Chowdeck currently delivers around 20,000 orders daily and is looking to more than double that number before the year ends, said one person with knowledge of the business. “[Chowdeck] will expand to other states in the South-South, safe regions in the North and the South-East,” that person said.

If Chowdeck hits its ambitious daily order target, it will make its ad business, even more popular. 

Chowdeck declined to comment for this story. 

Guaranty Trust, one of Nigeria’s top banks, advertised its share offering on Chowdeck’s app this week on a banner that has previously displayed ads for three other prominent brands. The food delivery company charges ₦250,000 per week for those ads, said one person familiar with the pricing. 

“[The company] can put a lot of ads up there,” said one person familiar with Chowdeck’s advertising.  If four ads are on the banner, the company can earn ₦3 million weekly without incurring additional operational expenses. The company is also working on personalising ads; “the adverts someone in Lagos will see are not the same someone in [Abuja] will see.”

Those slide–show banners aren’t Chowdeck’s only ad offering. It also offers push notifications ads that cost ₦250,000 per notification and ads on its famous brown delivery bags that cost ₦3 million for 10,000 bags, according to a rate card seen by TechCabal. 

It is unclear what the sales team, led by Kennedy Offor, has set as the revenue target for those ads. 

Finding advertisers is now part of the KPIs of the sales team, but they have not “aggressively started selling ads.”

If Chowdeck expands its ad business, it will be a boon to a startup that is also profitable after delivery, per a 2023 report. 

While the model is straightforward, the razor-thin margins of restaurant businesses mean the commissions eat into profits. 

It’s a delicate dance but restaurant owners are now familiar with the steps: pay the commission—which typically ranges from 10-30% per order—and reduce already meager profits or pass on all or part of the commission to customers who order online. 

“If I charge ₦6,000 for a plate of Abacha, I only get about ₦4,200,” said Kennedy Elobuike, a restaurant owner whose business is listed on Glovo and Chowdeck. 

Glovo and Chowdeck did not respond to a request for comments. 

“Giving away nearly one-third of the value of your food can have serious cost implications, and the potential impact has only increased with food inflation.” While Elobuike claims he doesn’t mark up his prices on the platforms, he doesn’t frown at the practice.

These markups are a key part of the delivery process, even for big restaurant chains that negotiate lower commission fees—some restaurant chains pay as little as 10%—because of their size and scale.

A pot of 8-piece chicken which costs ₦12,800 at a Chicken Republic outlet in Lagos is sold for ₦13,300 on one food app while a ‘maxi’ pot of chicken that’s available for ₦20,900 in-store is listed on another delivery app for ₦22,100.

Since restaurant customers don’t want to pay prices that reflect how expensive deliveries are, these markups are a workaround for everyone in the value chain. It’s similar to retailers adding part of the delivery fee to the cost of the item so that customers aren’t discouraged by high service fees. However, this strategy has its critics. 

“I watched my orders from Jumia Food [dwindle] from over 100 to nothing in 2021 when Glovo came in offering free delivery and later ₦250 [half of what Jumia charged at the time],” said Olamide Olaleye, the founder of ChopNowNow, a restaurant that offered free delivery for five years before it paused operations.

“Most of the users this strategy attracts are price sensitive and disloyal, Adjusting the subsidised prices to reflect the true cost of delivery will send many of them shopping where delivery is cheaper.”

Some restaurant owners stay off delivery apps despite the promise of more customers. 

“The cost of goat meat has gone so high that sometimes I sell on a ₦20,000 loss,” said one restaurant owner in Lagos who once considered onboarding on one of the delivery apps. 

“I still have to pay staff and pay rent from my sales. The commission is too expensive for me.” 

Yet it’s not all gloom. Startups like Mano that charge a flat fee of ₦1,400 have shown that there are customers who are open to paying true prices. 

“The convenience of delivery is worth it as long as the price difference between delivery and walking in is not excessive,” Pascal* who earns around ₦1 million ($600) monthly told TechCabal.

“I think that the days of marking up to offset delivery costs are behind us,” said a ghost kitchen operator who no longer marks up prices. “People who use these platforms are the exact kind of customers we are looking for, and we know we can win them over [to our food delivery platforms] with quality food.”

