In a bid to revamp its asset financing model, LagRide, the ride-hailing platform supported by the Lagos state government, has successfully reclaimed 21 cars from one of its partners, Idris Shonuga. The company’s asset financing structure entails that LagRide retains ownership of vehicles until drivers complete their payment, requiring a daily payment of ₦8,900 over four years for drivers to gain ownership.
Ibile Holdings, LagRide’s parent company, expressed the need for these reforms as Shonuga had kept the 21 cars unused for six months, causing financial losses for Ibile Holdings, which had obtained the cars through a loan from Polaris Bank. Oyekanmi Elegushi, an executive director of Ibile Holdings, stated that the cars were seized due to their failure to generate income, as each vehicle was expected to remit ₦8,900 daily to LagRide.
According to Elegushi, Shonuga retained three additional cars, an action deemed criminally motivated, leading to the involvement of law enforcement. Shonuga, who owns IOS Holdings, a company recruiting drivers for LagRide, defended his position, stating that IOS assists LagRide in acquiring skilled drivers aligned with government guidelines.
Shonuga explained the presence of idle cars in his possession, attributing it to fuel scarcity, a factor that led some drivers to abandon their vehicles with him. However, ride-hailing drivers, represented by the Amalgamated Union of App-Based Transporters of Nigeria (AUATON), criticized LagRide’s asset financing model. AUATON claims that LagRide partners exploit the model to accumulate cars and demand unrealistic returns from drivers.
The controversy surrounding LagRide has reignited the discussion on the feasibility of the asset financing model in the Nigerian mobility sector. AUATON Secretary Ibrahim Ayoade believes the Lagos state government should not impose cars on e-hailing drivers. He suggests an empowerment scheme that provides grants for drivers to purchase cars rather than obligating them to a four-year repayment plan.
Ayoade emphasizes the need for LagRide to transition into an empowerment platform, providing cars to drivers instead of requiring them to make payments over a fixed period. Despite the challenges, AUATON vows to advocate for the rights of vulnerable drivers caught amid this ongoing issue.
Credit: Text excluding headline (Techcabal.com)
