…As new entrants push older ones backwards
Since the emergence of ride-hailing platforms in Nigeria, commuting across the city centres have not been the same.
For many of the up-wardly mobile residents, ride-hailing offers convenience that the conventional taxi does not provide.
This is so because commuters can book their ride from the comfort of their homes or offices without having to visit a bus/motor park as the usual practice.
The ride-hailing market in Nigeria has witnessed significant growth and development in recent years.
Read also: Transport firm promises cost-effective alternative in ride-hailing operations
Ride-hailing brands in Nigeria include: Bolt (formerly Taxify); Uber; inDrive; Rida; LagRide; Shuttlers, and Oga Taxi, another homegrown brand that offers convenient ride services with a focus on users’ safety.
Over the years, customer preferences have played a crucial role in the development of the ride-hailing market
However, with the innovation came a stiff competition that has made the sector very interesting for all the stakeholders.
According to Statista, the ride-hailing market in Nigeria is anticipated to generate a revenue of US$303.31 million in 2025.
Accordingly, the sector is expected to exhibit an annual growth rate (CAGR 2025-2029) of 11.99 percent, leading to a projected market size of US$477.11 million by 2029.
The user penetration rate for 2025 is predicted to be 14.1 percent, which will decrease to 16.7 percent by 2029.
It is also anticipated that the number of ride-hailing users in the Nigerian market will hit 42.88 million by 2029.
“Urbanisation, smartphone penetration, and the increasing demand for efficient transportation options are key drivers of this surge,” Timothy Oladimeji, inDrive country representative in Nigeria, said in a recent BusinessDay publication.
According to him, the ride-hailing market is ripe for innovation and competition focused on affordability, safety, and convenience, which will reshape the entire industry.
Oladimeji opined that the sector faced several challenges, such as inconsistent internet connectivity, safety concerns, and regulatory hurdles, despite its bright future.
According to him, these huddles are limiting factors that must be addressed for the sector to reach its full potential.
The ride-hailing market is an online-only market, with an expected average revenue per user (ARPU) of US$9.03.
However, that revenue is being challenged by socio-economic factors like inflation and a youthful population driving the demand for affordable, app-based mobility solutions.
The affordability of service and need to grow market share have birthed some innovative offerings by competitors in the ride-hailing market.
For instance, inDrive marks its market penetration by giving commuters the power to negotiate their rides; something that was alien to ride-hailing before its emergence in the Nigerian market.
Similarly, Shuttlers, one of the homegrown ride-hailing platforms, provided ride-sharing opportunities for commuters, which was also another first in the market as of when it was introduced.
Despite challenges posed by poor infrastructure and security concerns, ride-hailing services in Nigeria continue to grow due to high demand for affordable transportation options.
“We need more players that will increase the price of fare and percentage cut for trips,” Williams Fredrick Ebisinte, a former driver on one of the ride-hailing platforms, told BusinessDay.
Ebisinte, who spoke on the plight of the drivers, said that ride-hailing is profitable, but that drivers spend more on fuel and profit cut from the platforms. “So, we are left with little.”
He advocated for more players to deepen competition within the sector, and help drivers improve their take-home. “For me, a 15 to 25 percent cut per trip is not competitive,” he said.
But, with the growing demand for reliable transportation, ride-hailing apps have become a crucial part of daily life in Nigeria.
Whether you need a quick commute to the office, a trip to the airport, or a weekend outing, ride-hailing is now the plug for many young Nigerians across the city centres.
Competitive market
Urban hubs such as Lagos, Abuja, and Port Harcourt have been leading the growth trajectory of ride-hailing in Nigeria, with an increasing demand for efficient transportation.
However, smaller players in the ride-hailing market have had to compete with globally backed platforms for market share, which make for the considerable challenges against industry giants.
On the back of the stiff competition, those aiming to thrive have adopted some innovative practices that speak to the needs of their customers, while also considering expansion into underserved cities where competition is less fierce, but growth potential is high.
“I have both inDrive and Bolt apps on my phone. Bolt has been on an aggressive campaign for some months now, offering me 20 percent off my next five trips,” said Oluchi Ezeobi, a Lagos-based based commuter.
The further shared some of the campaign messages she received from the platform thus: 20% off your next 5 trips; “It is no secret that Bolt rides are affordable, but that does not mean they cannot get better.
“They also come with features to keep you safe before, during, and after rides. Tap the button below to enjoy your discounted rides.”
Similarly, the platform also communicates its safety plans with people on their platform. Oluchi also shared the following message tagged: ‘We’ve got your back’….
“Your safety’s our priority — always. We’ve implemented various initiatives, including driver guidance, driver identity verification, and 24/7 customer support, to provide you with the best ride experience.”
Read also: Nigeria’s ride-hailing market in 2025: Growth, innovation, and emerging trends
Market innovation
Ride-hailing services provide a solution that addresses Nigeria’s transport inefficiency and offers precision, convenience and affordability for the growing young population.
Further driving ride-hailing adoption is the rise of smartphone penetration, which made it easier for customers to access and use ride-hailing apps from their comfort zones.
Trends in the market have also contributed to the growth of the ride-hailing industry in Nigeria.
But, as competition intensifies, ride-hailing platforms now place emphasis on customer-centric innovations to drive traffic and grow bottom-line.
Shuttlers, a local brand, leads the space for carpooling and corporate transportation in Nigeria, by championing the idea of ride-sharing to grow its market share.
inDrive also allows both drivers and commuters to negotiate price creatively on the platform, furthering giving people on its platform a pool of choices to pick from.
Features such as flexible subscription models, multi-modal transport integration, and loyalty programmes are some of the innovative features adopted by the market.
The sector is also not letting safety issues sleep-bye as operators have responded with the introduction of security features like SOS buttons, real-time tracking, and more robust background checks for drivers.
Collaboratively, the ride-hailing platforms are deepening safety measures that ensure greater passenger confidence and satisfaction, making ride-hailing services more appealing option for a wider range of users across Nigeria’s city centres.
