Moove’s $100m fund: Is Uber backing a partner or empowering drivers’ ‘oppression’?

The news is everywhere. Uber is in talks to support a significant investment in the vehicle financing company, Moove. The investment, reported to be in the region of $100 million, would value the vehicle financing company at $750 million, up from its current valuation of $650 million.

Moove is well and truly on its March towards Unicorn. You can check out that story here: Uber commits to back Moove’s $100m raise at $750m valuation

This isn’t the first coming together of Uber and Moove in Nigeria as both companies have been longtime playmates in the mobility space. Moove, a vehicle financing company, realized long ago that opening its vehicle financing business to the general public wasn’t the smartest business choice. It had, instead, targeted the e-hailing sector and for that purpose, forged a strong partnership with Uber, one of the leading e-hailing companies in the world.

Uber, on its part, only had to welcome more vehicles and more drivers, offering even cheaper options, an arrangement that remits the standard 20 per cent to its coffers. It was good business which didn’t require extra and the American ride-hailing company was only too glad to accept it, especially in a market like Nigeria where it was getting outpaced by rivals, Bolt.

This partnership led to the birth of UberGo, a ride-hailing option on the Uber app which offered cheaper options to riders. To power this option, Moove provided the vehicles; the Suzuki hatchback cars famous for their small sizes and efficient fuel conservation. The low fuel usage is the main reason behind the cheaper fares offered by UberGo. Fares are 35 per cent lower than the regular rides. 

It was a good business partnership, considering how increasingly popular UberGo has become. This popularity, of course, stems from its low prices and its vast availability in the areas they are available in.

As the economic strain on Nigerians occasioned by fuel subsidy removal, inflation and exchange rate problems continue to deepen, the option would continue to find new appeal to even more riders.

On Moove’s $100 million funding move

Even as UberGo has continued to grow in popularity, it still has several problems. The first is that because of the diminutive size of the vehicles, it isn’t desirable for people who want to commute with luggage.

The second major problem is that it is only available in select places in Lagos; Lekki, Victoria Island, Surulere, Ikoyi and recently, Ikeja. But going by its success, it is perhaps time to expand to other parts of Lagos and indeed the country.

Furthermore, with this new investment, Moove could be looking to invest in electric vehicle financing. This follows Uber’s resolve that all vehicles operating on its platform globally must be fully electric by 2040.

The e-hailing company vowed to contribute $800 million between 2000 to 2025 to help drivers switch to battery-powered vehicles, including discounts for vehicles bought or leased from partner automakers.

The need for electric vehicles is becoming increasingly imperative in Nigeria as the cost of fuel is becoming a worry for drivers in the e-hailing space. Thus, as against having fuel-efficient vehicles, Moove may be looking at having zero-fuel vehicles. This, inadvertently, means the company may also invest in car battery charging facilities across its areas of operation.

Empowering the slavers?

One all-important component of Moove’s, and by extension, UberGo’s operations in Nigeria is their drivers. Unlike regular e-hailing drivers who bring their vehicles to the platform, drivers on UberGo obtain their vehicles from Moove.

The vehicles were given on a hire-purchase arrangement. Sadly, a very small percentage of the drivers, since inception, have been able to complete payment for their vehicles. The drivers’ union leaders told me during a protest at Moove’s office, last year.

The drivers, at that time, blamed this on the policies of the company which some describe as draconian and others still, as enslavement. As one driver lamented:

“Moove Africa cannot continue with their draconian policies to keep on enslaving drivers. Do you know how many drivers have suffered a stroke? Do you know how many drivers are losing their health? Do you know how many drivers have given up their cars and are thanking God that finally they have been left off the hook?”

So what exactly about Moove operations that have its drivers feeling this way?

In an investigative piece carried out in 2022, Technext revealed that there are three overall problems bedevilling vehicle financing in Nigeria. These include price/cost, technical and geographic limitations, and finally, a method of operation that sees vehicle financing companies like Moove ascribe unfettered powers to themselves to the detriment of the drivers.

Read the report here: Is the car financing model of Moove and Lag Ride killing the gig in cab-hailing for drivers?

