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Trends that will shape Ghana’s mobility sector in 2023

January 25, 2023
Reading Time: 4 mins read
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Many countries in Africa mainly rely on road transport for most of their mobility needs which comprise the movement of people and freight. However, as cities have continued to grow, the need for proportionate expansion and innovation of mobility infrastructure has risen exponentially.

In Ghana, stakeholders have been advocating for mobility leaders to reimagine the future of mobility so we can be mobility smart. This would be in tandem with other African countries where cities are redefining car lanes to create more space for bikes and scooters, supporting the development of electric vehicles (EVs) and incentivising eco-friendly solutions.

The following shifts and trends will shape Ghana’s mobility sector this year. First, they will likely impact consumer behaviour, policy-making and how the leaders of our economy will prioritise their transport development budgets.

The changing face of cities – will it catch up with Accra?

Over the past few years, cities have been dominated by cars, but now we’re entering an era where many people don’t feel like they need to own a private car. People are also realising that ride-hailing will not replace private cars on its own. So there needs to be a combination of services, including scooters, e-bikes, ridesharing and carsharing, that will be a compelling alternative to private cars.

However, Ghana’s middle and upper classes still primarily thrive on the ownership of private cars.

“Accra epitomises an automobile-dependent society.” (Armah, Yawson and Pappoe, 2010). This refers to the excessive use of automobiles due to the lack of other forms of transportation and insufficient incentives to use alternative modes of transport, i.e., e-scooters, e-bikes and ridesharing.

In contrast, automobile ownership is complex for many Ghanaians since they need access to financing and options like leases. For example, approximately 84% of all daily passenger trips leave or enter the Accra Ring Road area, and the Motorway is made via public transport. So, in Accra, the lower-income earning individuals – who make up most of the population – don’t necessarily use private cars but prefer public transportation as it likely works out to be more affordable.

Ride-hailing supply and demand to get closer to equilibrium.

A survey conducted in 2022 showed that 55.2% of the population believed Bolt was the most affordable ride-hailing service in Ghana despite 2022 being a challenging year with currency depreciation and inflation. After we transitioned from the pandemic, demand grew so fast that supply couldn’t catch up.

As a result, prices increased, and arrival times were much longer. So what’s starting to happen is gradual, demand is getting back to reasonable levels, and at the same time, people need to come back to work, so driver supply is improving.

As a result, we’re reaching a new normal equilibrium where we’re expecting plenty of drivers on the platform and plenty of earning opportunities for them. That will result in a better experience for riders and better earnings for drivers.

Only resilient operators are going to succeed.

While Ghana is still in its tech boom, there is still space in the market for new technological advancements. It might be fairer to say that it is the most resilient and innovative operators that will succeed.

In Ghana, for instance, Bolt launched a free “Call-A-Bolt” service because many Ghanaians cannot easily access the internet on their mobile phones for various reasons. However, during this tech boom, there has been plenty of funding to go around. Still, it is inevitable that with the outlook of the financial markets not being positive, it is very likely that we shall witness less funding.

This notwithstanding, Ghana is a lucrative market because we’ve always been conscious of cost efficiency. That’s a significant driver of why we’ve been successful as a company, so we welcome this new era where capital is a bit harder to get. It’s also a bit more rational – companies need to compete on their merits, and we think we’ve been operating so well over the last five years, and much more efficiently than others, that we’re going to do much better than lots of other companies in this new era.

Cost of living crisis – will people really cut down their spending?

With inflation in Ghana and the increased costs of goods and services, it is an assumption that the demand for ride-hailing services will reduce. But it is also essential to remember the cost-of-living crisis; drivers have more security and formal arrangement working with e-hailing companies than driving a regular taxi (Pasquali et al., 2022).

So, drivers will likely be motivated to complete more trips to make sufficient income. However, drivers cannot complete trips without passengers, so if passengers decide to stop using ride-hailing services and decide to use public transport, it will affect drivers and, in the long run, the company as a whole.

Bolt has the upper hand over public transport in Ghana, which could be a reputation for poor safety standards and low service quality. While trotro is more affordable in terms of cost, it has a reputation for poor safety standards and low service quality. This could mean that demand might only fall slightly.

Having the best talent is going to be more critical than ever

When consumers have more disposable income, they are more likely to look for a service. For a business to be successful, it is vital that the service provided is quality and tailored to customers. Ride-hailing services in Ghana remain competitive in line with the global arena. In today’s macroeconomic environment, having people with the right mindset will be critical.

A study conducted in 2022 shows that Ghanaian users have at least two applications of ride-hailing service providers on their mobile devices. Bolt rounded up 2022 with an average driver rating of 4.8/5 stars. These stats allow us to infer that Ghanaians, on average, receive quality service from Bolt drivers. 2023 is going to be a challenging period for many businesses, and the battle to find people who can perform efficiently at a high level will be hugely competitive.

Micro mobility Consolidation

As mentioned earlier, Ghana is heavily automobile dependent. For micro-mobility to penetrate the Ghanaian market, the overreliance on private vehicles must reduce drastically. However, the reality is that micro-mobility is a space where you need to be extremely large to influence the change in mindset and behaviour required.

As a result, we think it will be inevitable for consolidation in the market to take place – a trend we should be surprised about if we look at examples from ride-hailing and grocery delivery.

When Bolt was launched in 2017, there were 13 ride-hailing companies in Africa. Today, there are only a handful left. The most recent example of consolidation we’ve seen was in food delivery when there were dozens of players around the time of the pandemic, but now it’s consolidated. So we don’t see any reason why that isn’t going to happen in micro-mobility, which is why the scale is so important.

 

Source: David Nikoi, Country Manager, Bolt
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