Nigeria’s Biggest City Bans Motorbike Taxis in Boost to Uber

LAGOS (Capital Markets in  Africa): Nigeria’s biggest city has partially banned the use of motorcycle taxis following an escalating number of fatal accidents, dealing a blow to Softbank Group Corp.-backed OPay and a potential boost to Uber Technologies Inc.

The Lagos State Government cracked down on the popular way to dodge traffic congestion in the commercial capital of Africa’s most populous country, calling the bikes and their three-wheel equivalents a “menace” that is responsible for “scary figures” regarding the loss of lives. Drivers ignore traffic laws and allow criminals to use the ride-hailing services as getaway vehicles, Gbenga Omotoso, commissioner for information and strategy, said in an emailed statement.

Between 2016 and 2019, “the total number of deaths from reported cases is over 600,” Omotoso said. “The only motorcycles allowed are the ones used for the delivery of mail services,” he added by phone.

The ruling is a setback for OPay, which is based in Oslo and has shareholders including Softbank and China’s Meituan Dianping. The mobile-payments company started its ORide service in Lagos in June, before raising $120 million later in the year to expand its various online services in countries such as Ghana, South Africa, and Kenya. Meanwhile Uber — which has operated in Nigeria for more than five years — may lose a fierce rival. Bolt also operates a car-hailing service in the city.

A spokesman for OPay declined to comment. Max.ng, a rival motorbike-taxi operator backed by investors including Yamaha Motor Co. Ltd. of Japan, said the company would contact the state government about how the ban will work.

‘Anti-Investment’
“The concern for us is how this will be implemented because we don’t want people getting hurt,” Co-Founder Chinedu Azodoh said by phone. “This is essentially aimed at disenfranchising technology-based mobility startups and an open admission that the government is not ready for investment,” Max.ng said in a statement.

Lagos has one of the highest car densities in the world, with about 200 per kilometer, leading to notorious traffic problems. Its vast and underutilized waterways are seen as a viable alternative to relieve pressure on the roads, and Uber started to experiment with boats last year.

The government has ordered 600 more buses and plans to commission six boats in February to serve as alternatives for commuters affected by the motorbike ban, Omotoso said.

Source: Bloomberg Business News