Striking drivers have claimed that companies like Uber and Bolt charge excessive commissions while keeping prices low for riders, even as petrol prices increase.
On 19 April, Uber and Bolt drivers under the aegis of the Professional E-hailing Drivers and Partners Association (PEDPA) embarked on strike action in Lagos to protest inadequate pay.
The strike action was a result of the refusal of the two biggest e-hailing companies in Nigeria to review their pricing and commissions. The aggrieved drivers said the e-hailing prices did not reflect the current economic reality in Nigeria. They wanted the pricing increased and the commissions charged per ride reduced to 10%.
Uber and Bolt started operations in Nigeria in 2014 and 2016 respectively. As of 2018, Uber had about 9,000 drivers on its app in the country while Bolt has about 10,000. Uber charges drivers a commission of 25%, while Bolt charges 20%.
The two companies compete using pricing. As a result, they regularly offer promos and lower fares to get new customers. The drivers say the competition is adversely affecting their income.
“There is an increase in fuel and logistics costs,” says Miracle Ikechukwu, a Bolt driver operating in Lagos.
“They are supposed to reduce their commissions so that the drivers will not be at loss. They can’t be taking 25% and 20% when fuel was lower and still be taking the same percentages when fuel became higher.”
A tough deal, say drivers
An increase in the price of petrol at the pump to N162 ($0.39) from N143.80 per litre is at the heart of drivers’ concerns. Despite Nigeria being one of Africa’s largest oil exporters, little fuel is refined in the country and much continues to be imported. The government said in March that it had ended fuel subsidies, having announced in September it was no longer fixing pump prices.
Speaking before the strike, the national president of PEDPA, Idris Shonuga, said that after daily expenditure of N4,950 ($12) on fuel and deductions of around 3,750 ($9.10) by Uber or Bolt, drivers may be left with as little as N6,300 ($15.29) for 10-15 hours’ work. He said that in addition many of the drivers do not own the cars they use for the e-hailing business and also have to pay weekly or monthly fees to the car owners.
“It is very tough for people who are driving for others,” says Ikechukwu. “Everybody wants to get more money and considering the current situation in the country, it [commission] is supposed to be reduced so that the drivers will get more money.
“The companies should not be greedy because, without the drivers, they will not make money. The drivers are the ones making money for them and they have to consider them in any decision or policy they are making. They have to give them better packages.”
Driver welfare has become another big challenge. PEDPA has raised concerns about driver safety, demanding compensation to the families of drivers who lose their lives or are permanently disabled. Some drivers allege that while Bolt blocks drivers over even slight complaints it has been poor in handling driver complaints about riders.
“Any person can come to the platform and do whatever they want. The verification form complaints should be as accurate as possible,” says one driver.
We respect drivers, say companies
However, Bolt public relations manager Nthabiseng Mokoena says that the company values drivers on its platform and is committed to their overall social and economic welfare.
“We invest the effort to collect, track and analyse the net revenues and total expenses of drivers utilising our platform, including analysing net earnings per hour on the platform across all cities we operate in and investing in marketing incentives to boost drivers’ revenues,” she says.
She states that the company collects and tracks all other expenses incidental to ride-hailers, including vehicle leasing and instalment costs, fuel, car wash, airtime and internet bundles, adding that the analysis forms a major part of its pricing strategy in every city.
An Uber spokesperson tells African Business that the company respects drivers as valuable partners with a voice and a choice and is always open to their feedback.
“We are committed to our partnership with drivers and we will continue working to improve their experience while using Uber.”
High unemployment exacerbates problems
Some Bolt and Uber drivers use the e-hailing business as a side hustle, but due to the high unemployment rate in the country, many of the drivers have taken the job as full-time work, where the business has become their only source of income.
Figures released in March by the Nigerian Bureau of Statistics reveal that the country’s unemployment rate stood at 33.3% at the end of 2020, while the underemployment rate – those working less than 20 hours a week – was 28.8%.
Ned Nwankwo, an Uber driver, says the company may be taking advantage of the situation.
“It is supposed to be a side hustle, but because the level of unemployment in Nigeria is high, people are taking it as their main job. And if the car is not yours, you will definitely have challenges. You have to settle everybody and at some point, you are going to get frustrated in what you are doing.”
But although the drivers feel exploited, they say they cannot leave the e-hailing business.
“I feel we have no choice but to get what we are getting even though we are not happy,” says Ikechukwu.
“We want an increment,” says Ayo, another Uber driver. “Though the job is helping many unemployed graduates, they need to be paid more.”
Drivers get a raise
The protests seem to be having some effect. Three weeks after the strike, Uber announced that it would increase its fares by 13% in Lagos state to provide better earnings for driver-partners. However, there has been no review of the 25% commission it charges, which the Uber spokesperson says covers the cost of running the Uber app.
“We continue to do as much as possible to enhance the earnings potential of drivers, and leverage innovative offerings like fuel rewards and other special offers to help them. We will also continue to drive demand through promotional and marketing activities so that more people are riding with Uber,” says the spokesperson.
Mokoena says that Bolt is constantly evaluating its operations to ensure it continues to provide the best earnings for drivers on the platform.
“We genuinely believe that keeping drivers on the platform happy yields a better quality service for clients,” she says.
“Our commitment remains to treat drivers on the platform with respect, keeping an open-door policy for feedback to be provided. We will continue to advance the overall driver experience and provide drivers the support they need to succeed.”
African Business
