Economic importance of that ban on Okada, Keke in Lagos

Like sea waves, Lagos State government’s efforts to effect the ban on commercial motorcycles popularly known as ‘Okada’ and commercial tricycles known as ‘Keke’ in local parlance undulates. NNAMDI ABANA looks at the economic implications of the recent stunt by the governor

Former Governor Babatunde Fashola mooted the idea year ago. He banned commercial motorcyclists (those ferrying passengers) from many routes in the state. But when it seemed that the policy would impinge on the political permutations of the ruling party in the state, the caution pedal was reached. However, it reared its head again, this time pulling the tricycles along.

Commercial motorbike and tricycle operators were barred from operating in most parts of Lagos from February 1, 2020. Governor Babajide Sanwo-Olu, this time, seems not be joking. As things stand, he may not toe the path of Fashola.

The policy prohibits operators of the affected vehicles from using a number of major routes in the city. The ban does not just affect the commercial motorcyclists; the non-commercial motorbikes are also prohibited from those restricted areas. According to the state government, only company haulage bikes are allowed, and the riders must wear crash helmets.

The controversial ban stoked several protests by the motorcycle operators in parts of the state leading to a clash between them and the police.

Police Public Relations Officer, Bala Elkana, justified the use of teargas by the police during the protest at Ijora. He said the protest was violent and that the riders burned tires and attacked passers-by.

Elkana said, “Police was deployed there and they were able to restore calm. There has been no record of anyone dying.”

The ban is taking toll on commuters, as it disrupted Lagosians’ way of commuting. Many were stranded over the weekend and during rush hours as they struggled to cope with what is available – the few buses.

While residents feel the pangs of the ban, organised commercial motorcycle-hailing start-ups like Metro Africa Xpress, ORide (a subsidiary of Chinese backed OPay) and Gokada count losses, as their once-booming business eventually nosedived.

Founder of Gokada, Fahim Saleh, said the ban would serve as an accidental in the livelihood of thousands of Nigerians they had given jobs.

“The riders at Gokada are not here to make money; they are here because they have families, children and dreams (to take care of). They want to start businesses. They want to go to school. They have degrees already, but they couldn’t find jobs. For many, Gokada is not the destination (but a vehicle). It is a stepping stone to get to that next endeavour.”

“What I will tell you is that Gokada is not just a business; it’s a mission. And every part of that mission is to always be safe, provide jobs. We did things that no one else (competitors) did in the market at the time. We provided helmets that were certified by the United States Department of Transportation.”

In the same vein, Chief Executive Officer and co-founder of MAX, Adetayo Bamiduro, said, “In terms of equity investment and shareholders, MAX has put in close to $10m (about N3.6bn) in the state. In terms of financing, things that have been done cost well over $5m in the business that has been mobilised for providing microloans to Okada and vehicle operators in the state.”

He noted that the ban might affect up to 2,000 riders on MAX platform.
“If you look at us and Gokada, for example, that number could easily go anywhere between 4,000 and 5,000. That is the immediate job loss. But when you look at other indirect jobs that can be lost as a result of this, that figure could skyrocket to as high as 20,000. So the impact is not trivial; it can be quite severe,” he said.

Lagos State Commissioner for Information and Strategy, Gbenga Omotosho, while defending the controversial policy, said the ban was needed because of deaths, accidents and disorderliness caused by motorbike taxis and commercial tricycles.

“They (motorcycle-hailing start-ups) have been discovered to be part of the problem they set out to solve. Their riders are involved in accidents and breaking road rules,” Omotosho said.

Governor Sanwo-Olu responded to the public outcry by declaring that a fleet of 65 buses would be deployed along major routes in the state to provide alternative jobs for people who might have been thrown into the labour market as a result of the ban.

He cited the Lagos State Employment Trust Fund, which provides access to loans for small businesses in the city.
Another effect of the ban is the reported loss of revenue to the National Union of Road Transport Workers and other beneficiaries of the tickets bought by Okada and Keke riders.

A report had it that NURTW raked in a whopping N100m daily by levying about 17,000 registered tricycle riders and 305,000 registered commercial motorcyclists.

This policy may give the wrong signal to investors and entrepreneurs, who most likely would look away from Lagos if their investments cannot be backed by a predictable business policy.