for commuters.
On 31st January, commercial motorcycle operators, comprising Gokada, Max and 1st Ride companies staged a peaceful protest against the recent ban of their operations in parts of Lagos State.
The operators, who protested from Ojota area to the Lagos State House of Assembly, Ikeja, called on the state government to regulate their operations rather than ban them.
More than 260 commercial motorcycles, including those belonging to operators like O’Pay, Max Okada and GoKada and 120 commercial tricycles were impounded by the police.
Mr Steve Orajiaku of 1st Ride company, told newsmen that the state government did not consult with the operators before taking the decision.
An undergraduate currently undergoing her industrial training at Gokada, Sandra, while urging the government to consider them, lamented that it was her source of livelihood as she earns 20,000 Naira per day.
In an interview with the Punch Newspapers, Adetayo Bamiduro, Chief Executive Officer and co-founder of MAX (Metro Africa Xpress), disclosed that the company has invested over N5bn in Lagos before okada ban.
He said, ‘’In terms of equity investment and shareholders, MAX has put in close to $10m (about N3.6bn) in the state. And in terms of financing, things that have been done cost well over $5m (about 1.8bn) in the business that has been mobilised for providing micro loans to okada and vehicle operators in the state.’’
However, still optimistic about the stability of his business, Bamiduro stated that the company currently is operational in four states in Nigeria.
‘’We are in Kano State and we are growing very quickly in that state; we are creating about 300 jobs every single month in Kano. We are operational in Ondo State, Ogun State and in Ibadan, Oyo State. We are not just a Lagos State-based company; we are a Nigeria-focused company,’’ he said.
Also, speaking in an interview with Techpoint Africa, Kayode Adegbola, Founder, and Lead Advisor of Golborne Road Advisory, explained that commuters, commercial keke and okada riders, and staff of ride-hailing platforms will feel the effect of the ban negatively.
“The government has the power to issue such a restriction and considering what happened, the only thing that could have possibly prevented it, would have been increased engagement between the union of road transport workers, the ride-hailing platforms, and the government themselves,” says Adegbola.
Speaking on other alternatives, Adegbola believes that there are better ways to resolve these issues than resorting to violence.
He noted that the ban on regular commercial bikes and tricycles could also mean reduced revenue for the different road unions in the state, it might indeed be an opportunity for collaborative engagement alongside ride-hailing companies.
In as much as some businesses have crashed, others have upgraded their strategies to meet up with high demand of transportation, thereby generating enough profits for their business.
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Car-hailing firms like Uber, Bolt, and Ocar among others have used this opportunity to increase their efforts, customers and profit margin. We may not know if their operations may be regulated or not by the state government, but for this particular period, more increase will be recorded.
Lagos state government brought out palliative measures to lighten the situation. BRT buses plying seven routes across the affected areas, including Oshodi-Ajah, Inner Marina-Ajah, Obalende-Ajah, CMS-Ajah, Ikeja-Ojota, Ikeja-Ogba and Berger-Ojota have been released as alternatives. The ban has also encouraged more revenue generation for the state government.
Lagos State Governor, Babajide Sanwo-Olu also commissioned eight newly acquired speed boats last Tuesday, which will be operated by the Lagos Ferry Services (LAGFERRY). The event marked the commencement of commercial operations on waterways transportation by LAGFERRY.
The governor also launched a mobile application designed to facilitate easy access to water transportation. LAGFERRY’s operations will cover six routes which include Ikorodu to Falomo; Ikorodu to Ebute Ero and Marina; Ebute Ojo to Ijegun Egba, Apapa and Marina; Bayeku to Oke Ira Nla and Falomo; Mile 2 to Marina, and Badore to Ijede.
