Can Motorbike Taxis Fix Africa’s E-commerce Problem?
WHY YOU SHOULD CARE
The continent’s poor connectivity has deterred even Amazon from entering the e-commerce market there. Motorbike apps are trying to fix that.
By Anne Kidmose
- They’re often the only solution to the chaotic traffic plaguing the continent’s biggest cities.
- Motorbike taxis may prove to bridge the logistical chasms that have held even giants like Amazon back from e-commerce in Africa.
Running late for a job interview or about to miss a flight? In many African cities, the solution is right around the corner, where readily available motorcycle taxis will take you almost anywhere in a matter of minutes. Prized for their efficiency — and dreaded for their overconfident drivers — these taxis are an essential part of mobility on the continent.
Tech entrepreneurs have been taking note of the efficiency and popularity of the two-wheelers. In the past five years, motorcycle-hailing apps have sprung up across Africa, competing to be the most popular “Uber for motorcycles.” In Uganda, SafeBoda has made a name for itself as a hassle-free alternative to the informal motorcycle taxis, while in West Africa, Max.ng, a Nigerian company, is about to scale up operations. And in Rwanda, Ampersand is introducing a fleet of electric motorcycle taxis.
Motorcycle taxi service providers are beginning to branch out from ferrying passengers to delivering products, tapping into Africa’s emerging e-commerce market. Inadequate infrastructure — coupled with limited and expensive internet connectivity — has long hobbled Africa’s e-commerce ambitions, so much so that Amazon doesn’t offer e-commerce services on the continent, even though it has tech hubs there.
[Pivoting to deliveries] has helped us through the pandemic and has grown to become one of our biggest services.
Ricky Rapa Thomson, co-founder, SafeBoda
The companies behind the motorcycle taxi apps believe they can overcome those limitations. And the pandemic has sped up this transition, according to industry analyst and former venture capitalist Osarumen Osamuyi.
“COVID-19 was an accelerator for many of the existing trends in the industry,” says Osamuyi, who is based between Lagos and Nairobi. “Delivery became bigger as the pandemic forced people to have things delivered.”
While transporting people remains the main source of business for a majority of the motorcycle taxi firms, deliveries of food and other online goods is “the goal for many of these companies,” Osamuyi says.
SafeBoda launched its food delivery service, SafeBoda Food, in 2019, and in April 2020 it partnered with the U.N. Capital Development Fund to provide an e-commerce platform for fresh produce. Initially, the SafeBoda Shop app connected 800 market vendors in the capital Kampala to households; it has since expanded to delivering everything from cooking oil to sanitary napkins. The company provides market vendors with smartphones so that cashless payments can be made through its mobile wallet.
Even though customers have slowly begun venturing outside their homes, deliveries are here to stay, says SafeBoda co-founder Ricky Rapa Thomson.
When the pandemic first hit, the future of business was considerably less certain. “The pandemic presented us with a very difficult situation,” says Thomson. Transporting people became illegal due to social distancing requirements, so Thomson and his partners had to come up with a creative solution, and they had to do it fast. Putting drivers to work as deliverymen did the trick. “It has helped us through the pandemic and has grown to become one of our biggest services,” Thomson says.
Commuters in Nigeria have also seen some of the country’s most popular motorcycle taxi apps pivot from passengers to deliveries. The trend has been influenced by the decision last year by authorities to ban motorcycle taxis, known as okadas, in Lagos. Major players on the motorcycle e-hailing scene, like Gokada, shifted their focus to deliveries. Today, Gokada claims to be the largest last-mile delivery service in Nigeria.
According to Guy-Bertrand Njoya, chief financial officer at Max.ng — one of Gokada’s main competitors — deliveries and passenger transportation are two sides of the same coin.
“We have an agnostic approach to delivery, be it people or goods,” he says. Max.ng started as a last-mile delivery service supporting large e-commerce players and later took on passenger transportation. Still, Njoya prefers to use the term “mobility company” to describe the business, as it underscores the company’s aim to solve infrastructure needs across the continent.
Those gaps in infrastructure are at the heart of mobility challenges in Africa — for people and for goods.
“Traffic jams make us popular,” says Zaharan Kweka, who earns a living as a motorcycle taxi driver in Dar es Salaam, Tanzania’s largest city. The 25-year-old is one of millions of informally employed drivers in sub-Saharan Africa who make up the backbone of an industry that has an estimated worth of $80 billion. Kweka says that his motorcycle taxi can complete a journey from Dar es Salaam’s suburbs to its bustling center four times faster than a traditional taxi or bus.
When it comes to e-commerce, Southeast Asia’s internet economy is the fastest-growing online market globally, with Africa trailing behind. Still, things on the continent are moving. According to the U.N. Conference on Trade and Development, the number of online shoppers in Africa has grown by 18 percent annually since 2014.
Motorcycle e-hailing companies have the capacity to boost the African e-commerce industry, says Osamuyi, if they stick to deliveries and facilitate online shopping, much like Indonesian super app Gojek. The Jakarta-based company started out with 20 motorcycle taxis in 2009; today it’s an on-demand service for everything from car washing to manicures, connecting customers and merchants.
“I think individual merchants will be successful in Africa, and the platforms that enable online shopping of their items will be successful,” says Osamuyi.
SafeBoda’s Thomson already sounds victorious when he speaks of the future. “The market in Africa is huge … nothing can stop us,” he says with the confidence of a speedway driver about to step on the accelerator.
- Anne Kidmose, OZY Author Contact Anne Kidmose