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AC turns luxury as petrol scarcity bites ride-hailing drivers

AC turns luxury as petrol scarcity bites ride-hailing drivers - Photo/Image

 

 

 

 

 

 

 

 

 

 

Ride-hailing drivers in Lagos, Nigeria’s commercial nerve, are increasingly turning off their air conditioners (AC) and taking on late-night rides to survive petrol scarcity and price hikes.

Bolt and Uber are considering upward reviews of prices following a 45.38 percent rise in the price of premium motor spirit (PMS), which has surged from N617 to N897 per litre officially.

The Nigerian National Petroleum Corporation (NNPC) recently announced its second fuel price hike to N897 per litre since May 2023, representing more than four times higher than N200 per litre in Muhammadu Buhari days.

In response to the initial hike, Uber and Bolt had raised their base fares by 40 percent and 17 percent, respectively.

Drivers are now anxiously awaiting for further price adjustments, but they are adopting new strategies to cut costs in the meantime.

“I couldn’t work for most of yesterday because I spent most of my time in a fuel queue and had to start working around 9 pm until past midnight,” Samuel Udoh, a Lagos-based Uber driver, said.

Udoh has stopped using his AC during trips. “I used to fill my tank for N16,500, but it cost me N26,200 yesterday (Wednesday),” he shared. “I’m expecting Uber to raise prices like before, and I hope it happens soon.”

He noted that current fare rates are no longer sustainable, and most of his earnings are consumed by fuel costs. “Look at my fuel gauge. I need to find more fuel soon, which means more lost money,” he noted.

“I used to take breaks in between rides before. I would drive until noon, go offline, and return online around 3 pm. I can’t afford that anymore,” explained Israel Osas, an Abuja-based Bolt driver.

Uche Okereke, a Lagos-based Uber driver, now asks riders to pay extra if they want the ACs on.

“I tell people to pay more now if they want the ACs,” he said. Uche avoids long fuel queues by buying fuel at more expensive stations. “I used to fill my tank for about N14, 500, but now I am spending N35,000 for half a tank,” he stated.

Uche, who needs to complete 12 rides per day as part of a car ownership contract, said that most of his Uber rides are just meant to meet this obligation, as fares no longer cover his operating costs.

“Once I complete about 10 short trips on Uber, I switch to InDrive, where I can negotiate high prices for longer rides. Yesterday, I took someone from Chevron to Okokomaiko in Lagos for N20,000 on InDrive. Two to three of those long rides help, but heavy traffic (because of fuel queues) is making it harder to complete multiple long rides each day,” he noted.

Although Uber has hinted at potential fare increases, Uche doubts any adjustment will be sufficient.

Femi Adeyemo, Bolt’s communication manager, stated that the company recently increased prices in Abuja, raising the minimum fare from N1,300 to N1,495 and the start fee from N737 to N884. He indicated that similar adjustments might follow in other cities, including Lagos, as fuel prices continue to climb.

“We have to do the analysis to ensure that the price is fair enough for drivers to make a profit and that we’re not putting too much pressure on the riders,” he said.

According to a report, Uber is reviewing the recent fuel price hikes and considering initiatives to minimise their impact on drivers’ earnings.

“Our aim is that Uber remains the app of choice for drivers while ensuring an affordable service for riders,” Tope Akinwumi, the Nigerian country manager for Uber, was quoted in the report.

When ride-hailing companies first raised their prices, the Amalgamated Union of App-Based Transport Workers of Nigeria (AUATON), which represents drivers under platforms like Bolt and Uber, expressed disappointment. They called for a 200 percent increase and a minimum fare of N2,000.

Jossy Olawale, an ex-officio and former publicity secretary of the union, told BusinessDay that the AUATON will now seek a 70 percent increase.

“The union is reviewing the situation and will demand at least a 70 percent increase in prices from the companies. Prices need to be reviewed upward. We know what this will do to passengers, but we cannot keep operating at a loss. Our members are currently overworking themselves to be able to take something home now,” he stated.

Olawale said the Federal Government’s Compressed Natural Gas (CNG) programme, intended to alleviate fuel challenges, has yet to benefit drivers.

“The government’s CNG program was supposed to provide kits for our members, and we’ve sent several letters as a union but received no response. CNG would cut drivers’ costs by about 50 percent compared to fuel,” he added.

In August, Damola Adeniran, AUATON’s national president, called for a presidential intervention to ensure that drivers benefit from the CNG conversion kits.

However, these survival adjustments might soon be countered by a declining patronage, as riders cut back on services due to high commute costs and biting inflation, which reached 33.4 percent in July 2024.

“High inflation, particularly in food prices, has eroded purchasing power, negatively impacting consumer spending – a critical driver of economic growth,” analysts at Comercio Partners Research recently noted.

“I tried booking a ride from Ogba to Eko Hotel this morning, and it was N16,000,” Olawale Adedeji, who opted instead for a Danfo ride to Obalende, recently told BusinessDay. He later attempted to book another ride to Eko Hotel from Obalende, only to see a N6,000 quotation. Ultimately, he chose a bus ride costing N500.

Others have shared similar experiences on social media.

“It was today I learnt the way to my office by bus. Yaba to Obalende – 1k. Obalende to Lekki – 1k. Lekki to inside Lekki – 200. Uber was 7900 – one way,” tweeted @dadaomolara194.

(BusinessDay)
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