For pricing, the company charges N9,400 per day, according to drivers on the platform. The drivers said this roughly translates to 80 per cent of the daily average N18,000 income of the drivers. This amounts to a total of N65,800 per week. And, this is aside from personal expenses like fueling and data purchase.

To make matters worse, the driver will have to make these payments after Uber has deducted its statutory percentage commission.

Similarly, for technical and geographic limitations, drivers on Moove are limited to operating on the Uber app and in only specific locations across Lagos. Despite needing to make daily remittances, these drivers have to remain only on Uber, which boasts roughly 30-35 per cent of the e-hailing market, and in certain areas of the state, unlike their colleagues who have the freedom to move from app to app and from place to place.

At the time, Moove, in a response told me that it restricted its drivers to only the Uber app because it needed to generate productivity data that would help it provide suitable financing products to them. And, the productivity data can’t be generated if the drivers are juggling several apps.

The final challenge is the method of operation and how Moove ascribes powers to itself unchecked. For instance, Moove, in its contract, holds the prerogative to deactivate any vehicle at any time for any reason ranging from non-remittance of payments when due to no reason at all.

And if this happens, the drivers will automatically lose their initial deposit and equity along with the vehicle.

The method of demobilizing and repossessing the vehicle is another cause for worry. With the power to electronically disable the vehicle at any time, many drivers have found themselves stuck and stranded after their vehicles have been disabled without prior warning.

All these factors combined meant drivers have to work round the clock, with little rest and little regard for their health, to make all these ends meet.

Some drivers share their opinions…

In February 2023, the drivers, on the Moove and UberGo platforms took to the streets to protest what they described as injustices meted out against them by the company. The leader of the protest, Fortune Chima, would eventually be arrested.

Asked if anything has changed since then, drivers on the platform say it hasn’t as they are still operating as modern-day “slaves.”

“If this is true that they are investing 100 million to continue to enslave drivers, we will tell them that we have a vibrant union now that would oppose them to the last. It’s either they run their business on rental, or supply their vehicles strictly on an instalment basis and not bother about what app the drivers want to use to make their payment. Just because Nigerians need jobs doesn’t mean they should enslave us. Even if they invest 1 billion dollars into the economy we will oppose them until they right their policies,” a driver on the platform, Ajibola Vincent said.

“You have drivers who drive 10 hours straight for you picking all manners of trips, and yet, how much are they going home with? Because you gave them a vehicle? They are not practising HP (hire purchase) or instalment payment, no. Those guys are enslaving Nigerians. If you say you want to give that car out for instalment payment, fine, but do not restrict them to a certain app. Moove Africa can, at best, practice rental business,” another driver, Emmanuel said*,

“The Suzuki vehicles are truly efficient but that is not a reason to enslave drivers. Drivers will earn a bonus and it will go to Moove. They will have some extra earnings, which will go to Moove. And Moove will tell us it is because they are repairing the cars and servicing the cars. Their business policies are wrong,” yet another driver, Abraham said.

Another user, David who has been with the platform since 2022 said the platform isn’t that bad for anyone ready to work hard, even more than the ten hours required a day. He, however, insisted that the maintenance aspect of the company is poor and that his vehicle has been under maintenance since October 2023.

“My vehicle has been under repair since October last year. In terms of maintenance, Moove is seriously lacking because they have not been up and doing when it comes to maintenance which is the reason why Moovers (Moove drivers) get scared to take their vehicles for maintenance,” he said.

Looking ahead…

Uber’s quest to back Moove’s $100 million funding round seems like a fantastic business decision to back a long-time ally with whom they had enjoyed a measure of success. Moove certainly needs to expand into more cities, more regions, more countries, etc. And they probably have a responsibility to go green while doing so.

However, both companies must take a closer look at the concerns of their drivers upon whose shoulders their business rests else their expansion plans would seem like an expansion of the policies of ‘slavery’ which many drivers have described them with.

It is therefore important to quickly address the technical and geographic limitations of their business. While addressing the technical limitation might seem like a bad business idea for Uber, ultimately, not removing it is a deathtrap for many drivers.

Surely, there could be ways around it. It is imperative to look into their hire purchase model such that it wouldn’t seem draconian and would work for all parties involved.

See also: Moove drivers in Nigeria are protesting against unbearable working conditions