Lagos-based ride-sharing service Shuttlers is seeking to raise $1.5m by the end of the second quarter to expand to cities such as Abuja and Accra, CEO Damilola Olokesusi says in an interview.
The company is also planning to start running school buses in Lagos when the school year starts in September, adds Olokesusi. Shuttlers has run pilot school bus projects but implementation has been held up by Covid-19.
According to research from the Danne Institute in Lagos, eight million people struggle daily to move around in Lagos in five million vehicles on a tiny network of 9,204 roads. Households in Lagos on average spent 24% of their budget on transport, with the burden heaviest for low-income households, who spend 33%.
That doesn’t mean they get an efficient means of transport in return. An average of 264 cars per kilometre are on the roads in Lagos during rush hour, compared with the world average of 11 cars, the institute says.
Practical solutions
Olokesusi co-founded the Shuttlers service in 2015 because as a young graduate she couldn’t afford a car but public transport was too uncomfortable to use. Larger companies were able to supply buses for their employees, but there was no practical solution for many people working at small or medium-sized companies, she says.
The solution was for Shuttlers to rent buses from private bus owners.
- The bus owners weren’t interested in smaller groups or individuals – the fastest way for them to fill the bus up was to rent it out to a large company.
- Shuttlers saw an opportunity to buy the seats at wholesale prices and then sell them at retail prices on its platform.
- Its customers are a mixture of small and medium-sized companies and individuals.
- The company has sold more than 500m seats to date, and Olokesusi points to the impact in terms or reducing the number of cars on the road.
Cashless payments
The fact that the founders are female made it harder to get early funding, she says. The logistical problems faced in Lagos were daunting. Those obstacles meant that it was critical to prove quickly that Shuttlers had a profitable business model, Olokesusi says. The company is making money, with revenue above $1m in 2020.
Corporate customers can subsidise or pay for their staff through a digital wallet system. Individuals also pay digitally and then scan a barcode with their mobile phones to show they have paid. The company has never accepted cash. In addition to the driver, the buses have stewards or “bus captains”, customers who have been given a discount to perform the role.
Olokesusi says that the Covid-19 pandemic is increasing demand for the service.
- Companies are looking to cut costs and outsource as much as possible.
- “People don’t want to use public transport” and private services are seen as “more reliable” in following anti-Covid rules, she says.
- Shuttlers is also planning to start buses for women only, equipped with learning apps that will enable customers to improve their digital and financial skills.
- “Traffic time can turn to learning time,” says Olokesusi, who aims to have the buses running this year.
Bottom line
Ride-sharing is part of the solution to beating traffic in congested West African cities.
