Lagos state ride hailing regulation to take effect from August 20

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Hello there,

Welcome to TC Daily! In today’s digest: Uber’s Q2 2020 report is out and Deliveries are saving the day; Lagos State fixes date for new ride hailing regulation to take effect and some funding news from Egypt and South Africa.

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Uber has released its Q2 2020 financials
and the numbers are providing even more insight into what havoc the last few months of lockdowns and social distancing has wrecked on the global ride-hailing economy.

Gross ride bookings were down 73% in Q2 2020 compared to Q2 2019.
Compared to Q1 2020 when gross ride bookings were down 80% from Q1 2019, the resumption of movement and reopening of businesses increased ride hailing activity although the trends have varied for different locations. For instance, volumes in Hong Kong and New Zealand are almost back to pre-COVID levels while parts of Asia are on their way back up. While analysts at Refinitiv projected a US$2.18 billion revenue during the period ending June 2020, the company’s revenue stood at US$2.24 billon (down 29% from last year, however) thanks to its Eats business and pivot into deliveries.

In April, Uber launched two new delivery services Connect and Direct to move items from one place to the other buoyed by renewed interest and activity in the e-commerce space across the globe. But Uber Eats has grown at an unprecedented rate (gross bookings on Eats increased by 113%), according to CEO Dara Khosrowshahi, and is now at a US$30 billion plus run rate three years in. For context, in 2017, the Rides business was at US$30 billion run rate eight years after it launched.

Uber has tried its hands at logistics before now. But its earlier attempt, Uber Rush, fizzled out without really taking hold. But with the opportunity the pandemic has presented, the rapid growth of its delivery services (Eats, Connect and Direct) and
Postmates/Cornershop acquisitions, it seems to be geared towards giving the logistics space another dogged try.


Kenya’s Twiga Foods is temporarily shelving plans
to expand into West Africa and focusing on expanding further in its current East African location, CEO Peter Njonjo says. The company is seeking new funding to make this happen. Travel restrictions as a result of the coronavirus pandemic has affected plans the company had announced in 2019 to expand into West Africa.

Twiga Foods launched in 2014 to create an effective supply chain of farm produce to retailers reducing post-harvest losses and ultimately enhancing food security. Although its activities have continued even with Kenya’s strict lockdown measures, inter-state travel restrictions will now delay its plans to venture out into the west. Njonjo says the company will focus on launching in Kenya’s third largest city, Kisumu, next month and about three more before the end of the year.

Movement restrictions have presented the most challenge to agritech startups across the continent as they work to keep food supply going during this period. Companies that focused on the farming process (provision of supplies like fertilisers, monitoring farm activities) have had to pivot into helping farmers find new ways to access markets to sell off their produce. Decline in restaurant activities have also been detrimental as has a change in demand from consumers impacting what produce formal retailers now have a preference for.


Egyptian fintech startup ElGameya has raised a six-figure
pre-seed round according to reports from MENAbytes. The investment was led by AUC Angels and joined by Cairo Angels and Alex Angels. ElGameya is a savings
platform that allows users save in money circles. Also known as thrift contributions, members of a circle deposit a fixed amount into a purse at an agreed interval with individuals collecting the collective sum after a period of time in turns. After the members of a circle have taken turns to collect a payout, the cycle start again. Founded in 2017, ElGameya plans to grow its user base with the new investment and complete 1,000 savings cycles next year.

In more funding news, South African healthtech startup Guidepost has raised an undisclosed amount of funding to further grow its impact in the diabetes management segment. The platform helps diabetics better manage the risks associated with the disease as well as collaborates with healthcare providers and insurers to manage patients and cost implications of diabetes. Guidepost launched in 2014. The funding came from Rand Merchant Investment Holdings (RMI) through AlphaCode, its incubator/accelerator and investment venture as well as Endeavor.


Come August 20, Guideline for On-Line Hailing Business Operation of Taxi in
will come into effect. It is the Lagos State government’s approach towards regulating the ride-hailing sector in the commercial city and has been the cause of concern since last year when its existence was first hinted at. Both motorcycle and taxi operators have been at regulatory loggerheads with the state government since 2018. In January, the state government announced the ban of motorcycles, including the tech-enabled operators, from major areas in the state to the outrage of users and the operators. There was a peaceful march afterwards to protest the ruling. As was speculated then, the law now mandates operators to acquire a provisional license at N10 million (about US$26,000) per 1,000 vehicles or less; N25 million (US$65,000) for a fleet above 1,000 and renew annually at N5 million and N10 million respectively. The state government is also asking for a 10% service tax on every ride the operators complete.


Boiling Ocean

Circa 2009, I walked into New Horizons’ office in Ikeja, the capital of Lagos, Nigeria’s major commercial city. I was a Computer Science undergraduate who was still figuring out what to do after school. New Horizons was one of the few, leading technical training institutes in the country at the time. I wanted to inquire about the available programming courses and their prices.

Programming courses in Java, C# were quite popular in those days and
apart from schools, institutes like New Horizons were the few places to take such courses. Although you could buy a CD with tutorial videos on the roadside. The internet was quite frankly a luxury for many people. One of the first training institutes in the country, NIIT, opened its doors in 1999. It was about the same time that the famous computer village opened.

If quality programmers are scarce today, imagine how few they were 11 years ago. Many of those who had coding skills mostly hoarded it and made a profit from it. The difference was that the demand wasn’t as high then. However, one major thing that has changed today is that coding and other technical skill courses are available to almost anyone. There are at least 25 key
players in Nigeria’s technical talent industry today providing training ranging from data science to software support.

While some of the challenges present 11 years ago such as lack of infrastructure and talent scarcity still exist today, it is not because new developers and technical talent are not being minted faster than before. The industry today is battling new problems; global competition for skilled developers being one.

Alexa, play me JAPA

Read our 2-part technical talent series created in partnership with Tek Experts

here and here. Get TechCabal reports and send us your custom research requests here.


That’s all for today,

Have a great week, we’ll be back tomorrow.
– Kay

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