Afrigather SafeBoda, the Ugandan bike-hailing startup, has maintained market dominance within the enterprise in Uganda because it launched seven years in the past. It has replicated the identical stride in Nigeria because it began operations in 2020, regardless of selecting to launch in Ibadan, a slow-paced city, as an alternative of the nation’s business hub, Lagos. Now, it’s increasing its territory of operations and including a brand new vertical, car-hailing, to its service whereas at it.
This month, after weeks of beta testing throughout Nigeria and Uganda, Safeboda launched its car-hailing vertical known as Vehicles by SafeBoda to the general public. The startup had run a two-month-long beta take a look at in Kampala, the capital of Uganda, gathering suggestions and iterating the product, earlier than testing in Ibadan for every week. In response to Olaoluwa Arokoyu, Nigeria’s nation supervisor at Safeboda, who spoke to TechCabal in the course of the testing, “The product is already going by way of a collection of iterations in Uganda, and when it’s completed, we’d run a fast one in Nigeria and launch.”
Arokoyu informed TechCabal over a name that the fixed demand they acquired from their prospects gave them the conviction that, regardless of being perceived as a saturated market, there may be nonetheless sufficient house to play within the car-hailing sub-segment. “Through the years, prospects have approached us with unceasing demand for car-hailing. I’m glad that we have now lastly answered them,” he mentioned.
With this new vertical, it appears Safeboda can also be doubling down on the use instances of its cellular cash. The startup mentioned each journey on Automobile by SafeBoda can be cashless, thus eradicating the no-change headache.
“We’re very excited to launch Automobile by SafeBoda in our tremendous app with a safer, extra handy resolution than what is obtainable available in the market,” Rapa Ricky Thomson, SafeBoda co-founder and director, mentioned in a press release. “We’ve talked to drivers and passengers, examined our product, and we’re going to change transportation in Uganda perpetually, we’re going fully cashless.”
Prospects can use the SafeBoda Pockets to pay for journeys. Customers can deposit of their pockets through cellular cash, brokers, and even give money to the motive force to assist them load. This play makes the motive force double as an agent. Prospects additionally earn curiosity on any stability they’ve on their SafeBoda pockets through the Financial savings product. The pockets’s full-on performance would solely be accessible to customers in Uganda for now as a result of the pockets providing isn’t but absolutely useful in Nigeria. Nigerian customers can solely purchase airtime in the meanwhile.
For the previous seven years, SafeBoda has been pushed by the ambition to alter transportation in all of the markets it performs in, and the startup has needed to take care of a lot of market forces to maintain that ambition alive. Uber and Bolt, the world’s two greatest ride-hailing companies, have examined and challenged its dominance with their boda-boda vertical—first in Uganda then in Nigeria—however, regardless of their large fangs, couldn’t make a severe dent in SafeBoda’s market share.
The corporate has had its personal justifiable share of pitfalls. In 2020, it halted all its Kenyan operations. SafeBoda mentioned COVID-19 was the explanation for the discontinuation, however a number of precursors like low traction and the costly price of working a bike-hailing enterprise in Kenya had been possible an even bigger issue. As at when Safeboda exited Kenya, with the typical boda-boda journey costing KSh 221 ($2), hailing a automobile is comparatively cheaper than hailing a motorcycle, so customers who can afford to hail a motorcycle would relatively go for a automobile. There have been additionally the offline guys who gave the impression to be extra handy (and cheaper). To snag consumer progress, Safeboda and different gamers like UberBoda and BoltBoda showered reductions on customers, which riders complained had been consuming into their revenue margins. In consequence, riders started to reject orders in droves, and this harm the income move of the whole sub-segment for everyone. However deep-pocketed rivals like Uber and Bolt had car-hailing verticals that might simply make up for no matter they is likely to be burning on the boda-boda aspect. Safeboda solely had bikes transporting individuals and delivering items.
Now that SafeBoda is providing car-hailing, will it’s making a Kenyan comeback? We don’t suppose so. Kenya is at the moment not a simple place for ride-hailing companies to be in the meanwhile as the federal government has picked a eager curiosity in capping the utmost fee corporations can cost on rides. And the market has began reacting on this course. For example, Little mentioned it’s okay with the brand new course whereas Uber has known as the federal government to courtroom to make a case that the low charge eats into its price of operation margin. Apart from, there’s additionally nothing concrete to find out whether or not Safeboda would make such a transfer.
However judging from the corporate’s technique and response from the couple of interviews with TechCabal, it possible received’t.
For seven years, Safeboda has maintained operations in solely two international locations, constructing loyal communities and scooping market shares. At this time, it holds greater than 80% market share of the boda-boda hailing market in Uganda and Nigeria, as a result of it’s obsessive about market intelligence. When requested in regards to the firm’s growth plan, with out dismissing the opportunity of increasing into new cities, Aroyoku mentioned “There’s nonetheless extra to do in our present market. There’s an enormous alternative for progress.”
To place this in context, in response to Aroyoku, bike-hailing accounts for less than 10% of the whole two-wheeler market in Ibadan, whereas 90% of the market goes to the offline guys. Out of the ten%, Safeboda owns 9.5% whereas different gamers fiddle with the remaining 0.5%. This implies SafeBoda’s greatest competitors isn’t Uber or MaxNG, however the guys and not using a piece of tech.
Whereas SafeBoda is striving to develop its bike-hailing vertical, it now has the car-hailing aspect to fret about. Aroyoku is assured that their method, which he known as a “secret sauce”, would work magic as traditional. However this time is clearly completely different as SafeBoda received’t be enjoying defence however coming to play in a sector with two heavy market leaders.
Earlier this yr in March when SafeBoda celebrated two years of working in Nigeria, the query TechCabal requested was: Can it keep its lead in the market? Apparently, the startup wasn’t solely enthusiastic about holding its boda-boda crown, it was additionally eager on giving all people within the car-hailing territory a run for his or her cash.
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