Uber's Exit: Lessons for Nigeria's Market Regulation

In the first part of this discussion, I looked at what Uber's exit shows about Nigeria's old infrastructure beneath our so-called digital economy. But physical and digital infrastructure are just part of the picture. We also need to ask how well Nigeria manages the markets built on top of them.

Uber's experience in Nigeria highlights not just the old infrastructure under our digital economy. It also raises a tougher question: How well do we manage the markets created on that infrastructure?

Technology can help track drivers, record journeys, make payments clear, and handle customer complaints better. But these benefits only come when there is fair regulation, clear responsibilities, and institutions that enforce the rules consistently.

The recent argument about e-hailing access to Nigerian airports shows what happens when these conditions are missing.

The Airport Example: When Regulation Creates Scarcity

FAAN's position makes sense. Airports require strict security, and the Authority says transport operators need to operate in ways that allow for visibility of vehicles and drivers and enable effective responses to security and passenger issues. The aim is valid, especially given Nigeria's current security situation.

But the key question should always be: What is the least disruptive way to achieve that goal?

There is a big difference between regulating something and creating exclusivity. If every commercial driver entering an airport must be identifiable, insured, and accountable, technology should make this easier. It should not force passengers to lose access to other options.

A simple framework could register platforms and operators, set clear standards, and require drivers and vehicles to meet them. This system could combine identity and vehicle records, create designated pick-up areas when needed, and impose penalties when rules are broken.

For this framework to work, governance must be accountable, fair, and transparent, with incentives for everyone to comply.

What has instead happened seems to limit competition while pretending to ensure security. This raises a crucial question: where does the Federal Competition and Consumer Protection Commission fit into this situation?

The issue goes beyond Uber. It relates to balancing real security needs, a friendly business environment, and protecting consumers. Security reasons should not justify removing competition or forcing passengers to pay much higher prices.

Anyone who has arrived at a Nigerian airport and tried to find transport into the city knows this well. For example, traveling from the domestic airport in Ikeja to other parts of Ikeja can cost several times more than a ride-hailing service, while going towards Lekki can become very costly. This makes you question what justifies those prices and how much is real operating costs versus what comes from limited competition.

This is how we make life unnecessarily expensive for ourselves.

We create regulatory scarcity, prices go up, and then the government steps in again to deal with the high cost of living partly caused by its actions. At some point, we need to realize that good regulation is not about how many restrictions the government can impose. It's about whether real public goals are met with the least economic disruption.

The Platform, the Driver, and the State

Another important point that often gets lost in talks about ride-hailing is this: Uber is a platform; the driver drives the car. This does not excuse Uber from its responsibilities, but it also does not make the platform responsible for every failure related to the service.

Platform companies have faced valid criticism worldwide about commissions, unclear algorithms, driver welfare, and the huge power they have over those classified as independent operators. Drivers complain about not always knowing enough about rides before accepting them, platform fees, and other issues. These are real regulatory concerns.

Tech companies are businesses, not charities. They will protect their profits, markets, and shareholders. Nigeria needs to regulate them proactively to protect workers and consumers, support fair pricing, and ensure personal data is safe.

But we also need to clarify where responsibilities lie.

Who owns and takes care of the vehicle? Who presents it for inspection? Who turns off the app to negotiate privately with passengers? Who checks if vehicles are roadworthy and licenses drivers? Who decides if a dangerously defective vehicle can stay on the road? Who maintains the infrastructure they use?

These responsibilities do not rest solely on the platform. They are shared among drivers, passengers, platform companies, and different government bodies. The challenge is to create a system that holds everyone accountable for their assigned roles.

If a driver registers a good vehicle and later switches it for a poor one, that is misconduct on the operator’s part. If the platform allows it, it becomes a problem for platform governance. If passengers keep facing such issues but never report them, an important feedback system fails. This does not excuse the platform from its duty to monitor the service.

If an unroadworthy vehicle operates indefinitely despite the presence of the Police, FRSC, VIO, LASTMA, and other regulatory agencies, then we are facing a bigger problem: state-capacity failure.

The right response is not to blame ‘Uber’, drivers, passengers, or the Nigerian state. A working system should make that choice unnecessary because responsibilities would be clear and consequences predictable. Operators would know the standards they must meet; platforms would understand their responsibilities; customers would know where and how to complain; and regulators would enforce rules consistently, not sporadically.

