AN ASSESSMENT OF THE IMPACT OF RIDE HAILING SERVICES ON ECONOMIC DEVELOPMENT. A CASE STUDY OF UBER AND BOLT

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Transportation serves as the fundamental infrastructure supporting urban existence. One of the primary determinants influencing the socio-economic and political progress of a city is this particular aspect. The efficient transport system has had a significant impact on cities, particularly in terms of accessibility and mobility. This impact is evident in the way it influences the location of economic and social activity, facilitates trade, allows for access to resources and people, and enables greater economies of scale on a global scale (Rogers, 2015). Transportation has a crucial part in various domains of human endeavours, making it a significant factor that greatly influences the success of these operations. The transportation of products and services has assumed a critical role in the Nigerian economy, mostly due to the significant contribution it makes to foreign exchange profits within this sector. Transportation plays a pivotal role in fostering the development and prosperity of a nation (Rogers, 2015).

The ride-hailing sector has experienced significant growth, evolving from a minor start-up market to a prominent force in technological disruption. As of 2017, the industry generated over US$60 billion in sales, and it is anticipated to expand further, reaching an estimated revenue of $285 billion by 2030. Furthermore, subsequent to the introduction of Uber, a multitude of rivals have surfaced, including Lyft in the United States, Didi in China, and Grab in Southeast Asia. According to Earnest (2017), traditional taxi businesses have embraced or created smartphone applications (apps) in order to rival the ride-hailing industry's ease. Through the use of a smartphone, a customer is able to conveniently book a ride within a range of three to five taps on a designated application. In the event that the price of a particular option increases, consumers possess the ability to readily transition to alternative possibilities. In reality, the process of substitution is further facilitated when a flat-rate taxi booking service is accessible through a mobile application. This is due to the simplified nature of price comparison, as clients are relieved from the need to continuously monitor and assess taxi fares in real-time. In summary, the fate of the traditional transport sector and the potential success of disruptive entities ultimately rest upon the decisions made by consumers (Intuit, 2017).

Afolabi, Musa, and Adeoye (2018) assert that the utilisation of ride hailing services has gained significant traction in both developed and developing nations. This phenomenon has evolved from an initial niche innovation to a socio-technological system that now encompasses a substantial proportion of metropolitan journeys. In the Nigerian context, the aforementioned transport networks represent 15% of interstate journeys and 20% of urban travel. Numerous scholarly investigations have endeavoured to examine the favourable and unfavourable impacts of this transportation innovation within urban areas. According to Afolabi et al. (2018), this transportation advancement has the potential to assist communities in addressing various social, economic, and environmental concerns, including climate change, energy, segregation, and poverty. Therefore, comprehending the impacts of this breakthrough can furnish valuable insights for making informed decisions regarding efficient management and legislation. Hence, given the significance of the subject matter and the growing body of scholarly articles published subsequent to the advent of ride-hailing in 2012, it is timely to conduct a systematic literature review on the positive and negative impacts of these services on economic development.

1.2 STATEMENT OF THE PROBLEM

In recent years, a new generation of taxi services called on-demand ride hailing has begun to emerge, changing the transportation landscape, and seen by some as a panacea to address some transport-related challenges facing society. By applying an algorithm based on pickup and drop-off locations, ride hailing match passengers who need a ride with self-employed drivers who tend to provide a trip in their privately owned cars (Intuit 2017). TNCs have expanded their footprint into more cities and are now among the most prosperous and valuable global start-ups. The proliferation of ride hailing services has attracted considerable attention from scholars in various fields and it has been investigated from different points of view. Social research on ride hailing has focused on themes such as equity and well being, discrimination, tensions between traditional taxis and ride hailing services, safety and security, and employment rights (Earnest 2017). Economic research has covered a diverse set of topics, including pricing, job creation and employment, competitions between ride hailing services,and efficiency hence this study will be assessing the impact of ride hailing services on economic development. A case study of uber and bolt.

1.3 OBJECTIVES OF THE STUDY

The broad objective of this study is to assess the impact of ride hailing services on economic development using uber and bolt as a case study. Specifically, this study aims:

i.          To determine the extent of use of ride hailing services

ii.        To examine the factors that promote the use of ride hailing services.

iii.      To investigate the challenges of ride hailing services

1.4 RESEARCH QUESTIONS

The following research questions will be answered in this study:

i.          What is the extent of use of ride hailing services?

ii.        What are the factors that promote the use of ride hailing services?

iii.      What are the challenges of ride hailing services?

1.5 SIGNIFICANCE OF THE STUDY

This study aims to assess the effectiveness of  as a powerful tool for political transportation and economic development, thereby establishing it as one among other economic channels. The ride hailing services in Nigeria employed the utilisation of preexisting trends or patterns in order to generate predictions or projections.

Finally, this study will serve as an existing material for further studies and future reference.

1.6 SCOPE OF THE STUDY

This study primarily focuses on assessing the impact of ride hailing services on economic development using uber and bolt as a case study. Specifically, the study focuses determining the extent of use of ride hailing services, examining the factors that promote the use of ride hailing services and investigating the challenges of ride hailing services.

Selected residents of Abeokuta, Ogun State will serve as enrolled participants for the survey of this study.

1.7 LIMITATIONS OF THE STUDY

In the course of carrying out this study, the researcher experienced some constraints, which included time constraints, financial constraints, language barriers, and the attitude of the respondents. However, the researcher were able to manage these just to ensure the success of this study.

Moreover, the case study method utilized in the study posed some challenges to the investigator including the possibility of biases and poor judgment of issues. However, the investigator relied on respect for the general principles of procedures, justice, fairness, objectivity in observation and recording, and weighing of evidence to overcome the challenges.

1.8 DEFINITION OF TERMS

Ride hailing: the activity of asking for a car and driver to come immediately and take you somewhere, or a service that lets you do this.

Economic Development: economic and social development is the process by which the economic well-being and quality of life of a nation, region, local community, or an individual are improved according to targeted goals and objectives.