Janet Ogundepo Published 29 January 2022
Janet Ogundepo writes about the challenges facing operators in the nation’s bike logistics sector
Journeying on an expressway or taking a walk, the sight of fully-clad bikers with a branded leather or plastic box strapped to the back of their bikes is a common sight in major cities. They go from one point to the other to deliver well-packaged goods to recipients. The dexterity at which they wriggle in and out of traffic could be daunting. It’s like they hold on to the ancient axiom that, ‘King’s business requires urgency.’
But parcel delivery is not the only thing lurked in their possession. They are armed with various local government permits, dues, stickers and certificates, among others. The documents are carefully arranged in a waterproof file and presented to the various task force teams from the local government and the ‘agberos’ (louts) who always intrude their movements.
But the several stops to present their permits, stickers or certificates usually result in more extortions. This development, coupled with other regulations and dubious workers, combined to frustrate some operators of dispatch riders out of the business.
The ugly side
But for the many LG permits and policies, constant extortions and arrests of her dispatch riders, the Chief Executive Officer of DK Logistics, Lagos, Kemi Ogunsi, would have continued to thrive in the logistics business she founded in 2019.
Her decision to reject incessant actions of the various local government officials and ‘agberos’ appeared to be the ‘the last straw that broke the camel’s back’ for her business.
“My reason for leaving the business was because of government policies with regards to the LG numerous permits. The LG boys known as ‘agberos’ disturb the riders, hold them for hours, ask for every document and despite producing them, they still find something to say. They tell the rider that they no longer use certain documents despite showing them all,”Ogunsi noted.
She said it would have been better if all the business required to operate was a licence, stating that it was frustrating having to produce many documents to the harassing council officials.
She stated, “Having to produce several documents to operate a small and medium scale business doesn’t make sense to me. I couldn’t fight it. I couldn’t cope with it. Then we have the Nigerian Postal Service who are not willing to deal with the issues of the LG boys who are always on the road. I am not sure they are from the local government where they disturb the dispatch riders.”
Ogunsi, operated as a business operator in the courier sector on a part-time basis to venture into it full time, further highlighted the challenges bedevilling the system. She added, “It affected me because before I started, I did everything I should. I underwent training, got every material that I should have, did feasibility study, registered the company and applied with the NIPOST. But when I couldn’t cope with the local governments’ extortion not necessarily because of incomplete documents but because of the N1,000 or N2,000 they want from me, I called quitted the business.’’
Also, Christiana Akinlose who became an entrepreneur and director of Tiana Courier Services in 2019, said she stopped the business due to the “continuous disturbance of the riders by the local government boys on the road,” She stated that they constantly extorted, searched and requested certificates, permits and stickers of their association.
Akinlose stated, “The local government officials keep disturbing the riders for different documents. They are the ones milking the operators. Today, they would stop a rider for not having a particular document. The next day, they would harass them for not having another document. I handled about six to seven riders. When I was done with the LG, tthere was also a mandate for delivery operators to have some criteria such as having shares, office space and others. I was put off by that. When I was still in the business, my riders can call me about five times to say that they were stopped by LG officials, or ‘agberos’ who requested documents for their territory and it was confusing.’’
She further said that some of the riders had the mindset to extort their bosses, stating that since one wasn’t on the road with them, one would have to believe whatever fault or issue they said happened to the bikes.
“Some pull out the tracker. To get a loyal rider was tough. I had about three loyal riders. I gave them the bikes and shut down when I couldn’t continue because of the stress,” Akinlose said.
Ecommerce Logistics home and abroad
The history of the NIPOST dates back to the 19th century with its first office established during colonial rule in 1852. According to the NIPOST website, the organisation “is the national carrier of all classes of mail items, which include letters, postcards, printed papers, parcels and aerogramme, for delivery both within and outside Nigeria.”
NIPOST also currently operates as a regulator for courier operations in the country while also being an operator. The PUNCH reported on December 3rd, 2021, that the NIPOST bill at the National Assembly would “revolutionalise the postal system” adding that “the new bill passed is to bring NIPOST into international best practices by separating NIPOST as an operator from being at the same time, a regulator. The regulatory power of the entire postal industry has been vested in the newly created Nigerian Postal Commission.”
An eCommerce company, ShipBob, refers to eCommerce logistics as the processes involved in the storage, packaging and shipment of online orders.
According to a global business community platform, Connects, the logistics business in the United Kingdom witnessed a 2.5 per cent growth rate during the COVID-19 pandemic.
Connects, also projected that E-commerce operations would dominate and the last-mile logistics would become a highly competitive environment due to the influx of start-ups “that want to address the challenges” in the logistics business.
In Nigeria, a global database platform that tracks startups, Tracxn, reports that as of December 25, 2021, there were 101 logistics tech startups. As of January 14, 2022, there were 2032 tech startups in the country.
