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BREAKING: Max.ng, Gokada disclose next plan; investors in shock over ban

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Rising from a joint press conference on the recent announcement by Lagos State Government to restrict the activities of commercial motorcycle operators to only 50 routes, technology mobility startups have raised concerns over the government’s decision.

Speaking under the umbrella of  Transportation Hailing Alliance of Nigeria, THAN, the group of leading motorcycle operators presently comprised of Max.ng, Gokada and Oride, said that their investors are deeply worried over the State Government’s plan which will become effective from February 1, 2020.

Recall that ​​Lagos State Government​​ on Monday, January 27, 2020 wielded the big stick against the menace of commercial motorcycles (Okada) and tricycles (Keke NAPEP), proscribing their operations in six Local Government Areas (LGAs), nine Local Council Development Areas (LCDAs) and 10 major highways across the State with effect from February 1.

The State Government directed security operatives to embark on a total enforcement of the State’s Transport Sector Reform Law of 2018 to immediately address the chaos and disorderliness created by illegal operations of Okada and tricycle riders in restricted areas.

Besides, the Government also banned Okada and tricycles from plying 40 bridges and flyovers across the State.

Commissioner for Information and Strategy, Mr. Gbenga Omotoso, who made the announcement at the State House in Alausa, said the measures were taken by the Government in response to “scary figures” of fatal accidents recorded from operations of Okada and tricycles in the State between 2016 and 2019.

Asked what their next plans are, the startups say they are not giving up hope on convincing the Government to commence regularization of the sub-sector as against outright ban.
They stressed that the economic loss will be huge as host of investors have put in funds and thousands of direct and indirect jobs created.

MAX.ng for instance, has created 2200 direct jobs for our drivers and full-time staff and 73,000 indirect jobs.

MAX has assembled a reputable array of international partners and investors including Novastar Ventures, Alitheia Capital, Breakthrough Energy Ventures, Yamaha and Mastercard who have invested millions of dollars into the social enterprise.

Gokada has also funds led by Rise Capital, joined by Adventure Capital, IC Global Partners and Illinois-based First MidWest Group. They have over 1000 riders across Lagos State.

OPay which drives ORide raise $120 million from investors including Meituan-Dianping, GaoRong Capital, Source Code Capital.

“We have demonstrated our ability to elevate the average monthly income of a rider on our platform to more than three times what their peers in the informal sector earn, with the additional benefit of ownership of premium quality vehicles within 12 months, and a further 40% increase in their earnings once they take full possession vehicles,” the Co-Founder and CEO of Metro Africa Xpress, Max, Adetayo Bamiduro said.

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He said that the Company is fully compliant with the requirement of the Lagos State Road Traffic Regulations.

Bamiduro said that the investors are worried because in communicating the decision to restrict the operations of commercial motorcycles and tricycles in the affected areas, the government’s spokesperson cited “safety and security concerns” as the primary reasons for the decision.

In one of the video clips made available, while responding to a query on whether formalized motorcycle hailing operators are exempted from the ban, the Commissioner for Transportation remarked that “all forms of Motorcycles and Keke Napeps are banned…”

The government’s spokesperson relied on the Lagos State Transport Sector Reform Law 2018 as the legal backing for this decision.

The referenced law, Max.ng is now arguing, restricts motorcycles from operating on major highways in the state but however makes an exception for motorcycles with engine capacity above 200cc.

“This has always been a guideline for our operations and investments, as MAX has always operated in compliance with all existing laws and regulations, including compliance with engine capacity requirements. All MAX Motorcycles are 220cc engines, a 10% premium above the regulatory requirement”, he reiterated during the press conference.

“For clarity, Section 15 of the Lagos State Transport Sector Reform (Road Traffic Regulations) states that “subject to the provision of section 46 of this law, motorcycles above 200cc are exempted from the restriction on the use of motorcycles on the State highways.

Section 46 is the general provision that restricts motorcycles and tricycles from highways in the State.

Collaborating Bamiduro’s statement, the Pilot Operations Manager at Gokada, Victor Daminabo said they have self-regulated over time and currently in anticipation of Government’s regulations for the sub-sector.

According to him, THAN members are fully in support and compliant with the requirement of the Law prohibiting the operation of motorcycles without rider and passenger helmets, carrying more than one passenger, comprehensive insurance etc.

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The players also said, although no formal agreement has been signed between them and the government, however, in addition to being fully compliant with the relevant laws, they have also, in the course of constant engagements with the government, demonstrated their infrastructure and investments to address all safety and security concerns regarding the operations of motorcycles in the State.

Over 5000 riders to be affected

Max.ng also said that quality of the drivers (riders) is second to none while the Company assured drivers, investors, partners, and customers that “we are working round the clock to address this situation and would explore all lawful means to seek a redress of this injustice”.

“Take Isaiah Komolafe, a hardware engineer who repairs phones & laptops when he isn’t riding his MAX Motorcycle. He commented:

“Although I wouldn’t say I’ve lived a poor life, movement for me was hard.

Max

L-r: Safety Manager, Gokada, Anthony Igbinosun; Pilot Operations Manager, Gokada, Victor Daminabo; Co-Founder/CEO, Max.ng, Adetayo Bamiduro and CFO, Max.ng, Guy-betrand Njoya, during the press conference by THAN held today at Max Office, Lagos.

Owing to my inability to move around as often as I needed to, my business was limited to my environment which didn’t yield a lot of money. However, once I joined MAX, I realized that I could live a better life. Not only has MAX solved my mobility issues – allowing me to pick up & drop off orders, my income has also increased. Paying my bills and living my dream has become so much easier.

“My greatest joy is MAX allows me to hustle and live my dreams at the same time. I’m currently enrolled at the Confucius Institute of the University of Lagos studying Chinese, which was made possible by MAX Okada.

“MAX Okada has improved my life, and empowered me to live my dreams.”

Daminabo also hinted that to keep the riders safe physically and mentally, the Startups provide drivers with smartphones, accident insurance, two helmets, branded clothing, and first aid equipment.

“The drivers and their passengers are provided accident insurance and the drivers, in addition, have a functional HMO”, THAN said, expressing confidence that the State Government will review the ban and exempt them from the regular okada riders.

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