In early to mid-2019, Nigerians began to take notice of the vast number of motorcycle-hailing services popping up around the country.
While competition among these players was brewing and the ease of their services caught the eyes of many, there was a question of safety. How would these companies train their riders to become better than the average okada rider on the streets of Lagos?
As the director of marketing for MAX.ng, Ized Uanikhehi was concerned about this.
“It seemed clear at the time that the only thing these people were forgetting was human resources. They were bringing in a lot of bikes but who was going to ride these bikes?” she asked.
The problem she set out to solve was pretty clear. One of the biggest issues in the ride-hailing or logistics space is getting trained and qualified riders and drivers. Also, it can prove difficult working with experienced riders as most of them stick with methods of navigating through traffic around a bustling city like Lagos.
Initially, Uanikhehi wanted to pitch this to her employer but she couldn’t do so before leaving the company in February 2019. And with Roseline Ekenimoh and Charles Avackaa, she co-founded TORA Africa the following month.
The company acted as a human resources tech startup to verify, recruit, and train drivers and riders for individuals and businesses. TORA first set up its training campus in Mushin, a rural town in Lagos. There, the company was looking to tap into the massive unemployment by recruiting educated youth who hadn’t found work and training them to ride bikes.
“It was like selling shovels in a gold rush. And that’s exactly what we wanted to do,” she says to Techpoint Africa.
Solving an exploitative need
In its first five months, everything seemed to go to plan. That period saw TORA deploy over 100 riders, 20 of whom were women. Additionally, the startup raised an undisclosed seed investment from the Founding Partner of LoftyInc, Idris Ayodeji Bello.
But TORA’s business model at the time was questionable.
The process had clients in need of riders approach TORA and outrightly pay for a rider’s services. So in essence, the rider worked for the client.
Seeing as it wasn’t sustainable in the long-run, TORA changed to a subscription-based model where they were 100% in charge of riders and clients would ‘loan’ them.
To avoid issues with its clients, Uanikhehi says the startup did its best to effectively train riders.
“We trained them on how to use Google Maps, how to be courteous, how to talk to clients, and cleanliness.”
But the problem was that when TORA had trained about 100 riders, only half would be interested in getting deployed.
“So all the time and money spent on training the others went to waste,” Uanikhehi adds.
Like that wasn’t enough, some who were deployed to businesses would begin to slack months into their employment. According to her, these riders would find some excuse to take a week or two off without realising that it was detrimental to the clients they worked for.
But the subscription model helped the company with this challenge. This way, if a client had an issue with a rider, TORA would send a replacement instead of making a repayment.
However, this model had its challenges. Since the riders belonged to TORA, the company had to cater to their operational needs: from the Riders’ Card which serves as the licence for riders to clothing for a professional look, and transportation fare to their various workplaces.
Although the company took back these costs from the riders’ salaries monthly, Uanikhehi admits that the company got it wrong.
“Imagine deploying 50 riders and paying ₦4,000 Riders Card and paying for transportation for a month until they start earning salaries. Those initial costs weren’t sustainable for us at all.”
Empty promises, okada ban, and the lockdown
In August last year, while speaking with TechCabal, Uanikhehi made it known that ORide was the company’s biggest client at the time.
ORide, an offering from Opera-backed platform, OPay, had launched three months earlier. In July 2019, the company littered the streets of Lagos with green motorcycles while offering ridiculous discounts after it raised $50 million.
According to her, ORide had made contact with TORA for their services as they were expanding. Due to the number of riders OPay requested from the company, TORA made unnecessary expenses getting other spaces in Ikorodu, Iyana Ipaja, Mowe, and Ojo so they could get riders faster and train them.
While all these happened, Uanikhehi claims that TORA never received any payment for their services from OPay.
“ORide started out as our biggest client asking us for a large number of riders. But the truth is that ORide did not pay us at the end of the day, not one naira. We didn’t receive any money from ORide,” she says.