Also, Trading Economics, reports that the Ease of Doing Business in Nigeria was at 128 by the end of 2020 and 133 at the end of 2021. It further projected the EDB at 135 for 2022.
Diverse challenges facing bike logistics operators
The stories of Ogunsi and Akinlose capture the frustrations operators of bike logistics face in the country.
Beyond grappling with the LG’s numerous demands, operators contend with dishonest bikers who abscond with their motorcycles or refuse to remit the agreed fee to the company’s account, insecurity, theft and clients’ excesses among other issues.
Speaking on the issue of multiple levies and lack of coordination among regulatory officers from the local government areas, a last-mile delivery operator and Chief Executive Officer of Madigital Logistics, Tobi Sodiya, said the multiple levies was a cog in the wheel of progress for the business.
He added that NIPOST requested evidence of tax payment as a prerequisite for obtaining a licence, pleading that courier start-ups be given time for the business to generate income and resources needed to meet the requirement for licensing.
He also complained of disloyal riders who would destroy the trackers on the company’s bike to prevent being monitored.
Sodiya further decried the constant calling of dispatch riders by customers expecting their parcels, stating that the riders responding to the calls on the highway could cause avoidable accidents.
Another bike logistics operator, RYNA logistics, Yusuf Olayinka, said the constant badgering of dispatch riders was affecting the daily delivery targets for the operators. He added that the late deliveries usually attract customer’s displeasure.
“The local government officials don’t know what they are looking for. They check through the documents one has and still try to find a means to scrutinise everything and make it look like some things are missing. But if one has the papers and other necessary documents, they become powerless. In some areas, like Ikorodu, the situation is worse and the owner would have to be at the concerned LG to secure release of the rider. This would affect the number of delivery budgeted for that particular day,” Olayinka stated.
He added that many of the riders lacked a good attitude for they could be rude to both the customers and owners.
He said, “For those placed on a salary, they have a lackadaisical attitude to work that shows that they don’t care whether they work or not, their salary would be paid. Many times, I have to beg my customers for my riders’ ignorance or mistakes. Those who have good riders are lucky and getting a good one is a herculean task one faces in this business.’’
On the regulatory fees, Olayinka supported the need for regulation in the business, noting that the regulatory fee of N250,000 and an annual renewal fee of N100,000 was exorbitant for start-ups.
Joseph Adedeji is another dispatch operator who gives out his bikes on hire purchase to independent dispatch riders. But two out of his seven riders refused to pay the agreed weekly price of N12,500 for more than a month, forcing him to collect the bikes from them. He stated that some riders’ irresponsibility had left a bitter taste in the mouths of their bosses.
Adedeji said, “We have bad riders and we have good ones. When the riders are given the bikes and they use them for five months and stop payment for about a month, it becomes a bad business because one would have to sell the bikes.”
The situation is not different for some bike logistics operators in Abuja who apart from the harassment by touts faced by their colleagues in Lagos and Ogun states, they also contend with the challenge of multiple levies by LG officials.
For a courier operator based in Abuja, Zetro Logistics, Charles Orifa, dispatch riders carried the permits for various local governments as they moved within the Federal Capital Territory.
He added, “Touts don’t molest us but the LG task force who check for documents and ensure enforcement.”
He also said that the period riders were stopped for a document check would affect the prompt delivery of clients’ parcels.
Also, a courier operator based in Abuja, SIL logistics, Victor Adedoyin, noted that the need for riders with technological and communication skills and a good character should be the criteria for recruiting riders.
He, however, noted that such riders were hard to comeby because those fit for the role requested a higher salary.
Adedoyin said, “We have issues with the local government regulations. We have this body, Abuja Municipal Area Council that is not well structured such that to get the operational permit and mobile adverts permit is a challenge. At times the documents of riders at a particular location would be acknowledged as original, while at other places, the paper is termed fake.”
He added that some clients’ arbitrary change of drop-off locations while the rider was near usually affected the riders’ focus and direction.
We’re harassed by touts, LG officials, angry clients –Riders
A former rider with one of the leading logistics brands in Lagos, identified as Emmanuel, said he constantly faced delays and harassment by LG officials and louts.
He said, “You know at every corner in Lagos, there are these boys they call council boys. They stop one to ask for documents that are not even for them. They can delay a rider for over three to four hours when they stop them. If the rider does not have any of the documents they requested, they will take the person to their office and still collect money from the rider. They also do the work of road safety officials.”
Another rider who started the job in 2017, identified only as Ayotunde, said that having good customer relationships skills was important while meeting with clients.
Ayotunde added, “To be a dispatch rider in Nigeria is not easy because the employers give the riders a particular target and any infraction would be met with salary deduction. Being on the road is not an easy thing because one would want to meet up delivering a customer’s parcel on time. In that instance, one would have no choice but to drive above the speed limit.”
