In the chaotic, high-stakes mobility market of Lagos, capital is the only fuel that matters more than petrol. Yesterday, the state-backed ride-hailing platform LagRide secured a massive $100m (€95m) credit facility from United Bank for Africa (UBA), a move that signals a dramatic escalation in the city’s transport wars.
The deal, signed in Lagos, is designed to finance the acquisition of 3,500 new vehicles, transitioning drivers from the precarious “gig worker” model to asset owners over a four-year period. But for the incumbents — Uber and Bolt — this isn’t just about more cars on the road; it’s about a regulator that is increasingly acting like a competitor.
The Deal: Asset Finance Meets State Strategy
The core of the partnership is a financing vehicle that allows 3,500 drivers to bypass the prohibitive upfront costs of car ownership. According to Oliver Alawuba, UBA’s Group Managing Director, the facility will enable drivers to move from renting to owning their vehicles within four years — a direct challenge to the rental models that dominate the sector.
“This is a major step toward economic empowerment,” Alawuba said at the signing. “For passengers, this partnership translates into safer and more secure rides across Lagos routes.”
Crucially, the fleet will be comprised of Compressed Natural Gas (CNG) vehicles, supplied by CIG Motors, the assemblers of GAC cars in Nigeria. This aligns with the federal government’s push for cleaner energy but also offers a strategic operational advantage: lower fuel costs compared to the petrol-guzzling fleets of private competitors.
The Context
LagRide’s expansion comes at a time when the private sector is heavily armed. In March 2024, Moove, the African mobility fintech that serves as the primary vehicle financier for Uber in the region, raised a $100m Series B round.
That round was led by Uber itself — its first direct investment in an African startup — and included sovereign wealth fund Mubadala. With a valuation of over $750m and a presence in 13 cities, Moove is the Goliath of African mobility financing. It has deployed thousands of vehicles (including EVs) to Uber drivers, creating a symbiotic relationship that has solidified Uber’s grip on the market.
LagRide’s new $100m facility is effectively a counter-weight. By matching Moove’s raising power, the Lagos State government is signaling that it intends to compete dollar-for-dollar with Silicon Valley-backed entities.
The Squeeze: Regulator or Competitor?
The timing of this financing is impossible to ignore. In recent months, the Lagos State Ministry of Transportation has aggressively tightened regulations on private operators.
Just last August, the state mandated a comprehensive “audit” of all e-hailing vehicles, citing safety concerns and “deplorable” vehicle conditions. The Commissioner for Transportation, Oluwaseun Osiyemi, warned that “any vehicle found unsuitable will not be allowed to operate.”
Furthermore, the state has decried the “lack of robust databases” among private platforms and is enforcing stricter API integration. The government argues this is about safety and “safeguarding lives.”
However, industry insiders view this as a classic “regulatory moat.” By raising the compliance bar — demanding newer cars, stricter inspections, and data sharing — the state makes it harder for the casual Uber/Bolt driver (who often uses an aging Toyota Corolla) to operate. Simultaneously, the state offers a solution: a brand-new, state-financed LagRide vehicle that is pre-approved and compliant. So much for a government that once imposed a blanket ban on ride-hailing. In 2020, Lagos outlawed motorcycle ride-hailing, effectively dismantling OPay’s ride-hailing model overnight and grounding more than 1,000 bikes.
The “Safe” Alternative
LagRide is positioning itself as the “premium” and “safe” option in a market plagued by trust issues. “There have been concerns around insecurity in ride-hailing services in Lagos,” Alawuba noted, subtly referencing recent safety incidents on rival platforms.
Diana Chen, Chairman of LagRide and CIG Motors, emphasized that the initiative offers “structure, stability, and a clear path to success” for drivers, contrasting it with the fragmented nature of the open marketplace.
What’s Next?
For the average Lagosian commuter, the immediate impact will be more options and potentially newer, cleaner cars. But for the ecosystem, the lines are being drawn.
- For Uber/Bolt: The challenge is now twofold — competing with Moove for financing and LagRide for regulatory breathing room.
- For Drivers: The promise of ownership is alluring, but the economics of repaying a brand-new CNG vehicle over four years in a high-inflation environment remain to be tested.
As the state government mandates “mandatory license checks” and “panic buttons” for private operators, it is building a walled garden around its own fleet. In Lagos, the referee has put on a jersey and entered the game.