Ultimately, commission fees and restaurants’ margins are a universal concern. While some restaurants treat the commission as marketing costs, others prefer to pass it on to customers. Bolder delivery players will simply charge customers more and keep the clients happy. While it’s a balancing act for everyone in the value chain, the customer wants their food now or ten minutes ago when they placed the order on the app. 

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The African startup has dark stores in Lekki, Victoria Island, Ikeja, and Wuse 2, offering deliveries in 40 minutes.

With its expansion to food delivery, the self-described underdog wants to win a sizeable market share in the $936.5 million segment dominated by Chowdeck, Food Court, Glovo, and HeyFood. Bolt and Jumia exited the segment in late 2023.

Mano is taking a different approach in a market where existing players are spending big on marketing, and facing pressure to reduce their commissions.

Mano charges a flat delivery fee of ₦1,400 on all orders. While that’s more expensive than all other players, its focus on high-brow areas and the fact that it already charges similar fees for grocery deliveries means this is not a big risk.

“We want to cater to the various palates of customers—the food enthusiasts who want to try a variety of food [no matter the price], and the aspirational customer who wants quality food at a moderate price,” said Fadekemi Adefemi, Mano’s marketing manager.

The company also believes there are still many unsolved pain points in the food delivery business. “Delayed delivery, damaged food, cumbersome refund processes, are growing pain points of food delivery customers.”

To solve these problems, it will take a different approach from its current operational model. While it owns the inventory for its grocery delivery business, its food delivery business will use an aggregation model similar to Chowdeck and Glovo.

It will give Mano less control over food quality and preparation time. In their dark stores, Mano’s staff (pickers) can ensure quality by directly inspecting fresh produce and other items.  This isn’t possible with an aggregation model that relies on partner restaurants. 

Mano’s solution is to allow customers to track their orders in real-time—a feature many competitors offer. It will also only deliver within a 10km radius of its restaurant partners (at least one other food delivery service offers this option) and at the moment, it isn’t looking to add restaurants at breakneck speed. This is not a startup trying to blitzscale.

“Mano seems to be slowly building a model that is not after scale but efficiency,” said a former food delivery executive.

“[Mano] is not looking to serve everybody,” Adefemi added. “If we have 1000 customers, we want to nurture them and ensure they have all they need. 

Adefemi clarifies that this “tactical approach” is not an absence of ambition.

“We are revenue-focused, but we are a very data-driven team.” The company’s projections reportedly show revenue will grow steadily if it remains obsessed with consistently delivering quality at a steady pace.

The company declined to share specific numbers about its number of users or active users, and the gross merchandise value that its grocery delivery arm has made so far. “The business is doing well, and even our investors [whom the company has raised over $4 million from] agree that the food delivery  vertical is right and timely.”

“We say among ourselves, ‘Mano is the underdog. You won’t see us everywhere, but we are moving and even so steadily.'”

Editor’s note: This article has been updated to reflect that Mano’s delivery fee is ₦1,400, not ₦1,200 as was previously stated. It has also been updated to reflect that Mano has raised $12 million to date.

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The building, located in Jabi, Abuja, was leased to Kwik for over two years at no cost by Tive Alex Ibru, a director at the newspaper who is also a shareholder at the startup, according to documents seen by TechCabal.

However, The Guardian argued Tive was not authorised to offer the logistics startup the free use of the space.

”Until The Guardian contested my use of the office space, I had no idea that Tive was not empowered to make such decisions,” said Kwik’s co-founder and CEO, Romain Poirot-Lellig.

Kwik continued to occupy the office floors even after learning that Tive lacked the authority to make such an endowment.

“[We let him stay] because he signed a reverse contract with us and agreed to a payment plan,” Patience Illesanmi, The Guardian’s CFO told TechCabal.

“Kwik paid the rent in instalments for some time and later defaulted until its tenancy ended.” On several occasions, Poirot-Lellig requested more time to make payment and failed to.

According to Ilesanmi and a lawyer at the newspaper, the company has taken legal action against the startup.

Poirot-Lellig acknowledged The Guardian’s expectations of payment for the use of its property but refuted claims that The Guardian is taking legal actions against him or Kwik.

“The matter is between Tive and The Guardian. We assessed that we did not have to bear the consequences of his behaviour,” said Poirot-Lellig, insisting that he carried on using the offices for free as his contract with Tive stated.

