The Lagos State Governor, Babajide Sanwo-Olu set to restructure the transportation sector to a competitive market for the private sector existing in the transport business. The Lagos state government debuts another ride-sharing state service dubbed Lagos Ride aimed to relieve the deranged means of transporting the enormous Lagos population.
Sanwo-Olu has reportedly deployed a thousand branded units of SUVs to commence the state ride-sharing commercial service. The slogan to motivate a lucrative ride-sharing state service is commuting riders with the most suitable SUV vehicles to “ride in comfort” within the metropolis of Lagos state.
Lagos Ride or LagRide is another employment opportunity limited to a thousand population available to drive the latest version of Lagos state ride-sharing service via SUV vehicles. Sanwo-Olu’s employment creation is at the expense of lavish expenditure in contrast with the budget the Lagos state government revealed last year
Sanwo-Olu’s board of legislation seems to have spent public funds on the wrong investment rather than dedicate state resources in creating credible social amenities that develop the metropolis of the state.
For context, the previous LagBus manager, Seyi Osiyemi, and several other Techbooky analysts have shared insights reporting instances where the Lagos state government should have focused on orchestrating developmental solutions, including, building the metropolitan street of Lagos, equipped educational institution, endorsing subsidies on domestic utilities such as fuel price, minimal fare price for commuting with the current ride-sharing bus company christened BRT, distribute affordable electricity, etc.
Osiyemi reveals his “concern whenever Government gets involved in business enterprise that should be private sector-led. Government should rather invest its resources in the provision of amenities to bolster the money market and attract foreign investors instead of competing with the private sector in the ride-hailing business.
The previous LagBus manager currently works for the Dubai Transportation Service. “In my years of travel, I’m yet to visit any city where Chinese vehicles are used for taxis. And they must be a reason for that. The question is, can these Chinese brand vehicles withstand the harsh road and traffic conditions in Lagos? …..only time will tell.”
The Lagos state government signed a compact with CIG Motors LTD. The automative company deposited a thousand SUV vehicles to face the disturbed metropolitan road of Lagos. Sanwo-Olu’s keen approach to establishing another project towards the end of his tenure as Lagos state governor — is likely to influence Nigeria’s list of failed projects.
The Lagos state government reportedly paid the Chinese automotive company $20,000 equivalent to millions of the Nigerian local currency, Naira. The state government should have rather used the state resources to stabilize Naira in the Foreign Exchange Market (Forex).
It is a no-brainer that Lagos Ride is a member of the Lagos Corporative Society whereby the Lagos state government also shared a compact with the Lagos Ministry of Wealth Creation that enables the Lagos Ride Drivers to own the vehicles in line with the installment package drafted to be active through a four-year timeline.
“I did a quick back-of-the-envelope analysis of the scheme’s financial viability and the numbers don’t seem to stack up. Interested drivers/partners are expected to make an upfront deposit of 20% equity (N1.8m/$3,200). In addition, the driver will pay N8,700 ($15)per day towards the cost of the vehicle and 25% commission on revenue,” Osiyemi continued.
Now let’s do the maths. Let’s assume a driver makes a daily revenue of N25,000($44). A full tank of petrol for the day will cost him about N8,000 ($14). He will also pay 25% commission, which is N6,250 ($11), plus N8,700 ($15) per day towards the repayment cost of the asset. So at the end of the day, the driver is only left with N2,000 ($3.60) per day. Now, the rhetoric questions pop up on “how will the drivers keep up with vehicle maintenance?
Sanwo-Olu remains optimistic about officiating the ride-sharing service in the second half of 2022. “The initiative is targeted at improving mobility and creating a multi-modal transportation system for Lagosians.” Sanwo-Olu’s comment was addressed in optimism how he paraded hundreds of Lagos Ride’s vehicles through the Third mainland bridge. “The modern ride service is one of the State Government’s socio-economic intervention programmes, which will be professionally managed in line with global best practices.”
In sum, this is not the first time that govt will be involved in the ‘leasing’ of vehicles for taxis to private individuals. This is usually disguised as “empowerment programs”. However, what we don’t know is how this scheme will be different from previous failed projects. But in the meantime, let’s watch this space.