Logistics the future of ride-hailing companies in Nigeria
Rumors that ORide a vertical of Opay, one of Nigeria’s leading tech companies was on a mission to sell some of their 200cc motorbikes stormed Twitter last week. Now the rumors have been confirmed that the company has in fact already begun selling off a small percentage of their 8000 or so bikes in major parts of Lagos.
ORide with a new delivery business, OExpress is now finalizing its transition into the logistics business joining other bike hailing platforms like Gokada and MAX. The motorbikes were confirmed to be sold between N180,000 and N270,000 depending on how long they have been in use.
As the tech firm adds another vertical with the OExpress delivery service, selling off these bikes makes much sense as 8000 is a rather significant number and the company realistically does not need that may bikes to operate a reliable delivery platform in a city like Lagos that is already flooded with many logistics companies.
Why is Logistics seemingly the future of many ride hailing firms in Nigeria?
This shift by the tech firm came as a strategy to stay relevant following the February ban on bikes and tricycles in the city of Lagos. Although platforms like ORide, Gokada and Max were originally designed to serve as consumer apps, the new regulations from the Lagos State Government, make that rather unachievable.
Now with this pandemic and the growing need to have goods delivered to offices and homes in order to promote human safety, logistics businesses all over the globe not just in Nigeria are seeing a spike and so it does make for a brilliant business move on the part of these tech firms.
Even Uber and Bolt have their own versions of logistics offerings with Uber Eats and Bolt Food.
Within Nigeria, there is a high probability that even post this pandemic era many opportunities may arise for deliveries, logistics and other players in this industry. Some of which are:
- Bikes for sale may lead to an increase in competition in the logistics industry as each operator increases their inventory and many interested could start investing with the purchase of some of them.
- There is always going to be a high demand and supply of essential commodities, from FMCG to Healthcare, which means business may not dip for suppliers, logistics and manufactures
- Nigerians are relentless and Nigerians seeking to work even more so. Those who may be concerned for a short supply of riders, may need not to as chances are, with the increasing number of job losses from this pandemic, almost anyone will be willing to work in logistics as long as it pays.
Logistics and deliveries are one of the few industries that seem to have survived the rippling effects of Coronavirus and as matter of fact is thriving globally. It has kept the ecommerce space up and running as well, we can see that in global tech giants like Amazon and locals like Jumia, Konga and Jiji.