Motorcycles Moving Mad
In this piece, we seek to understand the motorcycle hailing space in Africa. We take a look at the market opportunity, the reason it exists, players in the market and the different models they adopt as they expand across the continent. We also look towards the future of this sector.
What’s with the Motorcycle Madness in Africa?
Motorcycles are a really important part of the transport system in Africa. Most infrastructural and economic development tends to congregate in African cities, causing rural-urban migration, which increases the population of the cities and results in car-type vehicle congestion.
The way out of this congestion is typically motorcycles. Motorcycles allow commuters to beat traffic and enable easy movement through untarred roads. In Cotonou, a city in the Republic of Benin, there are more motorcycles on the roads than cars. When I need to get somewhere fast, I flag down an Okada.
What’s in a name?
Motorcycles are called by different names in the countries where they’re popular.
Tanzania, Uganda and Kenya: BodaBoda .
There are different accounts of the origin of this word, but legend has it that motorcycles were called “BodaBoda” because they transport people across a border easily without them having to complete paperwork i.e from Border to Border.
Nigeria, Ghana and Benin Republic: Okada.
In Nigeria, motorcycles are named after Okada Air, an indigenous airline because the motorcycles could manoeuvre through traffic easily and were fast.
Benin Republic- Zémidjan.
Money To Be Made
Technology startups are hoping to take a bite out of Africa’s projected $9 billion two-wheeler market. The business model is reminiscent of Uber’s on-demand model - connecting users who need rides with riders who drive motorcycles. These startups also promise professionally trained riders and provide safety equipment such as helmets and jackets.
How It Works
Usually passengers who use motorcycles, flag them down, negotiate a fare and zoom off. The rider typically decides the fare and can inflate it on a whim. Startups in this space have adopted some new models:
Passengers download an app, place a request, view estimated fare and get connected to a motorcycle rider. The fare is paid in-app or with cash.
Passengers who don't have an app can flag down a rider, view the fare estimate on the rider's phone and have the rider start the trip. These trips are paid for with cash.
Platforms typically adopt one of these models or a mix of both models depending on the passenger’s choice.
Modifying For Africa
The Uber-for-motorcycles model works well in East Africa where there is no restriction on motorcycle routes. In Nigeria however, the Lagos state government in 2012, banned motorcycles below 200cc cylinders on over 400 roads across the state.
Unlike Uber, Bolt(Taxify), and Lyft, motorcycle hailing startups in Lagos, own motorcycles on their platforms and some have opted for an asset finance scheme. In this scheme, motorcycle riders return a fixed amount to the company until the bike is paid off.
These schemes aren’t new to employees in Nigeria’s transport sector. In the late 90s, the military government in Lagos implemented a similar scheme as part of the National Poverty Eradication Programme (NAPEP) for tricycle operators - allowing them to pay a deposit fee and then a monthly fee for 12 months. Gokada, a startup in this space, claims that its drivers are able to own their bike after one year of service.
Moving Fast: A timeline
January 2015: SafeMotos launches in Kigali, Rwanda. Founded by Barrett Nash and Peter Kariuki.
April 2015: SafeBoda launches in Kampala, Uganda, providing motorcycles directly to consumers.
September 2015: Max.ng(Metro Africa Express) launches as a logistics platform for delivery in Lagos, Nigeria. Gets accepted into YCombinator.
October 2015: SafeMotos raises $131,000 in funding.
March 2016: MAX raises $1.1 million from Right Side Capital Management, Shell Foundation, and TechStars.
September 2016: MAX acquires food delivery startup EasyAppetite for an undisclosed sum.
June 2017: MAX launches MaxGo its on-demand motorcycle service in Lagos.
January 2018: Yegomoto , a Singapore-based company, launches in Kigali, Rwanda. The company currently boasts 15,000 riders on its platform. Over 1.5 million trips have been completed according to its website.
Gokada launches its motorcycle hailing service in Lagos.
SafeBoda raises series A of $1.12 million.
March 2018: Gokada announces seed round of $300,000.
Uber launches BodaBoda service in Kampala.
Bolt (Taxify) launches BodaBoda service in Nairobi, accepting only motorcycles manufactured later than 2014.
August 2018: SafeMotos launches in Rwanda.
