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{NEWS}-We invested over N5bn in Lagos before okada ban — Bamiduro, MAX CEO

Published by on February 3rd, 2020.


We invested over N5bn in Lagos before okada ban — Bamiduro, MAX CEO

Adetayo Bamiduro, Chief Executive Officer and co-founder of MAX (Metro Africa Xpress), a motorcycle ride-hailing service, talks to SIMON UTEBOR about the impact the ban of activities of okada and keke in some local councils in Lagos will have on the company

Though the restriction of activities of keke (commercial tricycle) riders, okada riders (commercial motorcyclists), and motorcycle ride-hailing services like MAX and Gokada, will first start from 15 local councils in Lagos, how much effect do you think it will have on your business?
Regarding the ban recently announced in relation to commercial motorcycles and tricycle operators, no distinction was made between the formal operators like us and the informal operators who do not typically wear helmets or pay attention to regulations. Therefore, pronouncing a blanket ban that affects everybody, including those who are working very hard to contribute towards the greater Lagos vision will definitely impact on us and threaten our survival as a business. It has been quite a traumatic period for us and we are hopeful that the government would reconsider its position on this.
But you can still operate in many other local councils, at least till the pilot scheme is extended to other areas, as the state government said?
It is not just about us (the formal operators) – it is also about the commuters as well. The areas where the total ban has been enforced, the users and commuters in those areas relying on this service to move around are going to be severely affected. The areas where the ban has been promulgated are the most important areas for this business in Lagos because those areas constitute the commercial nerve centres of the state.
So, if a driver is completely restricted from operating there, in that case, we estimate that the incomes of the drivers will reduce. At least, they will lose close to 80 per cent of their income due to this restriction. It, therefore, means that this is quite a serious ban.
It also means that the company will also lose heavily…
Absolutely, our company exists because of our drivers, so whatever impacts our drivers – no matter how small, impacts us.
The Lagos State Transport Sector Reform Law of 2018, Sec 15(1) says motorcycles with 200cc engine and above are exempted from the restriction. Do you think that means you have the right to ply the highways and bridges as the law hasn’t been changed or repealed?
By the letters of the law, it exempts us because our motorcycles are above the 200cc engine required by the government. However, the government has control over critical state resources, including law enforcement. There is the law itself, the letters of the law and there is also the implementation and the intention of an announcement.
A press statement was released by the government and that person who released it cannot just be dismissed because it was made by the government. For us, even though by the letters of the law we clearly should be exempted, but the announcement that has been made brings us a lot of discomfort.
Do you think it was unfair to have included you and other motorcycle ride-hailing services in the ban?
As MAX, I will say unfairness is not the best word to use. I will say it is not the most effective way to do it. We know that the government also wants the success of the people of Lagos – it wants to make the best decision given the information available and all we have asked for is to have the opportunity to provide additional perspectives to the government and also an alternative that we strongly believe is in the best interest of the government. It is not so much about being unfair, it is more about: is this the best way to solve the problem that the government has correctly identified? We believe there is a better way to do this.
Before you and other motorbike ride-hailing companies came on board and invested heavily, what kind of commitments did you get from the state government?
We have had a few conversations with the officials of the government – both the past administration and the current administration – and they have seemed very impressed with what we have done and some of the results we have demonstrated.
First of all, we restored the culture of safety helmet in Lagos that was long gone in the last 20 years. That alone was quite impressive. Not only that one, we upgraded the quality of the vehicles to comply with the laws and regulations. Also, we have invested in technology as well, which ensures the safety of commuters and Lagosians. So, Lagosians have grown to absolutely love the service. All we are saying is that the problem that we are solving is a real problem that Lagosians feel. Why we understand the concerns that the government has raised, most of the concerns are legitimate concerns. The way to go about it in our own opinion and with all things considered is to properly regulate the industry rather than enforce an outright ban.
It was reported that services like yours have had to pay N25m to government for every 1,000 bikes brought in. How true is this and was there any mention that the restriction might come in the future?
