New Ride-hailing Startup Bets on Motorcycles

A new startup is betting on motorcycles’ ability to avoid the capital’s frequent traffic congestions and is launching the first motorcycle ride-hailing platform in Ethiopia.

Available for Android phones, for now, the two-wheeled ride-hailing platform by Addis Motor Taxi is backed with a call center, 9530. Providing package delivery services besides ride-hailing, the startup has already signed up 1000 drivers to its platform that was developed locally. 

Unofficial sources state close to 50,000 cars are working under several ride-hailing platforms in the city. But Addis Motor Taxi says it’s going after a different market.

“Nipping in and out of tight spots, the use of motorcycles as taxies has been a subculture in some professions. People even leave their car parked at places like Megenagna and Merkato and hop on motors to get to their destinations faster,” said Fuad Abdella, Founder & CEO of Addis Motor Taxi.

This practice has been informal with negotiations setting the fares. In addition, people didn’t have easy access to these services whenever they wanted them. Addis Motor believes it can standardize the service the way RIDE set the rules for shared car transportation in the city.

Offering solutions for faster transport, Addis Motor Taxi charges passengers 12 birr per kilometer with a flag down fee of 75 birr. The startup charges a 10 pc commission for now and plans to bring down its cut as the business takes off.

The 25-year-old entrepreneur with multiple past ventures says he stumbled upon the idea while working at a previous firm he co-founded, a software development firm called Sila.

“One of the projects Sila was involved in at the time was delivery service. Covering only one neighborhood, Jemo, we delivered food to condominiums using Motorcycles. That’s when I realized there was a greater demand for mobility using motors,” he adds. 

Fuad, who holds a Business Administration degree from Wuhan Technology University, departed Sila and went on to found Addis Motor as the rest of the team at Sila didn’t share his views, he tells Shega. Fuad bootstrapped his startup starting operations at the end of last year and has now 17 employees.  

“There is a huge market for motorcycles that is ignored. A lot of people opt for motorcycles for mobility in certain circumstances. We are here for them,” Fuad stated. 

Motorbikes have been common in Ethiopia’s delivery business. But their usage in ride-hailing platforms is new, despite the practice being popular in other parts of Africa and Asia.

The Uganda-based, SafeBoda and the Indonesian ride-hailing unicorn Gojek are some of the motorbike ride-sharing platforms that have dominated their respective markets and expanded to new countries.

Big names of ride-hailing services such as Uber, Bolt, and Glovo are also eyeing their market share and have decided to test out their two-wheel ride-hailing ambitions in selected countries.

Mixed Feelings Surround Motorcycles use in Addis 

Data from the Federal Transport Minister shows there were around 250,000 motorcycles in the country in 2021. In the capital, motorcycles are growing at a rate higher than the growth rate of vehicles, and there are around 28,000 motorcycles in Addis.

Alarmed by the increasing number of motorcycles, their corresponding traffic violations, and the rising crime and lawlessness of motorcycle drivers, the Addis Ababa City Administration had banned motorcycles from Addis streets in 2019.

The rules were later relaxed, with motorcycles being allowed with a mandatory GPS installation and other permit requirements. Another requirement was set by the city’s transport bureau in 2022, which banned motorcyclists from carrying pillion passengers while riding.

Fuad shares this concern of the city and says Addis Motor Taxi’s main priority is securing the safety of its platform. But he says these laws had a little effect in changing the status quo in Addis as Motor cycle drivers find various ways to bypass these laws. He says Addis Motor Taxi is relying on its own safety protocols. 

“After months of negotiations, the city’s transport authority is set to allow two-wheeled ride-hailing platforms to carry passengers while keeping the general ban in place. For now, we are only providing package delivery services” he adds.

Addis Motor taxi works with motorcycles with code 3 plates that are part of associations. The startup says it’s also licensed by the Addis Abeba Transport Bureau as a legal meter taxi service provider.

“All the motorcycles that join our platform undergo screening and are required to pass some requirements. In addition, we are working with Addis Ababa Police Commission, and we check criminal background,” Fuad told Shega. 

Addis Motor Taxi’s drivers will not be allowed to carry more than one pillion passengers who must also wear a helmet.

“We are also working on installing our own tracking GPS on the motorcycles,” he added. 

While the startup is working on the IOS version, it says it plans to expand to regional cities after it tastes the water in Addis.