Yango chief explains why they are not launching in Nigeria despite $150m expansion fund

E-mobility company Yango won’t launch in Nigeria anytime soon because it doesn’t have a unique value proposition to bring to market. Head of Ride-hailing Operations in Africa, Shashi Singh, disclosed this in a chat with Technext on the sidelines of the Moonshot by TechCabal.

According to Singh, Yango operates a unique e-hailing model that not only provides a technology platform for drivers to digitise their operations, but also helps them build long-term wealth. It achieves this through its fleet partner model, which means supporting fleet management companies that operate as middlemen between it and the drivers. The fleet managers aggregate the drivers, provide the cars to them, ensure they are working, and at the end of the day, it splits the revenue with the fleet managers.

This model, Singh says, won’t work in a large market like Nigeria, where there are already big players meeting the e-hailing needs of the people with different models.

“In the smaller markets, you have the same problem that you have here (Nigeria), but you have nobody serving them. Here, you already have people serving them. So what is the value proposition that you are going to bring to the table? For a user, you’re just another kind of platform. What kind of value can you bring to them? You cannot bring them short-term value. The only short-term value that you’re going to bring to them is essentially deep discounting. You know that deep discounting is not a real value proposition,” he said.

He noted that Yango’s model is built on providing long-term benefits, which would require long-term investments that will enable fleet companies to make enough money to afford to change vehicles when they need to and generally build businesses that would possibly outlast them.

​”That immediate value cannot be created in these kinds of markets. Those values are long-term values. If nobody was serving, I would have been happy to come and kind of solve that problem. But there are so many people already solving the problem, so what additional value am I going to bring in?” Singh said.

Yango’s $150 million African expansion investment

In October 2018, Dubai-headquartered Yango launched its ride-hailing service in Abidjan, Côte d’Ivoire. Eight years later, the company has expanded its business to more than 35 countries across Africa, Asia, Europe and Latin America. Africa remains the company’s largest market region, with 15 of its markets located on the continent, including Ghana, Senegal, Benin and Mauritania.

As a testament to the impressive business it was doing on the continent, Yango announced a $150 million investment to drive its expansion across Africa. The investment is mainly directed at West and Central African markets, while simultaneously eyeing smaller southern markets, including Namibia, Botswana, and Mozambique.

Asked what could put Nigeria into that picture, Singh said it would only come if they are able to attract the right kind of partnerships to drive its model.

“If there is a way to solve the problem and there is like a path in which there is a value proposition that I can bring, then there’s a possibility. There are ways in which they can be done through strategic partnerships. But those kinds of things materialise over a period of time; they cannot happen immediately. So, at this moment, we are happy to explore those kinds of partnerships. But directly trying to solve that problem with our model is not something that will create value,” he said.

He further touted taxi unions as entities they readily create strategic partnerships with, as is the case in a lot of countries the company operates in. This is because it is easier to aggregate drivers under a union, and because the unions and their members are already business-oriented and are always looking to grow their businesses.

As such, Yango is a platform that readily works with unions, unlike other platforms that would rather feud with them.

“We are the first ones that will always go to the union saying, ‘Become our taxi partner, and you can earn good money’. And that’s how we actually bring a value proposition,” Singh said.

Read also: Dubai-based Yango commits $150 million to expand into 10 new African markets