Opay’s Ocar, the latest addition to the series of the Opera System’s ventures is set to disrupt the dominance of UBER and Bolt (Taxify) in Nigeria. OCar is designed to run as e-hailing and ride sharing services.This is coming a few weeks after Opay announced additional funding of $120 million by Chinese investors. The idea of OCar seems to have emerged to replace OBus, which is operated by in house drivers, and has seen declining patronage recently.
The latest ride hailing app was launched in November, and has hit the streets of Lagos.
OCar’s ride-hailing app is incorporated into the Opay app and can be accessed therein to order rides. The operation has started in Lagos, but will get to other seven cities soon; mainly, Abuja, Owerri, Port Harcourt, Benin, Kaduna, Abeokuta, and Ibadan.
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OCar follows the regular pattern of e-hailing companies to recruit drivers. The Opay app is downloaded from the Apple or Google store, and the applicant driver signs up, gets trained, before he could set off as an OCar driver.
The competitive e-hailing market has been dwelling on discount to woo both drivers and riders. So, OCar is operating on 15% commission for drivers as against the 25% that Uber is currently charging. Another company that charges its drivers 15% is Bolt, and the slash in the commission has pushed many drivers to embrace the app.
An excited Bolt driver said: “I can’t wait to start driving on OCar, they have 6 bonus plans.”
Opay however, has an enticing edge over other companies. The company said the 15% commission will be reduced to 3% after the driver has done 20 trips in a week. Concerning riders, the newbies are offering N200 per trip promo, for riders in Lagos, a good way to get even in the market already dominated by two giants.
Since American company Uber, and its Estonian counterpart, Bolt came to Nigeria; they have been enjoying undisrupted dominance in the e-hailing business. Other competitors like InDriver, OgaTaxi and GidiCab have not been able to upset the flexing muscle of Uber and Bolt. But it appears that Ocar is ready to change that, having the financial power and logistics needed to do that.
The success of OPay’s OFood, ORide, OList, OLeads and OTrike shows that the company has what it takes to claim a massive space in the ride-hailing market.
While OPay seems to have everything sorted out, there is still a challenge of pricing. The N200 per ride is just complementary incentive to riders in its effort to woo them; therefore, it wouldn’t last long. What happens after the promo in terms of pricing determines if riders would stick to OCar or not.
In 2016, Taxify used price slashing to loosen Uber’s grip on riders, and Uber responded by slashing the price even lower. Since then, pricing has been the major technique competitors use to win riders. But the practice has been at the loss of drivers mostly, and many of them are looking for where their interest would be protected.
Though these companies find other ways to compensate the drivers, like bonuses based on the number of trips completed at a given period of the day or weekend, it is usually unattainable, especially for drivers in Lagos due to traffic and ride requests. Riders also get bonuses depending on number of trips they make on the apps, but that too has not stopped them from complaining that the ride fare is high.
Recently, it was reported that ORide has halted all trip bonuses on its platform, following complaints from customers that the fare is high. So it goes two ways, any of the companies could halt any bonus for either drivers or riders at any time. And that’s a cause for concern especially when the trip fare is considered unfair.
The e-hailing riders and drivers have one thing in common; they mostly use all the platforms and switch to anyone with a better offer at any given time. Therefore, the competitors keep an eye on each other and are ever ready to replicate whatever is winning in the most enticing way. That means, if OCar crashes its ride fares, Uber and Bolt are likely going to do the same.
But OCar apparently has no choice; its chances to disrupt Uber and Bolt dominance lie on the number of drivers and riders on its platform. And there is no other way around it apart from dishing out irresistible offers to both drivers and riders.