Nigerian based startup Opay has launched a new ride-hailing service “OCar”, giving Uber and Bolt a run for Nairas.
The car-hailing service comes a day after the company raised $120 million in Series B funding.
The new service will complement its vast portfolio, with existing services such as classifieds, bus-hailing, and food delivery. Opay’e ecosystem consists of OFood (food delivery), ORide (bike-hailing), OList (classifieds), OTrike (hailing three-wheelers), and OBus (bus-hailing).
The new service will be available in cities like Lagos, Owerri, Ibadan, Port Harcout, Abuja, Benin, Abeokuta and Kaduna.
Opay’s super-app approach mirrors one of the strategies adopted by Meituan-Dianping, one of its investors.
The Series B investor runs a Chinese super app that allows users a similar range of services. As a result, the app dominates up to 40% of China’s food delivery services.
OCar Muscling its way Through Low Prices
The company seems to adopt an entry strategy similar to Bolt, offering massive discounts upon entry. For instance, a tweet sites that OCar will charge approximately (200 nairas) $0.55 for every ride. While this entry price point might attract a flood of customers from competitors, the sustainability of strategy raises a lot of questions.
Moreover, attracting the wave of clients might not necessarily translate to attracting drivers. In the past, price wars in cab-hailing services scared away drivers shying from little income.
While it is unclear whether the OCar pricing strategy will trigger similar chains of events, it is agreeable that the startup will have to find a way to bridge the excess demand emanating from cheap rides with supply of drivers.