Once again, an old institutional foundation makes it hard to govern even a technologically advanced platform.

Nigeria Needs Honest Self-Discovery

Maybe the bigger lesson is that Nigeria needs to be more honest about its technological and institutional position.

We want artificial intelligence, smart cities, fintech growth, e-commerce, electric transport, and tech-based public services. These are good goals. But development does not happen just because we adopt the language of advanced economies or because smartphones and apps are everywhere.

We need what I call economic self-discovery: a clear look at where the economy truly stands, especially at the grassroots level, and a planned process for upgrading from there.

How digitally skilled are we really? How many working Nigerians have identities that can be reliably verified in necessary systems? How much of the country has reliable addresses? How complete are our property and vehicle records? How well do our government databases work together? How easily can lenders check creditworthiness? How smoothly can businesses enforce valid contracts? How much of our interaction with the government still depends on knowing someone, visiting an office, negotiating with an official, or paying an intermediary?

These questions tell us much more about digital transformation than the number of smartphones in circulation. I hope the Federal Ministry of Communications, Innovation and Digital Economy, along with other relevant ministries, departments, and agencies, will see this as a call to action rather than criticism.

We should not be ashamed of the answers. Development starts with knowing where you actually are. The danger comes from confusing widespread use of digital technology with the deeper tech capabilities needed to organize production, regulate markets, and improve productivity.

This is especially important because Nigeria's digital growth has been uneven. The financial sector has advanced much faster than education, transport, public administration, and large parts of the informal economy. A truthful productivity strategy cannot just call for more technology. It must pinpoint where tech use has entered productive processes and where the economy still relies heavily on manual methods, informal relationships, and human judgment.

Only then can upgrading be meaningful rather than trendy.

The Business Environment Beneath the App

This brings us back to Uber.

Investors, whether local or foreign, come mainly to make profits. That is not a bad thing; it is the basic deal of investment promotion. If Nigeria wants businesses, our duty is to create an environment where legitimate companies can compete, earn profits, meet their obligations, and operate under clear, fair, and consistently enforced rules.

Their duty is to follow those rules, pay legitimate taxes, treat workers and customers fairly, and run their businesses responsibly. That is what business ethics requires. That is what Nigerian business laws and regulations say.

It is a two-way relationship. If I invite you into my home, I must make the room reasonably comfortable; you also have to respect my house rules.

What we cannot do is invite investors and then assume that just because Nigeria has over 200 million people, they must stay regardless of the economics. A large population does not automatically mean purchasing power, good infrastructure, market efficiency, or profitability. Big companies can be quite unemotional: when the numbers do not add up and management sees no clear way to make them work, they pull out.

That is exactly why countries compete for investment, and investors decide based on the quality of the business environment, the reliability of regulations, and the chance of making sustainable profits.

None of this means Nigeria should bend its laws for Uber or any other investor. Nor should Uber's exit be a reason to unfairly blame Nigeria. The better lesson is that a competitive business environment is built through working institutions, good infrastructure, and predictable governance, not just from investment-promotion speeches or the size of the local market.

This also means that regulation must do more than impose rules. It must create real incentives for compliance, clarify the responsibilities of different players, and apply penalties fairly. Where operators misbehave, they should face consequences. Where platforms exploit workers or consumers, they should be regulated. Where public agencies create unnecessary barriers or use regulation to protect exclusive interests, they should also be held responsible.

Fairness cannot work in just one direction.

Uber's exit should make us ask a more important question: What kind of economy are we telling digital businesses, and all productive businesses, to operate in?

Nigeria's problem might no longer just be access to technology. We have apps, smartphones, advanced payment systems, and a more tech-aware population. What we have not built enough is the institutional, physical, and information infrastructure that supports them.

Even where parts of that infrastructure exist, poor coordination, arbitrary regulations, and inconsistent enforcement stop us from realizing their full value. The result is an economy where technology can sometimes speed up transactions without making the underlying system more productive, accountable, or fair.

Until we face that gap honestly, we will keep introducing modern applications into systems that are still too old-fashioned and wonder why the expected efficiencies do not fully appear.

Technology can improve a functioning system; it cannot replace one.