In the engagements we have had with the government, we have had a lot of progressive conversation around regulation, around licencing, and around security and safety, etc. The conversations were quite clear that the government wanted to reform the industry. The reforms were targeted at ensuring that every single okada rider would comply with government regulations in terms of engine capacity, safety helmet, being branded and all of that.
In fact, during one of the conversations we had with a senior civil servant, he mentioned to us that we should make more investments to be able to meet the needs of commuters and Lagosians. It was based on that and other engagements that we decided to double our investments to be able to satisfy Lagosians and importantly, to help government to achieve its vision of modern motorcycle hailing services. It came as a shock to us that those conversations have been temporarily abandoned and a decision was made that completely disregarded any conversations that we had in the past.
You did not reflect the issue of N25m licencing fee for okada hailing services…
At some point in the middle of last year, a senior civil servant did talk about licencing and also threw out a figure. What is not clear to us is whether that figure had gone through the necessary approvals which we don’t think it had, to be honest. But yes, someone in government did mention N25m as a suggestion but that was never formally communicated to us, at least not any of the ride-hailing operators that we know of. So, N25m was mentioned but it wasn’t concluded at that time.
That means that you have not been paying to the government for bringing in motorcycles for your business…
Let me clarify. We did not pay any money to the government in terms of licencing as a company for motorcycle hailing because licencing regime has not been implemented yet. But we pay taxes to government as a legal entity; even our drivers do. And every driver on our platform pays over N30, 000 annually for registration and licences. Beyond that, we also pay taxes to Lagos State Inland Revenue Services and also Federal Inland Revenue Service. We also pay taxes to the unions. In fact, government played a very significant role in brokering a conversation between us – formal operators, National Union of Road Transport Workers and okada unions. So, our drivers also pay okada unions N500 per day in order to operate. There are taxes here and there that we pay but in terms of specific licencing fee, that has not been agreed yet.
With the restriction, are you considering going to other states, especially as the government said this is just a pilot scheme and that it could be extended to other councils?
Right now at MAX, we are currently operational in four states in Nigeria. We are in Kano State and we are growing very quickly in that state; we are creating about 300 jobs every single month in Kano. We are operational in Ondo State, Ogun State and in Ibadan, Oyo State. We are not just a Lagos State-based company; we are a Nigeria-focused company. We are actually a West Africa-focused company. Our mission is to solve the problem of transportation in Nigeria and across West Africa.
How much have you invested in the state?
In terms of equity investment and shareholders, MAX has put in close to $10m (about N3.6bn) in the state. And in terms of financing, things that have been done cost well over $5m (about 1.8bn) in the business that has been mobilised for providing micro loans to okada and vehicle operators in the state. We have very big plans for Nigerians as a whole and we have very big plans for Lagos as well.
You recently purchased electric motorcycles, what plans do you have for them and other bikes with the restriction?
This is a case of a responsible company that cares about the environment and we have good innovations – the first to actually introduce electric motorcycles into commercial usage in Nigeria. If this ban goes ahead and government does not relent, then we will be forced to deploy those electric motorcycles to other parts of the cities and probably other parts of Nigeria as well. It will be our joy to see Lagosians enjoy electric mobility and we are hopeful the government will reconsider its decision so that we can continue to innovate in the state.
One of the reasons given by the government for taking the action was increasing rate of accidents. They said Lagos State University Teaching Hospital recorded 1,200 accident cases in 2019 with 500 being motorcycle-related. Do you agree that okada riders ride recklessly in Lagos?
As for the statistics that were quoted by the government spokesperson, a lot of them are factual and of course, they have genuine cause for concerns. As a responsible corporate citizen and as a resident in Lagos, those statistics that were quoted are the same statistics that made us to start this business – which is that people need to move around and to move around in a way that is safe.
To give you some facts to back up the impact we have had in Lagos, in two and a half years of operating the hailing service, we have completed close to two million rides (two million trips) and out of the two million trips, we have had roughly around 100 incidents, and out of that 100, only seven of them were serious and none of them resulted in fatality.
So, if you look at our numbers, you can see that using a MAXokada is safer than entering a commercial bus in Lagos based on the statistics. We are more than capable to address the concerns that the government has genuinely raised.
