After the initial subsidy removal in May 2023, *Ezekiel Tokunbo used to fill his tank with ₦35,000 and make ₦110,000 in a good week. However, a further increase in the price of petrol in Nigeria has reduced his earning capability.
He now spends over ₦65,000 to fill his tank but the revenue he makes hasn't increased significantly. This is because he spends most working hours on fuel queues, and demand for rides has reduced.
"Nowadays, I wait for up to an hour to get requests in hotspot locations," Tokunbo lamented as he drove to my destination.
One of his colleagues, who simply goes by Daddy Deji, isn't surprised at the decline in ride requests. "You can't really blame people; the money is not there. What would have been the price for going and coming is now the price of going alone."
Daddy Deji said that the money from the few rides they get is spent on petrol. He added that the public buses people opt for are also facing the same ordeal and they could be forced to increase prices as well.
Bolt has already announced a price increase in Nigeria. The ride-hailing company increased its base fare by 15% following the increase in the price of fuel and the current economic hardship in the country.
While price increases are necessary to help drivers offset the fuel price hike, they also deter riders from taking rides. One Bolt user said they now opt for public transportation following the price hikes.
Another said they use a mix of public transport buses for short rides and ride-hailing vehicles for long-distance journeys.
Reducing the amount spent on ride-hailing apps has become necessary as the economic situation in Nigeria worsens. While the latest figures by the Nigerian Bureau of Statistics (NBS), show that headline inflation in the country reduced to 32.15% in August 2024 from 34% in July, Nigerians are still feeling the pangs of inflation.
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One Uber driver who spoke to Techpoint Africa said people now have to choose between comfort and affording basic needs like food.
These basic needs have continued to increase in price, with food inflation hitting 40.9% in June. This has been a major pain point for many Nigerians, but ride-hailing apps are not the only things competing with food.
Food prices are also competing with other things like entertainment. In 2023, MultiChoice Nigeria, a satellite TV provider, announced an increase in the prices of its DStv and GOtv packages due to worsening economic conditions in the country.
Even businesses are feeling the pangs of the economic situation. In 2023, GlaxoSmithKline (GSK), a British multinational pharmaceutical company, announced plans to leave Nigeria after 51 years of operating in the country.
Procter & Gamble, another multinational company, also announced the termination of its on-ground operations in Nigeria in 2023. The company stated that it was leaving the country because operating as a dollar-denominated organisation in Nigeria’s complex macroeconomic environment was difficult.
This means being a dollar-denominated organisation while you earn naira — which is constantly losing value — is difficult.
This currency devaluation is a major challenge to other companies like MTN which recorded a $101 million forex loss in 2023.
This big problem trickles down to ride-hailing drivers like *Sunday Lookman who has to pay car loans daily.
It is worse for Moove drivers
Uber drivers who got vehicles through Moove's car financing seem to be the worst hit. Lookman, who received the Suzuki S-Presso, told Techpoint Africa that fuelling the car and making a profit has become difficult.
"Before I could fill the tank with ₦18,000, now it is about ₦30,000."
Lookman said he's an UberGo driver and is restricted to operating only within Victoria Island, Lagos. He believes reduced requests affect him even more than other drivers.
He said Uber recently increased prices, but he hasn't felt that increase in his finances. Whatever he has left after a day's work goes to buying petrol and paying off his daily car loans.
Techpoint Africa reached out to Bolt to know the extent of the reduced requests and how it is affecting the platform but didn't get a response. If the situation is as grave as the drivers say, then platforms probably have it just as bad.
