If you live in a bustling Nigerian city like Lagos or Abuja, you know the convenience of ride-hailing services like Uber and Bolt. They're often our go-to for getting around, a lifeline when you need to skip the hassle of public transport. But recently, that convenience has come with a much steeper price tag. The culprit? Nigeria's perennial fuel scarcity and the resulting price hikes.
This isn't just about a few Naira here and there; it’s a massive economic ripple effect that touches every passenger and driver. Let’s break down exactly how empty fuel tanks are translating into emptier wallets for riders.
The Domino Effect: Why Fares Skyrocket 🚀
When fuel—or Premium Motor Spirit (PMS)—becomes scarce, it sets off a painful chain reaction:
1. The Driver's Dilemma: Rising Operating Costs
For a ride-hailing driver, fuel is the single biggest operational cost. When the official pump price shoots up, or when they're forced to buy from the more expensive "black market" just to keep working, their cost of doing business explodes.
- A trip that used to require N2,000 worth of fuel might now require N}5,000 or more.
- Drivers spend valuable time in long queues at filling stations, which is time they could have spent earning. This lost time is a direct business loss.
To simply survive and make a profit after paying for fuel, maintenance, and the platform’s commission, drivers must demand higher fares. Their current earnings are often no longer sustainable under the previous fare structure.
2. The Surge Trap: Fewer Cars, Higher Demand
Ride-hailing apps use an algorithm called surge pricing to balance the number of available drivers with the number of riders requesting trips. In times of severe fuel scarcity:
- Driver Supply Shrinks: Many drivers choose to park their cars, unwilling to face the fuel queues or accept fares that don't cover the inflated cost of fuel.
- Rider Demand Stays High: With fewer drivers on the road, the algorithm sees high demand and low supply, automatically activating the surge, sometimes increasing fares by over 100%.
What feels like an unfair price to the passenger is often the app’s mechanism trying to incentivise the remaining drivers to stay on the road, offering them a rate that makes the fuel struggle worthwhile.
You can also read How High Petrol Prices are Reshaping Car Choices in Nigeria
The Human Cost: A Push and Pull Struggle 💔
The impact of this situation is deeply human, creating a conflict between the drivers and the riders—the two most affected groups.
- Riders are Frustrated: Commuters, already battling inflation in other areas of life, are forced to pay exorbitant prices for their daily commute. Many are switching back to crowded public transport options like Danfos or BRT buses, or taking fewer non-essential trips.
- Drivers are Stretched Thin: Despite the fare increase, many drivers still feel they are losing out. They've resorted to cost-cutting measures, like turning off the air conditioning (a common complaint from riders!) or trying to negotiate fares outside the app with passengers to get a better deal. Some even opt for rival platforms that allow for rider-driver price negotiation.
In response, platforms like Bolt and Uber have often had to review and increase their base fares to provide fairer compensation for their driver-partners. However, these adjustments are often seen by drivers as too little, too late, failing to fully match the dramatic spike in fuel costs.
Seeking a Sustainable Way Forward 🌱
The ongoing crisis highlights the urgent need for long-term solutions that make ride-hailing less dependent on volatile fuel prices.
One major discussion point is the transition to Compressed Natural Gas (CNG) or Electric Vehicles (EVs). While the initial investment is high, these alternatives offer significantly lower running costs than traditional petrol engines, potentially stabilising fares for riders and ensuring better earnings for drivers.
For now, this is a tough season for everyone. Riders must budget for higher travel costs, while drivers work harder just to keep the wheels turning. The fluctuating price of fuel isn't just a number—it’s the driving force behind the daily financial strain for millions of Nigerians.