By Abdulazeez Kuranga / 6th October, 2019
Curious to know about how ORide (A division of OPay) operates and generates money for themselves and Okada Riders, I decided to make use of their service from Ikeja City Mall to Iyana Ipaja Under Bridge. The purpose was to engage in a conversation with the rider on how they operate and generate money for themselves and OPay. Here is a run down of a simple analysis of Oride’s business model:
According to the Rider, they deliver N2000 per day to ORide no matter the total amount of money the riders make. For example, if in a day, a rider makes N12,000, he is entitled to N10,000 while ORide is entitled to N2,000. So even if most of the transactions the rider makes are off the application, all he just needs to do is to have N2,000 in his account to give ORide for that day. However, if a rider just joined, he will only be remiting N1,000 per day (Mondays to Fridays Alone, as Oride does not charge them for weekend rides) to Oride for the first 2 months, after which he will be remitting N2,000 for the next 10 months. After the 12 months is completed, the Motorcycle belongs to the Rider. Now, let us do some calculations on behalf of ORide: Based on the foregoing and using a case of a Rider who just joined in January, this means that the rider will only be remitting N1,000 per day from January to February. Monday to Friday is 5 days and there are 4 weeks in a month. This leaves us with 20 days in a month. Therefore, ORide receives N20,000 in January and N20,000 in Febuary, making N40,000 for the first two months.
For the remaining 10 months, ORide charges N2,000 and this translates to N40,000 per month and N400,000 for the 10 months. Therefore, in a year, ORide receives N440,000 per rider after which it gives the rider the motorcycle as his own. The price of a Baja v15 ranges between N200,000 and N230,000, and we assume a best case price scenerio of N240,000. Removing the cost price of N240,000 from the revenue ORide gets per rider in a year (N440,000), then we are left with a surplus of N200,000. As at the time of writing this article, the total number of Oride’s Riders cannot be ascertained. Therefore, the analysis can only be limited to just one rider.
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