A complicated agreement and another suit against Kwik

Tive gave Kwik the use of the office space in September 2021, the same period he brokered a deal for football Jay Jay Okocha to become Kwik’s brand ambassador. 

“Helping us secure Jay Jay Okocha earned him sweat equity—giving him shares in the startup even though he did not make any financial commitment,” said Poirot-Lellig.

Despite the lawsuit, Poirot-Lellig has a close relationship with the Ibru family. Lady Maiden Ibru, the newspaper’s publisher, invested in Kwik’s 2021 seed round. Poirot-Lellig claimed she will also invest in Kwik’s next funding round.

In addition to its legal issues with The Guardian, Kwik is also facing a lawsuit in Holland where its parent company, Africa Delivery Technologies, is domiciled. Adam Grant, a former consultant fired in July 2023, is demanding $200,000 compensation for unlawful termination. 

Months before he was fired, Grant claims he was promoted to lead the marketing team and was never notified of underperformance. 

“He was expensive but not meeting his KPIs,” said Poirot-Lellig, who described the lawsuit as frivolous. “He displayed anger issues and also had a disruptive relationship with the staff including making racist comments.”

Grant blamed the low acquisition of new corporate clients on tax compliance issues and delayed payments to third-party partners including delivery drivers, vendors, and other service providers.

In a 2023 company report seen by TechCabal, Kwik affirmed that delayed payments were causing rider churn and threatening Kwik’s relationship with its partners and clients.

Poirot-Lellig chalked up the delayed payments of riders, vendors, and often-time employees to the economic conditions of Nigeria but insisted that it has not affected its fleet in any way.  “We currently have over 4,000 riders on the platform. We also have 75,000 more customers today than when [Grant] was here so was the impediment him or us?”  

Poirot-Lellig who was absent at the scheduled hearing of the case in Holland claims that he has proposed a compromise to Grant which he refused.  

Miishe Addy, Jetstream Africa co-founder and chief executive, simply wanted to help small exporters and importers in Ghana send cargo abroad. But after her company commenced operations in 2019, Addy and her co-founder, Solomon Torgbor, who had led a team in the customs unit of the global shipping liner, Maersk, quickly realized that growing a logistics business in Africa meant becoming the financial partner for her customers.

For Jetstream Africa, it meant supporting small businesses with a cash advance of between $17,000 to $100,000 in asset-backed loans. The credit facility helps small exporters complete orders as international demand for quality African products grows. 

When Jetstream started operations in 2019, the hypothesis was that by grouping cargo together, they could reduce the rates each cargo owner had to pay. Miishe’s team thought that doing this would make it easier for SMEs in Ghana to ship anywhere they wanted to around the world. “We were retaining customers [but] their topline wasn’t growing and ours wasn’t either,” Addy told TechCabal. Despite Jetstream’s aggregation, it was still too expensive to sell or buy goods internationally. So the company’s early assumption that simply bundling cargo into container-sized units would reduce costs and spur export growth had to be modified after months of experimentation. “What we discovered is that it doesn’t matter how much you discount freight. If customers do not have enough liquidity to buy and sell goods, the discount is irrelevant,” Addy said in a call with TechCabal.

Unlike other regions, African exporters are forced to take more risks when they sell goods to international buyers. “Folks who are producing goods on the continent probably have the worst payment terms of any trading parties in the world. If they’re selling cargo they don’t get paid until it gets to the buyer. If they’re buying cargo they have to pay a front,” Addy said. Since the cargo moves across great distances and are been imported or exported to people who do not know each other in person. Both parties need to trust that the goods are been shipped, contain what was ordered, and that the payment will arrive when due. 

African banks hesitate to offer loans to SMEs because the typical SME customer in Africa has far fewer assets than what banks are willing to accept as collateral. 

Trade finance—an umbrella term for the different financial arrangements that are used to source for and pay short-term trade loans—is one of the oldest banking functions. According to the World Trade Organisation, as much as 90% of global trade depends on trade financing. But in Africa, the gap between the demand for and supply of trade financing continues to widen. A 2019 estimate by the African Development Bank (AfDB) put the gap at $81.8 billion, analysts say it may have now reached $120 billion a year. A joint study released in 2022 by the WTO and the International Finance Corporation (IFC) on trade finance gaps in the four largest economies of the Economic Community of West African States (ECOWAS) — Côte d’Ivoire, Ghana, Nigeria, and Senegal — claimed that raising the share of trade supported by trade finance in the four countries to the average African level of 40% would result in an extra 8% in trade flows annually. In ten years, the gains would reach $140 billion in additional trade.

