The motorcycle hailing business is a big boom across Africa, given the convenience it brings to the transport sector, and stakeholders have a lot to earn from it. In Nigeria, a ripe market with a population of over 190 million, Gokada had found a fortune and was on the rise with a growth in clients and employees.
However, the latest gathered about the company is that it is shutting down business within the country, though not for good.
Why is Gokada shutting down?
A visit to the company’s site draws your attention to the statement, “Gokada is currently undergoing a scheduled relaunch of our service. We will be back online better than ever August 26th! Sorry for the inconvenience.”
According to the CEO, Fahim Saleh, all Gokada pilots will be off the roads and the Gokada app will be shut down with effect from today Wednesday, August 14th, 2019 for a new launch. Apparently, the relaunch has been fueled by an increase in the competition, regulatory hurdles, and operational issues.
Let’s examine each of these issues.
Increased Competition
In just a year, Lagos has registered the existence of at least four motorcycle-hailing companies launch to compete for the over 10 million people that take bikes for transportation.
The competition in the likes of Max, SafeBoda, and Oride poses a lot to do for Gokada with much of what the latter began with now a mark of history to the new entrants. Additionally, the safety precautions and red flag raised on bike transportation by the Nigerian authorities gives the company a lower rating compared to car-hailing services like Uber and Taxify.
Regulatory hurdles
As reported by Quartz Africa, Nigeria proposed new regulations required for motorcycle hailing companies to operate as part of local transportation infrastructure. Under these, each startup is required to pay annual licensing fees of close to UGX 260 million ($70,000) per 1,000 bikes and then about UGX 300,000 ($83) for any extra motorcycle.
Additionally, the companies are also expected to pay annual taxes on revenue. Gokada has over 1,000 riders signed up and is probably affected by the regulations.
Operational Issues
In his Medium post, Gokada CEO Fahim expressed his frustration and irritation on the failure of the app drivers to follow basic directions and Google Maps.
“How could I be the CEO of Gokada, the company that pioneered motorcycle ride-hailing in Nigeria and be saying this? I was disappointed in Gokada but most of all, I was disappointed in myself.” – he writes
Fahim says the company will relaunch with brand new bikes; retrained drivers – in customer service, hygiene, driving, and navigation use; improved safety measures – Maximum speeds, adhering to all traffic laws, new Bluetooth helmets; and with happier drivers – who will maintain their bikes for free, join in a drivers club, and access health benefits.
