Price Wars to Intensify in the Nigerian Ride-Hailing Market
When Uber expands in a new country, it unintentionally invites other companies to the same market. Uber entered Nigeria in 2015 and witnessed a fast-paced growth due to strong market drivers such as affordable data services and increasing smartphone penetration. Existing companies such as Afro, Easy Taxi, OgaTaxi and Smartcab made no dent in its market share, and some of these companies died a natural death or exited the market.
A typical Nigerian rider is not brand loyal and can easily shift to a lower cost ride hailing service. Low switching costs also aids in making the market cost sensitive. In 2016, Taxify entered Nigeria and captured considerable share from Uber by lowering its commission to 15% (compared to Uber’s 25%).
The entry of Taxigo, which is a ride aggregator app, will further intensify the competition as the company is claiming a lower 10-14% commission. Moreover, using this app, users will be able to compare charges from different ride hailing companies and private drivers, further intensifying the competition. - Aman Madhok
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Aug 24, 2018
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