CIG Motors is a Chinese automotive company responsible for assembling and distributing GAC vehicles in Nigeria. The company is taking over LagRide, a ride-hailing service co-developed, co-owned and backed by the Lagos State Government. According to people familiar with the matter. CIG Motors will take over the ride-hailing operational management including managing the drivers operations, fleeting oversight, platform optimization, and vehicle financing.
The takeover marks a significant shift in LagRide’s operations as CIG Motors is expected to improve the current vehicle financing system of the ride-hailing company, which has been criticized by drivers for being too expensive and difficult to repay. The existing model involves unfavorable repayment plans, making it challenging for drivers to pay off their vehicle loans. The total cost for the vehicles—either a GAC mini-SUV or a saloon car—amounts to ₦10 million ($6,541).
By "overhauling" the system, CIG Motors is trying to introduce more flexible, affordable, or driver-friendly financing options. The automotive company is also planning to replace LagRide’s drive-to-own model with a salaried employment structure. This simply means, drivers will be placed on receiving salaries per month. A driver with knowledge of the situation explained that drivers will earn a monthly salary of ₦150,000 ($98) with the salary-based employment model.
However, it's important to know that shifting from drive-to-own model to regular payroll setup eliminates drivers from claiming ownership of driven-about vehicle. Well, I can't say about the drivers that have completed their instalments or the ones that've started. But, any new driver that want to join the ride-hailing service is planned to be placed on salary-based employment structure.
It's also worth noting that the new payment model could reduce drivers' overall earnings. Under the previous system, LagRide drivers earned around ₦10,000 per day after deducting their fuel money and deducting their vehicle loan repayments. Over a month, this would amount to about ₦300,000 if they worked every day. Now, as you can see, the proposed 150,000 salary is only a fraction of what drivers take home in the previous model.
This suggests that while the new structure may provide more stability, it could also limit how much drivers can make compared to the old model. More so, CIG Motors is also intending to gradually replace LagRide's existing vehicles with electric vehicles (EVs). However, the company has not yet announced when this transition will begin or how long it will take.
CIG Motors is led by Chairwoman Diana Chen and LagRide was co-developed and co-owned LagRide Zenolynk Technologies and Lagos State Government. However, Zenolynk Technologies left the company to join Qoray, a transportation company that focuses on electric vehicle solutions.
LagRide was launched in 2021 as a state-backed alternative to traditional Lagos taxis and a lower-cost competitor to global ride-hailing platforms like inDrive, Uber, and Bolt. The platform lets drivers lease GAC vehicles through a financing plan. They start with a ₦700,000 ($458) down payment and then make daily payments for four years. In the end, the total cost for a GAC mini-SUV or saloon car adds up to ₦10 million ($6,541).
CIG Motors' Plans for LagRide After Takeover
- Overhaul of the Vehicle Financing Model.
- Full Management of LagRide Operations.
- Transition from Drive-to-Own to a Salaried Employment Structure.
- Fleet Transition to Electric Vehicles (EVs).
CIG Motors is betting that these changes will create a more sustainable and driver-friendly ride-hailing service in Lagos. What's your opinion on this matter, let's digest it in the comment section below this article.