Export/import logistics runs on several parallel layers. There are the practical realities of moving a shipment from its point of origin to the port, dealing with customs rules, and warehousing. There is the vagaries of dealing with shipping lines. And the exporter needs the financial muscle to pull all of this off. Said Addy: “There is no type of supply chain that is as complex as a cross-border supply chain where those three things need to not only go well, but they have to be precisely synchronized in order for a shipment to get to B.” 

What is new about Jetstream’s model is that the company wants to bring as many layers in the export/import process as possible under one umbrella. It first started to do this in Ghana when it acquired the licence to handle customs formalities and coordinate with shipping carriers. The industry term is clearing and forwarding. Sales from clearing and forwarding is a small chunk of Jetstream’s revenue, but gross margins from the segment can be as high as 90%, Miishe confided.  For customers, taking Jetstream’s money means they do not have to wait for long to get paid, and can consequently take more orders from international customers. Due to wild fluctuations in the naira’s value relative to the dollar, Jetstream does not offer its financing product in Nigeria.

Adding credit to the core business of moving goods across borders for small businesses and a growing cohort of big enterprise customers means taking on more risk. But since the company is the freight forwarder and customs agent in both countries (it recently acquired a clearing and forwarding licence in Nigeria) it also gives Jetstream Africa the opportunity to hedge its risks. Something that standalone trade financiers and merchant banks struggle with. Whenever Miishe’s company lends (typically only up to 30% of the amount required), they also get to hold 100% of the inventory in leased warehouses in addition to full control over export documents. In the case of exports, buyers make payment to Jetstream Africa which is then disbursed to the seller less loan amount, interest, and fees.

The original goal of the business remained the same. By helping small businesses buy or sell internationally, Miishe and Torgbor hoped to build a venture-scale business. But to do that they needed to take on even more responsibilities. So Jetstream had to become both a freight forwarder and financier. In mid-2021 Jetstream announced a $1 million trade finance program after raising $3 million in seed funding. According to Techpoint, the trade finance program has since reached $9 million. Jetstream Africa which disclosed an additional $13 million pre-series A funding in January 2023 hopes to raise its first growth-stage financing in 2024.

As Nigeria’s small and medium-sized enterprises (SMEs) continue to grow, contributing about 48% of the GDP, Nigerian entrepreneurs face the pressing challenge of delivering goods to customers on time and well.

The logistics challenges range from concrete problems like the absence of infrastructure to abstract ones like lack of trust, or tardiness on the part of delivery companies. Shipbubble, a logistics and e-commerce aggregation company, is solving this problem.

Co-founded by Jordan Ajibola, the CEO, and Ayodeji Abon, the CTO, Shipbubble is creating a  one-stop API integration that allows e-commerce businesses to harmonise all their logistics needs on one platform, eliminating the need for multiple logistics partners. 

The e-commerce industry is projected to reach $3.64 trillion in revenue by the end of 2023. Only $9.02 billion (0.24%) of that amount is projected to be in the Nigerian e-commerce space. With a pressing logistics problem, Nigeria may fall behind, or fail to boost revenue in the e-commerce sector.

Ajibola and Abon sat with TechCabal at our office in Lagos to demonstrate how Shipbubble works. Ajibola was quick to mention that Shipbubble is helping companies “locate the perfect logistics partners based on cost, proximity, and performance, allowing for logistics partner assignment without the hassle of text messaging”.

A 2021 World Bank report notes that the cost of moving goods (per unit distance) domestically in Nigeria is about 5.3 times higher than in the US. Meanwhile, Shipbubble claims its aggregated platform will allow traders to have options to choose from a wide range of affordable companies that have been vetted for quality service delivery by the company, cutting costs and earning trust in the process.

This is in addition to creating a tracking page for each business, allowing traders and customers to follow the goods from start to finish accurately. 

Abon says an easier way to think of what Shipbubble is doing today is to think of Paystack and other payment aggregators, and how they helped e-commerce businesses to sell faster by supporting online stores with instant accounts where payments are validated within seconds. “Shipbubble is like that, but for logistics,” he says.