Uanikhehi also accuses the defunct ride-hailing company of using unsavoury business practices. She says at some point when OPay still used TORA’s riders, they stopped acknowledging that the startup referred the riders to them. This extended to OPay bypassing the company to recruit these riders.
“Some of our riders were planning how they would go directly to ORide without us being paid. There was a time ORide made an advert on social media and the riders in the video were ours. We reached out to them showing a video of those riders in training but instead of acknowledging and paying us, they just took down the video,” she adds.
After a lot of back and forth regarding payment with little headway, she says TORA decided to let the issue slide. And the encounter made the company focus on training riders for logistics businesses.
Then came the okada ban.
When the ban took effect in February, Uanikhehi and her team weren’t bothered because they had already pivoted to providing riders to logistics businesses.
But what they didn’t take into account was the high influx of riders into the market looking for work. And to save cost, logistics businesses that patronised TORA went straight for these riders.
“So our numbers dwindled. We used to have requests of 80 to 100 a day; they went down to 4 or 6 a day after the okada ban. I think it was when that happened we asked ourselves if we were still going to continue.”
At the time, the company was already providing a different set of services: driving services for a company dealing with bullion vans, mobile money agents for companies, sales girls for supermarkets, and welders for a company in Germany.
All these were quick ways to reduce the effect of the okada ban. But then TORA ran out of cash.
The company’s CEO, Ekenimoh, had left the country for Canada at this point, so Uanikhehi and Avackaa were left with the responsibility to raise money. As digital marketers, they had a plan to run campaigns for various companies and put the money back into TORA.
“We thought we were shutting down TORA temporarily, to come back and resume training a month or two later after we had raised money marketing for these businesses. Then COVID and the lockdown happened.”
The lockdown placed an enormous restriction on how the company operated and worsened the situation. Having run out of cash and unable to pay staff and trainee salaries, the pair decided to halt operations.
Moving on from TORA Africa
Uanikhehi says that as an investor, Bello was the reason the company kept going before it shut down. He had trusted the company enough to put in his money before coming down to Nigeria to see it. And for the ex-CMO, it was disappointing that the startup failed.
TORA tried to salvage something for itself. Because their requests for riders had dwindled to less than ten riders a day, and they had a lot of riders to work with, they built an on-demand app for different logistics players. The idea was to put them on the platform but the lack of funds made sure they didn’t see it through.
She recounts the company’s losses by admitting that they shouldn’t have started without getting enough funding in the first place. Then she goes on to say that TORA should’ve stuck with the subscription model, and also diversified its offerings earlier instead of focusing solely on riders.
“It was when the rider requests dwindled that we started to see other options in the informal sector. I think if we had done that from the beginning, we wouldn’t have been badly hit.”
In ten months of operation, TORA Africa was able to place 1,003 individuals in jobs across different organisations, and serve 118 SMEs and individuals.
Now, Uanikhehi has moved on to marketing, which she claims is her forte. She runs Loose Media, a marketing agency, and right now, that’s what she wants to focus on.
However, she feels TORA is still worth a try.
“If we were going to restart TORA, we’ll need to restructure. Is it something we can bring back? Definitely. I think TORA was a really smart move and I wish we had done what we needed to do earlier on.”https://www.zp-pdl.com http://www.otc-certified-store.com/osteoporosis-medicine-europe.html https://zp-pdl.com/apply-for-payday-loan-online.php http://www.otc-certified-store.com/mental-disorders-medicine-usa.html https://zp-pdl.com/online-payday-loans-cash-advances.php
Jan. 11: Bonus Built in Africa episode: Building global products with African design, a discussion
On March 25, 2021, Techpoint Africa will be hosting the brightest minds in decentralised finance/crypto at the Digital Currency Summit tagged “Building the money of the future” Click here for more details, registration and sponsorship. Location: Fourpoint by Sheraton, V.I. Lagos
Report: Millionaire West African startups” raised over $1.806 billion between 2010 and 2019, 97.9% of which went to Nigerian startups. Get a free overview and 50% purchase discount here.