Ride-hailing platforms are considering raising ride fares as fuel prices soar to ₦897 per litre, following two months of fuel shortages in Nigeria. If they adjust fares, the platforms would need to find a middle ground that will balance the needs of drivers and passengers—a tough ask.
“We are currently conducting a comprehensive review of the recent increase in fuel prices and considering various initiatives to minimize its impact on driver earnings. Our aim is that Uber remains the app of choice for drivers while ensuring an affordable service for riders.” Tope Akinwumi, the Nigerian country manager for Uber, told TechCabal.
Drivers are already expecting ride-hailing platforms like Uber and Bolt that use algorithms to set prices to increase fares following the latest increase in fuel prices. While ride-hailing companies decide on raising fares, drivers are turning to Indrive, a ride-hailing platform that uses a bidding system that allows drivers and riders to set fares.
Bolt did not respond to a request for comments.
In the meantime, in Lagos, Nigeria’s economic capital, ride-hailing customers are facing a near-permanent surge in fares as fewer drivers operate on the road. Ride-hailing platforms typically use surge pricing to align ride fares with the often delicate balance of driver availability and rider demand.
Drivers told TechCabal they are waiting for ride-hailing companies to react to the new pump price before they hit the streets. “If I buy fuel for ₦1,200 or ₦1,500, I will probably park my car at home for like three days and wait to see what Bolt and Uber will do about the new fuel price,” a gig driver told TechCabal.
When demand exceeds supply—such as during high-demand periods or when there are insufficient drivers on the road—ride-hailing platforms apply surge pricing to incentivise drivers to get on the road.
In May, Bolt introduced a flexible pricing system, similar to Indrive’s system, allowing passengers to offer higher fares to drivers to increase their chances of getting rides during periods of high driver demand.
“I have been in the queue all day and I still don’t have fuel by 2 p.m., that automatically means that I can not work today,” a gig driver told TechCabal on Tuesday. Long queues at filling stations have led to traffic in major areas of Lagos, which drivers say may have led to the surge.
Drivers also told TechCabal that they have been in fuel queues since 4 a.m. but have yet to buy fuel because filling stations have not started selling today, leading to a scarcity of drivers working.
“There is no filling station selling fuel on the island,” a driver who asked not to be named told TechCabal. He added that he had been searching for fuel for hours but is reluctant to buy at the black market rate, which hovers above ₦1,000 per litre.
Ride-hailing platforms are in an unenviable position following Tuesday’s fuel price hike as they need to appease customers—who are spoilt with options and dealing with record inflation—and drivers—who constantly demand lower commissions and increased fares.