Shipbubble’s 10,000 steps to expertise

Ajibola and Abon built the Minimum Viable Product (MVP) in 2021, fully transitioning from an earlier version called GetDelivery to Shipbubble by May 2022. The founders then participated in the Startup Wise Guys accelerator program from October 2022 to March 2023, further honing their expertise. Shipbubble has since secured support from angel investors and venture capitalists, including Microtraction, a venture firm that invests in pre-seed startups. As of October 2023, ₦267 million worth of products have been shipped via Shipbubble.

But they’re still far from their destination. 

One of the fundamental aspects of Shipbubble’s approach, according to Ajibola, is “helping businesses scale internationally and having more options”. To do this, they need to onboard more logistics companies internationally; this will need more time and more money. The founders are confident that their product will attract the right funding to scale and bring in more partners.

Esther Ulueme, 28, a Nigerian entrepreneur spends her nighttime tracking orders and her daytime talking to clients for her skincare and perfumery brand, leaving her little space for adequate rest and to scale. Ulueme is optimistic about Shipbubble’s solution. “Putting logistics companies under an umbrella like Shipbubble’s will keep them in check,” she tells TechCabal over WhatsApp. “You won’t have to worry much because you’re sure the logistics companies under Shipbubble would have gone through checks and won’t tamper with or lose your product.” 

Abon assures business vendors like Ulueme that “[Shipbubble’s] streamlined approach means that entrepreneurs can set up e-commerce ventures with ease with Shipbubble, and Shipbubble will handle everything from inventory management to sales and distribution.” He is confident that this approach will help small businesses scale faster with fewer resources.

Ulueme, who is keen on expanding globally, tells TechCabal that knowing that Shipbubble has logistics companies that can deliver outside Nigeria will help vendors sell internationally without stress.

One night in August, Safiya Usman, ordered a ride home on the Bolt app after meeting her friends for drinks. As soon as she got into the Toyota Corolla, the driver asked if it was a card or cash trip, to which she replied, “Card.” After asking how much the trip fare was, he informed her that he would only embark on the trip if they took it “offline”, to which she agreed as she didn’t want to spend more time waiting for another ride.

It wasn’t until the next morning that Usman realised that she had left her purse in the car, and wasn’t able to reach the driver as the trip had been cancelled. Luckily for Usman, her driver was an honest man and returned her purse the next day. But things could have ended badly, as there is no way to trace a driver if one agrees to an offline trip.

Offline trips on ride-hailing platforms like Bolt have become increasingly popular in Abuja since the fuel hike in May. Although fares were increased by about 30–40% after an extended conversation between the drivers and the company, the drivers still insist that the new prices are insufficient to cover operating costs, and have resorted to duplicitous means to avoid remitting the 25% commission to the company.

Safety concerns in Abuja make offline trips a risky venture

In the past few months, cases of “one-chance” kidnappings have been pervasive in Nigeria’s capital. These incidents are perpetrated by criminals who pose as taxi drivers to rob, kidnap or even murder unsuspecting passengers.

For a number of people in Abuja now, moving within the city comes with an added layer of fear, which they try to assuage by opting for ride-hailing apps, as opposed to buses or taxis. Riders can access the names and plate numbers of drivers, and can even share trip details with friends if they feel that they are in danger.

With offline trips, the entire safety point is defeated, according to Precious who works in a restaurant in the city. Since the news of taxi kidnappings and killings spread, she has started to use only ride-hailing apps to return home from work, even if they cost more.

“I don’t bother to use Bolt again because almost every time, the drivers request an offline trip and even go as far as emotionally blackmailing you when you refuse,” she said.“I always refuse though because I don’t see the point. The only reason I’m [opting for Bolt instead] of going to take a bus or taxi at the junction is so that I can report if anything happens or my friends know the details of my car and driver at least,” she concluded.

Lower costs for Bolt rides in Abuja raise questions about equity

Bolt rides are cheaper in Abuja than in other cities like Lagos, which is due to lower operational, regulatory, and taxational costs, according to the company. However, the price of fuel in both cities is the same, forcing drivers in Abuja to question the fairness of the situation.

