OPay, a fintech startup with interests in multiple industries, is launching OCar, a new ride-hailing, and ride-sharing service. This comes after it secured $120 million in funding from a group of Chinese investors.
According to the startup, the new offering will be accessible on the OPay mobile app. Cabs operating on the platform will ply routes in Abeokuta, Abuja, Benin, Kaduna, Lagos, Owerri, and Port Harcourt. However, it’s currently only available in Lagos.
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The latest move suggests that OPay fancies its chances against ride-hailing leaders, Uber and Bolt. Although this may have been in the works for a while preceding yesterday’s disclosure, the startup has no doubt been buoyed by the backing it’s gotten from East Asian venture capital firms.
Uber, the first global player in the space to launch in Nigeria, still only functions in Abuja, Lagos, and Benin. Bolt (formerly Taxify) operates in the first two cities, as well as in Ibadan, Calabar, Uyo, and Owerri. OCar’s choice of locations indicates that it wants to face off against these market leaders.
OCar will also be allowing third-party drivers on its platform, replicating a model that’s used by Bolt and Uber. This contrasts with the strategy it adopted with OBus, which involved branded commercial buses- an approach it’s recently decided to tweak.
The expansion of OPay’s suite of services in the last few months came after a $50 million investment from Chinese investors in June. That suite now includes ORide (a motorcycle hailing platform), OTrike (a similar service for tricycles), OList (an online marketplace), OLeads (a marketing vertical for SMEs), and OFood (a food delivery service).
OPay’s parent organization, Opera, also owns the Opera browser, Nigeria’s second most used internet search tool.
OCar is launching with a promotional charge: all trips that cost below ₦2,000 will be priced at a flat rate of ₦200. This subsidized pricing strategy has helped OPay grow the customer base for its other businesses, notably ORide and OFood.
Meanwhile, drivers on the OCar platform will also be paying just a 3% commission for every trip after the first twenty trips they undertake. This may lure some drivers from the existing ride-hailing companies- something that’s already played out with ORide.
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Analysts point out that these ultra-low rates are proving effective because they appeal to the Nigerian consumer. Opera may well have determined this from local consumer data that it’s mined from its browser over the past few years.
But it’s not clear how (or whether) OPay will maintain its low charges and commissions in the long term. The way it handles this part of its operations will determine its success in the next few years.
Featured image source: Techpoint Africa
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