It is believed that many of the reckless traditional okada riders were some of those absolved by MAX, Gokada, Opay and others. Where is the difference?
I can speak for our company, MAX, with reasonable level of assurance and Gokada as well. You will never find an untrained rider on our platform. Every rider on our platform goes through detailed security screening and customer screening. In fact, we require them to produce police reports that they have not been involved in criminal activities before they can join us.
In addition to that, we get the details of two guarantors for every rider. We take down their BVN as well and within our company, we have ex-security operatives that work with us and we make sure that every rider on our platform has proper background checks. Since we became operational, there has been no criminal report about any of our drivers, not one.
How many of your workers and riders is the restriction likely going to affect in terms of job losses?
The ban has the potential to affect up to 2,000 riders on our platform. If you look at us and Gokada for example, that number could easily go to anywhere between 4,000 and 5,000 and that is the immediate job loss. But when you look at other indirect jobs that can be lost as a result of this, that figure could skyrocket to as high as 20,000, so the impact is not trivial and that can be quite severe.
How many jobs have you created with your MAXokada initiative?
In total, we have created well over 2,000 jobs and we have through our work, activities and investment, supported well over 72,000 indirect jobs.
What motivated you to go into the business?
First and foremost, it is absolutely because of our undying love and passion for our country and for its people. Last year, Nigeria was announced as the country with the largest number of poor people in the world. Those are very shameful statistics. I felt a deep personal sense of shame when the announcement was made. Whenever I travel, meet with people or go to conferences or events, one question we keep getting is ‘what is the problem with Nigeria? Why is the country experiencing so many challenges and so much poverty?’ So for us, it is a question of genuine concern.
In fact, my co-founder and I moved back from the United States to Nigeria to start this company. And the question we sometimes get is among all the things you could have done, why okada?
We came here to create a social infrastructure that would impact as many people as possible and we found out that okada is something that could easily raise the standard of living of the people without them having to learn too many things. What we also saw from our experience internationally is that a job that you do does not have to be the job you do forever. People typically need a job to at least get to the next level. So, in the US, you can work as a delivery driver on a bicycle or even on a motorcycle and that also happens in the UK and other places. What we have done is to create a socio-economic ladder which people at the very bottom can use as their first step towards progress in life and that is one of the reasons why we started this social enterprise.
How many commercial motorcycles do you have in your fleet?
We have well over 2,000 motorcycles in our fleet.
What do you think the government should have done instead of banning okada on the affected roads?
We don’t assume to have monopoly of knowledge – nobody does. We also recognise that the work of governance is very difficult – limited resources, limited time and unlimited needs. There are cries from all sectors of the society pulling at the government over their different needs. So, we understand the predicament that the government faces but we are here to support. All we are asking from the government is to open their hands to help them help us, and help them help the people.
Would you describe the ban as a reactionary approach?
I will say the ban was implemented from a position of attempting to solve problems. Where we think the government has the opportunity to do better to regulate instead of banning, that is the area where we are available and willing to support the government. The ban has come across to a lot of us as reactionary and we still feel that this decision can be improved. We are hopeful that the government will reconsider its decision, bring in stakeholders that can help provide a lasting solution to this problem and we hope that our phones would ring very soon.
Should the government refuse to listen to your appeals, what is the next step?
If they refuse to listen to our appeals or request, we are already delivering impact in many areas and also many other regions, so I guess to the extent that government is willing to cooperate with us, we will absolutely support the government and the good people of Lagos State and we can’t do beyond what the government asks to do. We are hopeful that they will consider that and allow us to contribute towards the greater Lagos. However, of course, we are not limited in our operations only to Lagos – we operate across several states in Nigeria and we will continue to invest in other states across Nigeria.

Anjorin Abimbola Oluwaseun is the CEO of bimloaded.com.ng he is from imota Lagos Nigeria... He is a blogger and also a Dj. His stage name is Dj Bimbus

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