“Our peers in Lagos are earning way more than us,” Austin, a bolt driver in Abuja shared as we waited for the traffic light to turn red. “I have friends there and know how much they earn per trip. Here, you do a trip of 30 minutes and Bolt charges ₦2,000, out of which I have to give them a commission. How much do you think I spend on fuel in a day?” he asked rhetorically.

According to Charles*, another Bolt driver, conducting offline trips is the only way to earn a profitable income with the ride-hailing app in Abuja.

“After buying fuel at a high rate of ₦630 per litre, and Bolt takes their 25% commission from every trip, amongst other expenses, how much do we have left?” he questioned.

According to him, certain customers willingly opt for an offline trip because they are aware that the job no longer provides adequate earnings for the drivers. However, he has also come across customers who decline offline trips due to concerns about their safety.

“Sometimes, I don’t ask. I have my way of doing it,” says David* when asked about the responses he gets from his customers after asking for an offline trip. “I can run an offline trip without you knowing and it will show on your phone that the trip is still on. Most customers don’t agree to do it because they feel unsafe, so I don’t bother asking,” David shared.

*Names have been changed to protect the identity of anonymous sources.

On Monday, the Lagos state government launched its blue line, a 27km intra-city line connecting Okokomaiko to Marina and the first light-rail system in the city. Governor Babajide Sanwoolu was one of first passengers on Monday on a light rail system that has only been partially delivered after its conception in 2008. Yet the blue line will still have to wait four weeks to be electrified while it is still in testing phase, said the Lagos Metropolitan Area Transport Authority (LAMATA). Presently, the train is pulled across its electric tracks with a diesel locomotive.

LAMATA told TechCabal that the situation is temporary. “What I don’t want us to be saying is that it is not electrified because people may want to run across the tracks,” Abimbola Akinajo, LAMATA’s Managing Director said. “The tracks are currently electrified.” 

While the blue line waits, to be electrified, the 37km red line, which is expected to be operational by the end of the year, will run on diesel. The red line stretches from Agbado to Ebute Meta and connects with the blue line at Marina. 

While the blue line will eventually have eleven stations, only five stations from Mile 2 to Marina, have been launched as phase one of the plan. Akinajo said the second phase of the blue line comprising six stations from Okokomaiko to Festac would be completed in three and a half years. “What we really want to do is add two more stations. We would include Alakija, Festac and bring that into operations in 18 months.” 

The Blue line is not open on both sides but currently operates like a monorail from Mile 2 to Marina. According to LAMATA, the both sides of the railway will work jointly once it is switched onto electric.

Passengers worry about the price point

Three passengers told TechCabal that they love the experience; the average travel time from Mile 2 to Marina is 20 minutes with a last mile provision at Marina to take you into Falomo, TBS  and Victoria Island. However the price point is still a concern. While a ticket from Marina to Mile 2 is N750, the state government is providing a 50% discount until the end of the year. Akinajo said the system must generate enough to sustain itself. “Let’s start with what we have,” Akinajo told TechCabal. “Transportation is important. When we are able to move, the economy of Lagos grows.”

In its unelectrified state, it carries a thousand passengers. The train is expected to carry 175,000 passengers daily with five stations in operation and will 500,000 passengers when the blue line is fully complete.

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In October 2022, ShapShap, an Abuja-based logistics company, won the Supernova Challenge Pitch competition at the Gulf Information Technology Exhibition (GITEX) in Dubai. The competition, one of the biggest pitch competitions in Africa, Asia and the Middle East, comes with a prize money of $8,000, which the startup used to facilitate some of its expansion plans. ShapShap, founded in 2019 by Khalil Halilu, has two offerings: a logistics app for drivers and vendors and an e-commerce app for vendors, with features ranging from delivery logistics to routing and payments. 

TechCabal spoke to Halilu about the challenges of running a logistics startup in Nigeria today and what opportunities for growth exist.

How did you come up with the idea of ShapShap?

KH: Logistics is something that moves everything. I was privileged to experience smooth logistics services while in school abroad. So when I came back to Nigeria, I thought investing in making deliveries easier was essential. There are a lot of SMEs in Nigeria, and commerce, primarily e-commerce, is thriving here. We must build a working system to enable products to move from retailers to consumers as seamlessly as possible. I saw a huge opportunity and threw my hat in the ring.

What have been some of your biggest challenges in four years of operations?