October 2018: Google Maps launches Motorcycle Mode in Kenya. The service highlights landmarks instead of addresses.
November 2018: Uber launches Boda Boda service in Nairobi.
Yegomoto launches Rwanda’s first centralised phone booking system for Taxi cabs and motorcycle taxis.
Singapore-based Gozem launches in Lome, Togo with plans to expand into Cameroon. Announces it has $900,000 in funding.
January 2019: EasyMobility launches in Lagos. The company is primarily a motorcycle leasing company, its motorcycles are not on-demand and it has no app. Passengers flag down riders, negotiate prices and pay cash.
May 2019: Go! App launches in Somalia. Founded by Deeq Mohamed.
Gokada announces Series A of $5.3m from Rise Capital, Adventure Capital, IC Global Partners, and First MidWest Group.
SafeBoda raises an undisclosed amount in a Series B round. Investors include Allianz’s Allianz X fund and GoJek’s Go-Ventures. Begins plans to expand to Nigeria, hiring a Country Head for SafeBoda Nigeria.
Opera launches ORide in Lagos within its OPay platform. Opera had earlier announced a $100 million fund for Africa with $40 million for the Nigerian market.
June 2019: MAX announces Series B round of $7 million from Novastar ventures, Yamaha Group, Breakthrough Energy Ventures, Zrosk Investment Management, and Alitheia Capital.
July 2019: ORide expands into Ibadan, the third most populous city in Nigeria. It begins to train regular motorcycle riders in Lagos, provide them with helmets and add them to its platform.
OPay(ORide’s parent company) raises $50 million for mobile money services in Nigeria.
Gozem launches in Cotonou, Benin Republic. Announcing plans to launch in Gabon, Cameroon, Burkina Faso and Mali. It also eyes Ghana, Nigeria and Rwanda.
Innovating To Create Wealth
Ride-hailing platforms are creating jobs for some of Africa’s unemployed youth. At last count, almost 5,000 motorcycles have been purchased by ride-hailing companies in Lagos alone. These startups are hoping to purchase more as they struggle to fill demand during peak hours. During driver recruitment, these startups advertise up to 150,000 Naira(about $400) monthly income for motorcycle drivers who join their platform. Drivers also get the opportunity to own the motorcycles via the lease-to-own model.
Uh-oh, Watch Out For Potholes
The road is far from smooth for motorcycle-hailing startups. They face a massive liquidity problem as they scale and try to fill the demand. Riders in some cities prefer to accept only passengers who will pay cash, allowing them to change the estimated fare and charge astronomical fares for short distances. Passengers are unhappy about this process (it defeats the point of the service) and take to social media to air their grievances.
Sometimes, riders refuse to pick up passengers who have placed requests. Other times. they simply refuse to accept the ride. This means that even though there are many free riders, passengers don't get picked up.
Lagos-based Gokada recently offered a reward for passengers who report erring riders on its platform.
What’s The Future? Go-Jek?
Go-Jek is South East Asia’s motorcycle unicorn. Worth about $10 billion, Go-Jek uses motorcycles as a network platform for everything and has become a ‘Super App’. The Service allows its users to order food, send and receive packages, order event tickets, pay bills at Go-Jek stations and order for items online.
Motorcycle platforms in Africa are already thinking like this. ORide, Opera Software’s motorcycle play is embedded in OPay, its payments app. Also embedded within the app is OFood, its food delivery service. Gokada on the other hand, recently launched GBoat, a ferry service connecting two of Lagos’ islands while MAX provides delivery services for companies like Jumia and Nestlé.
It looks like motorcycles meshed with software, are embedded in the future of transport in Africa as competition gets hot in the mobility sector. Industry experts say these companies have barely scratched 2% of the addressable market and will be looking to raise more funds as they expand.
What are your predictions for the future of transport? Let us know in the comments. If you have any insight, thoughts or opinions that you want to share with us, we’d love to hear from you. Please send an email to firstname.lastname@example.org.
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Further Reading on Motorcycles
Marchetti’s Motorcycle -The Subtext by Osarumen Osamuyi.
GoJek becomes Indonesia’s First Decacorn- Entrepreneur.
How to Start a Motorcycle Ridesharing Company in Nigeria - Fahim Saleh, Co-founder, Gokada.
A History of Motorcycles in Africa- The Vintagent.