Rising vehicle operating costs, financing obligations and pressure on passenger affordability are making it increasingly difficult for Nigeria’s ride-hailing operators to keep fares affordable while ensuring drivers earn enough to sustain their work.
Teddy Appa-Dankyi, Senior General Manager for Bolt West Africa, and Mildred Ekanem, Executive Director of LagRide, told Nairametrics this while discussing the sustainability of Nigeria’s ride-hailing economy following the exits of Uber and Moove.
They explained that the economics of running mobility services depend on how well operators balance the cost of keeping vehicles operational with passenger demand and drivers’ earning opportunities.
Uber discontinued its Nigerian operations on September 2, 2026, after 12 years in the market, while Moove announced on October 8 that it would wind down its Nigerian business, six years after launching in Lagos.
High operating costs challenge mobility operators
Ekanem told Nairametrics that running a technology-enabled mobility business requires more than building an application and connecting passengers with drivers.
- “Running a technology-enabled mobility business in Lagos requires much more than building an application and connecting passengers with drivers,” she said.
- “The real challenge is creating a sustainable transportation ecosystem in an environment characterised by high financing costs, fluctuating energy prices, infrastructure limitations and significant pressure on consumer purchasing power,” she added.
Ekanem said vehicle acquisition and financing remain major cost considerations because operators must generate enough revenue to cover these expenses while keeping rides affordable.
- “Vehicle acquisition and financing remain among the biggest cost considerations,” she said.
- “The greatest challenge is achieving the right balance between vehicle acquisition costs, financing, daily utilisation and passenger affordability. A sustainable mobility business must optimise all four rather than simply increase fares.”
The underlying challenge is that ride-hailing depends on physical assets that must keep generating revenue. Vehicles need fuel, maintenance and insurance, while drivers must earn enough to cover their expenses and, where applicable, meet financing or rental payments.
Rising expenses squeeze ride-hailing drivers
Drivers must cover fuel, maintenance, insurance and other vehicle expenses from the revenue they generate. Those who rent or finance their vehicles also face regular payment obligations, making their earnings vulnerable when operating costs rise or trip demand weakens.
Appa-Dankyi told Nairametrics that these pressures affect drivers and platforms while also limiting what passengers can afford to pay.
- “Nigeria’s ride-hailing industry operates within a dynamic economic environment, where fuel prices, vehicle maintenance, insurance, financing costs and general inflation affect both drivers and platforms,” he said.
- “These pressures also influence consumers’ purchasing power and their ability to absorb changes in transport costs,” he added.
Appa-Dankyi said the cost of keeping a vehicle operational directly affects what drivers retain, although their expenses and earnings vary by vehicle, location and working hours.
- “For driver-partners, the cost of keeping a vehicle operational is a significant consideration in determining how much they earn from their activity on the platform,” he said.
- “Fuel, servicing, insurance, financing and depreciation all affect what a driver ultimately retains, and these costs can vary considerably depending on the vehicle, location, distance travelled and hours spent on the platform.”
Bolt said its pricing considers market conditions while balancing affordable fares with opportunities for drivers to earn.
- “Our approach to pricing considers prevailing market conditions and trip dynamics, while balancing rider affordability with the need to support driver-partners’ earning opportunities,” Appa-Dankyi said.
- “Earnings differ from one driver to another depending on factors such as demand, operating hours and individual vehicle expenses.”
Vehicle financing makes utilisation critical
Vehicle financing adds another layer of risk because drivers who rent or finance their cars must meet payment obligations even when the vehicles are not generating revenue.
For financing companies, the returns on each vehicle depend on its availability, utilisation and ability to earn enough to cover operating costs.
Ekanem said fleet operators must ensure that each vehicle generates sufficient revenue to meet its obligations while allowing drivers to earn a reasonable income.
- “Each vehicle must generate sufficient revenue to support its operating obligations, including financing, maintenance, insurance and other associated expenses, while allowing the Captain to earn a reasonable income,” she said.
She said vehicle downtime can weaken these economics because expenses continue even when a vehicle is unavailable for trips.
- “Vehicle downtime is one of the biggest risks in fleet-based mobility operations because a vehicle that is not generating revenue may still be accumulating costs,” Ekanem said.
- “Financing obligations, insurance, depreciation and other fixed expenses do not automatically disappear because a vehicle is temporarily unavailable.”
Ekanem said lower utilisation can put pressure on drivers and fleet operators, making preventive maintenance and effective vehicle management essential.
- “Lower utilisation can reduce the income available to meet operating obligations and place pressure on both the Captain and the wider fleet economics,” she said. “The response must therefore be operational as well as financial.”
Ekanem said LagRide’s approach is to manage vehicles as productive assets throughout their operational lives rather than treating them simply as cars available for bookings.
- “We believe that preventing avoidable problems is significantly more effective than constantly responding to emergencies,” Ekanem said.
- “Our approach is to manage the vehicle as a productive economic asset throughout its operational life, not simply as a car available for bookings on an application.”