KH: I frequently tell people that I don’t envy anyone in the logistics industry because of the challenges. There are many of them, in terms of poor government policies, operational costs, and infrastructural deficits, but the biggest for us is the human element. By human element, I mean getting people to work effectively with the resources provided because that is within our control. You build a technology, and the riders use it differently or decide not to. We have riders who try to beat the system by bypassing payments, trying to get fake ratings etc. We don’t have the best work ethic here in Nigeria.

Another challenge that rocks the industry is government policies and the lack of regularisation. There are a lot of players in the industry and no clear guidelines on how to enter or operate properly. Anyone can start a logistics business, as all it takes is to buy a bike, open an Instagram page and set prices. These people you’re competing with, and the customers on the other end don’t care. They want the cheapest prices.

What is ShapShap’s strategy for improving the quality of customer experience?

KH: Our unique strategy focuses on our riders and keeping them satisfied. We value our riders because they’re the business drivers, literally and figuratively. We try to make the work attractive in terms of salary, which helps us attract quality staff. We also approach it like any other job, there are growth opportunities, and we incentivise riders with bonuses so that they know that it’s a real job with a future rather than a transit job they’re doing to pass the time.

What do you hope to see in the next few years in the logistics space?

KH: I’d like to see better policies in place. We need better policies to support entrepreneurs because few are currently on the ground. We’re dealing with the effects of the fuel subsidy removal and high exchange rates. All these repel investors from putting their money into the country because they don’t know what they will wake up to the next day.

What are the growth opportunities for ShapShap?

KH: Africa has one of the fastest-growing populations in the world. We also have a booming e-commerce market, which makes last-mile delivery crucial. A lot of upcoming e-commerce platforms are looking for fulfillment partners that are already established, to take the headache of last-mile deliveries off their hands. We have over 400 riders and have completed tens of thousands of deliveries already, so we have the background required.

We also want to collaborate with as many other logistics providers as possible. We’ve collaborated with Red Star, one of the biggest logistics companies in West Africa. We are also working on collaborating with Max to give us access to electric bikes for our riders. Collaboration is one of the fastest avenues for growth, and we don’t play with being able to leverage another organisation’s strength. We’re constantly looking for partners and companies with the same values to expand into other African cities and ride the current economic recession together.

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Governor Sheriff Oborevwori of Delta state, in south-south Nigeria, is forming a committee to explore the use of electric vehicles for mass transportation. This decision comes after the federal government removed fuel subsidies, causing the cost of fuel to almost triple. The subsidies were discontinued because they were becoming too expensive, costing the country about ₦4.3 trillion last year. As a result, transportation costs have risen, increasing commuting expenses, and forcing those who can’t afford it to walk to their destinations in various parts of the country.

Governor Oborevwori announced his intention to form the committee after test-driving two electric vehicles locally assembled by Nigerian mobility technology company, Jet Motors. He said, “The electric vehicles are cheaper; the only thing is that we are still studying this model and we are coming out with our own decision very shortly, to know whether to go in that direction, especially with the present hike in petrol price,” during the announcement.

In February, Jet Motors announced that Nigeria’s federal government, through the National Automotive Design and Development Council (NADDC), had acquired some of its electric vehicles along with their charging infrastructure. According to the Chairman of Jet Motors, Chidi Ajaere, electric vehicles are more affordable to manage. He stated, “The two biggest cost drivers for transportation are the cost of maintenance and cost of fueling but with electric vehicles you eliminate the cost of maintenance and the cost of petrol thereby reducing the cost of transportation by almost 80%.”

The day before Oborevwori’s announcement, Governor Dapo Abiodun of Ogun state, southwest Nigeria,  promised to provide electric-powered motorbikes for those who rely on them for transport. This will be “a way of easing the financial pressure orchestrated by the increase in fuel price,” he wrote in a tweet.

The country’s state governors and its federal government have also introduced palliative measures to lessen the burden of higher transportation costs. Governor Babajide Sanwo-Olu of Lagos state reduced fares of BRT buses by 50% and fares of danfo buses by 25% on all routes. Additionally, President Bola Tinubu secured approval for a ₦500 billion palliative to cushion the brunt of his economic revival measures, including the removal of fuel subsidies. Ironically, this amount is nearly equivalent to the money spent on fuel subsidies in 2019 (₦578 billion).