Platforms like Uber, Bolt, and inDrive have become pivotal in Nigeria’s transport system, transforming how people navigate urban spaces. These e-hailing services have enhanced mobility and generated substantial economic opportunities, contributing to the country’s growing digital economy. Despite these advancements, the industry contends with notable challenges, particularly in Regulation and operational fairness, which many stakeholders believe limit its sustainable growth and the equitable distribution of benefits. Currently, their drivers operate across 26 states in Nigeria, including the Federal Capital Territory (FCT).
Despite this widespread presence, about 15 to 17 states have introduced regulatory frameworks drivers claim are unfavourable. These state-specific regulations create inconsistencies and challenges for business operators, often leading to multiple Taxation and operational inefficiencies. Drivers further argue that the app companies primarily benefit from the existing system, dictating terms and pricing while they bear the brunt of costs and risks. On the other hand, This imbalance has fueled the demand for a unified federal regulatory framework to streamline operations and ensure fairness across the country.
Important of the federal regulatory regulations framework.
These federal regulatory frameworks as said, would provide a centralised approach to managing the sector, balancing the interests of the government, app companies, drivers, and passengers. This system would also address issues such as passenger profiling to enhance safety and mitigate the risks of Kidnapping and other Security concerns. The fragmented regulatory system has left drivers little agency over their working conditions, further exacerbating their challenges. Moreover, this industry profoundly impacts the country’s economy, particularly job creation and entrepreneurship.
Many drivers are young Nigerians who rely on these platforms as their primary source of income. This sector also reduces commuter transportation burdens and contributes to the country’s gross domestic product (GDP). However, the economic benefits are not evenly distributed. Drivers often face high platform fees, lack of occupational benefits, and limited Negotiation power. App companies, most of which are foreign-owned, reportedly repatriate significant earnings, leaving drivers with minimal financial rewards. This inequity has prompted calls for the federal government to intervene and establish regulations ensuring fair earnings distribution.
Safety concerns and the push for enhanced passenger profiling.
Furthermore, safety remains a critical issue for e-hailing drivers. Kidnappings and other security threats have plagued the industry, leading to increased calls for passenger profiling. Currently, drivers undergo thorough vetting processes, but similar measures are not consistently applied to passengers. A federal framework could mandate standardised safety protocols, including passenger identification and monitoring, thereby reducing risks and promoting stakeholder trust. Improved safety measures would also protect drivers and enhance the user experience, encouraging more people to adopt e-hailing services. This, in turn, could drive growth in the sector, benefiting all parties involved.
Also, the Amalgamated Union of App-based Transporters of Nigeria (AUATON) has advocated for a centralised regulatory framework. Recognised as a Trade Union under the Ministry of Labour and Employment and affiliated with the Nigeria Labour Congress, AUATON represents many app-based workers, including e-hailing drivers, food delivery couriers, and app-based bus passenger workers. The union’s efforts include hosting conferences to bring together stakeholders and discuss actionable solutions for the industry’s challenges. In 2024, AUATON organised a conference promoting dialogue between the government, app companies, and drivers.
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Lastly, a delicate balance must be struck between regulation and Innovation for the sector to thrive. While the government’s involvement is crucial for addressing structural inequities and safety concerns, overly strict regulations could stifle the industry’s growth and deter investment. Policymakers must adopt a collaborative approach, engaging with all parties to develop policies promoting fairness, transparency, and sustainability. A unified regulatory framework would serve as a foundation for addressing their various limitations. Also, success is still linked with the willingness of stakeholders to work together, prioritising shared goals over individual interests.