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PickMeUp Is Set To Take On Bolt And Uber In Lagos With New Funds And Strategies

Startups

July 8, 2021, 2:29 p.m.

Three years after Uber launched in Nigeria and a year after Bolt entered the ride-hailing space, a local competitor silently joined the game.

Customarily, tech companies that launch branches in Nigeria usually make Lagos state the first port of call, but Michael Okaredje had a different plan.

A native of Warri in Delta state, Okaredje had observed the challenges that people in the state faced when it came to moving from one place to another and dealing with drivers.

His close-to-home observations coupled with a deep understanding of the market terrain and consumers led to the conception of Pickmeup in November 2017 and an eventual launch of the app in January 2019.

In a virtual chat, Okaredje said that his decision to start PickMeUp was borne out of a desire to address the lack of ride-hailing services in his city of Warri, as well as the large un-serviced market in Nigeria and Africa at large.

The startup uses tech to provide drivers for people when they need to move around. Similar to any of the popular ride-hailing apps, PickMeUp lets users monitor their trips as well as complete payment on the app.

Since its launch in Warri, the ride-hailing startup has expanded to Asaba, Edo State, Rivers State, Akwa Ibom, and Imo states. However, when the covid-19 pandemic hit in 2020, the branches were closed and are slated for reopening from August this year.

Lagos is not where you test the product

Although the startup boycotted Lagos and some other states that competitors consider “ride-hailing hotspots”, this move has clearly benefitted PickMeUp. Working its way from Warri and expanding to more parts of the South East, the ride-hailing company has gained more drivers as well as customers in these places.

Last December, Bolt expanded to Warri and Asaba. However, the local competition it met on the ground already had a significant portion of market dominance and had a stronger relationship with the consumers.

Okaredje told me, “even though Bolt came to Warri, right now they are trailing behind us.”

The years of building traction in the southeast have helped PickMeUp to test its model and its product. They have also shielded the startup from much of the competition headwinds stirred up by Bolt and Uber and have allowed it to grow in ‘peace’. However, it is now looking to take on the competition itself with an imminent Lagos expansion.

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Local players in Lagos cannot withstand the competition

Lagos is home to MyKab, Bolt, inDriver, Uber, Lagos Ride, Drop, Pamdrive. Besides inDriver, Bolt, and Uber, all the other ride-hailing startups are still relatively small players.

For PickMeUp’s Okaredje, the local competition does not offer much of a competition, therefore, the company’s radar will be more on the big 2. With more than 50,000 app downloads by users and over 10,000 app downloads by drivers, Pickmeup easily dwarfs local competition not only in Lagos State but t in all Nigerian states.

However, there are still 3 major factors that can unravel its Lagos expansion plans. The first is the willingness of drivers to come on board its platform, the second is the willingness of customers to use its platform and the third is capital.

Bullish on its plans, the startup is already working on all three fronts. Recall that about 4 weeks ago, the Professional E-Hailing Drivers and Private Owners Association (PEDPA) said that it has signed an exclusive deal with 2 local ride-hailing startups in Lagos, MyKab, and Active Rides.

The terms of the deal indicate that the 17,000 members of the association in Lagos State will only offer their driving services to the two aforementioned players. However, Okaredje says the exclusive deal is more of a nomination by PEDPA and Pickmeup is already in talks with the major associations of Lagos drivers to ensure that more drivers will register with it.

For a start, the platform will only charge drivers a 10% commission on all rides. When compared to the 15% to 20% commission that Bolt charges and the 25% commission that Uber charges on all rides, PickMeUp’s commission means that drivers will keep a larger percentage of the fare.

To get Lagosians to warm up to it, Okaredje says the startup will charge 5% below what the competition charges when it launches eventually. This, coupled with discounts here and there is expected to make using Pickmeup a sweeter deal for commuters.

Funding is one of the major reasons why local competition has not gotten much traction. It is also one of the solid backbones that Uber and Bolt have in Nigeria. Therefore, any worthy competition also needs to ensure that a good amount of cash is available to fuel operations.

PickMeUp is about to close a $1.2 million round that will help it more favorably compete in Lagos and other parts of the country. The funds will be used to gain market dominance in the states where it paused operations because of covid-19. One of the long-term plans of the company is to expand into tricycle hailing and navigate the Super App lane that Opay unsuccessfully tried to tow.

A lot of planning and setting up is going on in Lagos currently for the 2-year old startup. But if anything, the willingness of its founder to try different approaches as well as its track record so far may write 2021 as a year of good growth for the ride-hailing company.

tag: ride-hailing, Uber, Transportation, bolt, startups,

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