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Has Oride pushed Gokada out of the market?

What is the question many two-wheel ride-hail taxi service customers in Nigeria are asking.

After making a strong showing when it emerged, and nicknamed the Uber of the two-wheel ride-hailing service in Nigeria, Gokada seems to be gasping for breath, as it faces the stiffest competition yet from Oride, an ubiquitous rival, owned by the digital payment platform, Opay.

The Norwegian browser-owned company is steadily pushing Gokada to the brink after its parent company, OPay, got $50 million (N18 billion) in Venture Capital in July this year.

Oride, popularly known as OPay by many riders, subtly adopted almost the same colour scheme as Gokada, making it difficult for customers to differentiate between the two market leaders.

It adopted its parent company’s name, OPay, a digital payment system, as its street name, a move analysts say is a smart one. It is now becoming the generic name for the two-wheel taxi business in Nigeria, a spot previously occupied by Gokada and Maxng, another pioneer.

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Why is Oride riding the waves so high recently?

After raising N18 billion by OPay, the company went ahead to strengthen its ride-hail service with much of the money by acquiring more bikes and bringing more pilots into its net.

Riders say they pay as little as N200 for a trip that others would ordinarily charge triple the amount.

Customers also commended their wallet system. The wallet is powered by OPay.

“You can save money into your OPay account and use it for the rides, Solomon Ojei told The Nigeria Xpress.

He is one of the many customers who have found Oride convenient and accessible because of their ubiquitous nature.

The China connection

Lead investors in OPay include Sequoia China, which seeks to unlock the over billion dollars trapped in the transport business in Nigeria.

According to reports, OPay will use the money to expand Oride and OFood, which is taking on JumiaFood.

Oride has also expanded to bus rides, bringing the competition to the mainstream transport sector.

Fitted with air conditioners, OBus, as they are called, ply major routes in Lagos, Nigeria’s commercial hub.

To start, OPay’s raise tracks greater influence in African tech from China, whose engagement with African startups has been light compared to China’s deal-making on infrastructure and commodities. OPay founder, Opera was acquired in 2016 for $600 million by a consortium of Chinese investors, led by current Opera CEO Yahui Zhou.

The majority of the investment for OPay’s raise comes from Chinese funds and sources, including Source Code Capital, Sequoia China and GSR Ventures. There’s not a lot of statistical data on the value of Chinese VC investment in Africa, but a large portion of the $50 million to a fintech venture stands out, reports TechCrunch.

OPay could support the shift of Nigeria surpassing Kenya as Africa’s digital payments leader. For years, Kenya has outpaced Nigeria in Peer-to-Peer (P2P) digital payments volumes and digital financial inclusion, due largely to the rapid adoption of mobile-money products, such as Safaricom’s M-Pesa.

Maxng still shines?

Due to its distinct yellow colour, Maxng, another competitor, still holds its ground and is the one believed to be giving Oride a fight for its money.

After raising over $7 million in venture capital in Series A funding in May, Maxng has also gotten backing from Japanese company, Yamaha and is venturing into the delivery business.

The startup will also expand to 10 cities in West Africa (starting in Ghana and Ivory Coast) and add new vehicle classes, including watercraft and three-wheeled, which it is now doing with its MaxKeke in Lagos and other cities in Nigeria.

“We intend to invest massively in our technology capabilities, including the company’s payment infrastructure,” Chief Finance Officer, Guy-Bertrand Njoya said.

And in what could be a first in Africa’s growing motorcycle ride-hail market, Max will use its new funding for EV development.

“We’re piloting electric motorcycles in partnership with EV manufacturers and working with grid operators across Nigeria to deploy charging stations,” Njoya said.

Co-founded in 2015 by MIT Sloan graduates, Adetayo Bamiduro and Chinedu Azodoh, Max has completed over one million trips and is one of the largest delivery partners in West Africa for Jumia, the e-commerce platform that recently listed on the New York Stock Exchange.

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Gokada still in the game?

“Yes,” says a staffer of the company who prefers anonymity. “It’s not as if we are not competing. As you can see, we redesigned our app to provide better navigation and synergy between riders and pilots,” she said.

Like Max, Gokada also has completed over one million rides and has over 1,000 pilots on its platform and recently raised about $5 million in venture capital.

It differs from other ride-hail ventures in that it doesn’t split fare revenue with drivers. Gokada charges drivers a flat-fee of N3,000 a day (around $8) to work on their platform. The company is looking to generate a larger share of its revenue from building a commercial network around its rider community.

Even though it claims to be in the business, current trends suggest it is struggling to catch up with Oride, which has implemented an aggressive marketing strategy for its business.

Many riders attest that they encountered Oride mostly on social media, the one thing Gokada hasn’t been seen to do very well.

Analytics from Google trends show that Oride is trouncing both Max and Gokada on many fronts.

In July this year, Oride soared in popularity on social media due largely to the $50 million injection its parent company got from investors.

As of September, the ride-hail service is still leading the pack with 51 per cent in online presence, followed by Gokada and Max.ng respectively.

It is estimated that there is over $1 billion trapped in the transport business in Nigeria and analysts say it will take an organized transport system to unlock it.

Gokada may be competing but Oride and Max are gradually pushing it into the precipice.

Whatever needs to be done to bring Gokada back to the consciousness of Nigerians should be done now.

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