Different fleet models carry different risks
Ride-hailing companies also face different risks depending on how they obtain vehicles. Asset-light platforms rely largely on drivers or third-party fleet owners to finance and maintain vehicles, while structured fleet models take on more responsibility for vehicle access, utilisation and operational oversight.
Ekanem said each approach has different demands, and its sustainability depends on how well it fits Nigeria’s market conditions.
- “An asset-light ride-hailing platform can expand relatively quickly because individual drivers or third-party fleet owners bear much of the responsibility for vehicle acquisition and maintenance,” she said.
- “A more structured fleet ecosystem requires greater coordination, stronger operational oversight and disciplined management of vehicle financing and utilisation,” she added.
She said a company’s nationality alone does not determine whether its model can succeed in Nigeria.
- “The question is not whether a mobility company is local or international,” Ekanem said. “It is whether its operating model genuinely addresses the economic realities of the market in which it operates.”
The distinction matters because an asset-light model can limit a platform’s direct exposure to vehicle financing, but it does not remove the financial pressures facing drivers and fleet owners.
A structured model can offer more oversight and support, but it must manage the cost and productivity of the vehicles under its control.
Fuel costs and platform commissions squeeze driver earnings
Rising fuel prices and platform deductions are putting pressure on ride-hailing drivers’ earnings, while operators must keep fares affordable for passengers.
Nairametrics previously reported that petrol prices in Lagos rose from about N800 per litre at the end of February 2026 to between N1,300 and N1,330 by mid-April, an increase of more than 60%.
For platforms, increasing fares to offset higher costs risks making rides less affordable. Bolt said its pricing decisions must account for this tension between passenger demand and driver earnings.
- “Riders remain sensitive to fares, making it important to balance affordability with the need to support sustainable driver earnings,” Appa-Dankyi told Nairametrics.
The pressure is not limited to fuel. Drivers also have to account for servicing, repairs, insurance and depreciation, while those operating financed or rented vehicles must meet their payment obligations regardless of how much they earn on a particular day.
Platform commissions have become another point of disagreement between drivers and ride-hailing companies. Drivers argue that deductions reduce their earnings, while platforms must fund the technology, customer support and safety systems needed to operate.
Nairametrics’ earlier reporting, based on driver accounts, put deductions at around 25% for Uber and Bolt and 12% to 15% for inDrive. Bolt has stated that its commission is 20% in Lagos and 21% in Abuja, disputing claims that it charges 30%.
These figures are not directly comparable because total deductions may include taxes and other charges.
AUATON has called for a 10% commission cap and fare reviews. Its four-day shutdown ended on October 16, with the union directing drivers to resume normal operations.
The disagreement reflects the competing interests within the business. Drivers want enough income left after deductions and expenses, while platforms must maintain a service that attracts passengers and covers their own operating costs.
Why Uber’s exit mattered for Moove
An analysis by ride-hailing data aggregator Obi examined 20,298 Uber and inDrive rides involving 308 drivers between January and July 2026.
- It found that Uber paid drivers more than passengers were charged on some shorter trips, with the gap reaching 23% for trips covering 5km to 9km. Uber drivers in the Nigerian sample averaged 130 rides over seven months, compared with 1,142 for Uber drivers in South Africa.
- Moove said Uber’s departure materially changed the operating environment for its Nigerian business. The vehicle-financing company announced its Nigerian wind-down on October 8, saying that, after assessing its options, it could not sustain its operating model.
- Moove said more than 9,000 Nigerian customers had used its products and that vehicles financed through its business generated N57 billion in revenue. Under its wind-down arrangements, eligible customers were to receive vehicles worth about N35 billion without further payments for those vehicles.
The developments highlight the pressures facing connected parts of the mobility economy: ride-hailing platforms need sustainable trip economics, while vehicle-financing businesses depend on drivers generating enough income to meet operating costs and repayment obligations.
The exits expose risks, not a failed market
Uber’s departure and Moove’s wind-down expose risks across connected parts of Nigeria’s ride-hailing economy, but they do not establish that the entire sector is unviable.
Bolt reported a 92% week-on-week increase in driver registrations after Uber’s exit. The company said the increase reflected interest in its platform, but registrations alone do not establish how many drivers became active, how many trips they completed or whether their earnings were sustainable.
Ekanem said LagRide had observed increased interest from drivers and passengers but cautioned against attributing all of it to competing companies’ exits. She said the company monitored driver enquiries, onboarding, passenger bookings and fleet deployment, but did not provide figures to quantify the changes.
She said a sustainable mobility ecosystem must also provide decent earning opportunities, maintain vehicles properly and earn passengers’ trust.
- “A mobility ecosystem cannot be sustainable if its drivers cannot earn a decent living, its vehicles are not properly maintained or its passengers cannot trust the service,” she said.
The evidence suggests that Uber’s exit created opportunities for remaining operators to attract drivers and passengers.
But capturing that demand is not the same as proving that a business model can generate sustainable returns over time.