Ayotunde also complained about some clients’ attitude to some of the riders who he accused of transferring aggression on them for an offence they didn’t commit.
On the issue of harassment from LG officials and louts, Ayotunde stated that riders from dispatch firms in Lagos delivering parcels to clients in Ogun State were usually harassed for permits.
He added that every rider on transit was expected to have the stickers and permits of each LG in Lagos State and those of the state government.
For a one-man bicycle delivery business operator in Ibadan, Oyo State, Mr Paul Dibia, the challenge of navigating unnumbered and unfamiliar streets was a task he faced during delivery of parcels to customers.
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He said that trying to ask for major landmarks from passersby and residents of the area to get to his drop off site always caused a delay in delivery time.
Though Dibia said he didn’t face extortion and not harassed by council officials and louts, he added, “Customers delay in receiving or agreeing to meet at the designated delivery eats into the allotted delivery time of other clients.”
He added that protecting customer’s packages was risky for riders who would have to open packages when stopped by security agents to be sure they weren’t transporting drugs.
Last year, the Lagos State House of Assembly ordered Local Government councils and Local Council Development Areas in the state to stop extorting and harassing operators of logistics services in the state.
Delayed delivery time, tips, others put us off most times –Clients
Some clients of eCommerce and logistics businesses shared the stories of their regular encounters with riders during deliveries of packages.
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The Creative Director, Petroyal Apparel, Peter Adebiyi, said that he used the services of bike logistics operators for his business, adding that he normally faced the challenge of delay in delivery time.
Adebiyi said, “I have had several experiences with some dispatch riders who didn’t deliver the products I ordered when they ought to and it affected the timeline that was given to me by my client. I couldn’t give them the clothes on the day they needed it and it was delivered the next day.”
He noted that the delivery fee wasn’t expensive except those of popular logistics company, stating that the service saved client’s time.
He added that local government policies were hindering the activities of the riders from servicing border towns.
He also urged delivery operators and riders to ensure prompt delivery of parcels.
Also, a frequent user of delivery service operators, identified as Ifediba, explained that some riders were always late in parcel delivery and some request tips.
“Some of them are good with their jobs and polite about it. This often determines how one relates with them. There are rude ones too. Some of them would request tips and that can be annoying and makes one uncomfortable. There is a particular delivery operator that usually delivers late while riders from the post office would expect one to grease their palm,’’ she said.
Multiple levies, other challenges choking bike logistics business – Courier operators’ body
The President, Association of Lagos State Courier Operators, Anthony Akhagba, also highlighted the challenges facing members of the association.
Akhagba said, “Most of us fall under the SME category licence and we are meant to pay N250,000 for that. This is different from the money for registering the company, insurance and obtaining other documents. When you sum that up, you would have spent another N200,000.
“Our major challenge starts with the so-called LG officials and louts called ‘agberos’. There are some people who claim they work with the council whereas they have no means of identification. Ordinarily, there are some documents that are not within their jurisdiction, though the riders have them, they still ask for the documents and at times, extort money from the riders.
“There are some documents that a rider only has to tender the photocopies yet the LG Officials ask for the original copies even when they have no means to verify the genuineness of the documents. They just want to delay the rider, take them to their boss and at the end, request some money without considering that the more a rider is delayed, the more a customer’s order is delayed.”
Akhagba added that at the state government level, during the 2020 COVID-19 lockdown, the Ministry of Transportation stated that members of the association had to get approval for operating the dispatch service and issued a paper called MoT.
“We are to pay N5,000 to the bank and N1,000 in their office and with this, we get the approval. But on the first set of papers revealed in 2020, there was no expiration date on the document. All of a sudden, last year, the paper became valid for one year. This document only lists the bike’s particulars, the number of bikes owned by the organisation. Now, we have to pay N6,000 every year,” Akhagba said.
He decried the state government’s issuance of a state carriage document meant for the courier logistics sector, adding that after the clarification was made, LG officials continued to request the documents from the riders.
He condemned the inconsistencies in the type and number of permits, stickers and licence dispatch riders were to have, noting that the irregularities were causing confusion and economic loss to their members.
“There is a class A licence for motorcycles and in Lagos, there is a riders card, now the road safety officials request a driving licence while the task force ask for a rider’s card and reject the driving licence. An average document of a rider is almost 40 pages with different papers and they differ from local government to local government. Some of these cost about N2,500 each,” Akhagba said
He further stated that the average challenge was the dispatch riders themselves,stating “These days, it is hard to get a good dispatch rider. Some of them want a particular amount and are not ready to do the work. Some also get employed and after a few days abscond with the employers’ bikes and customers’ goods. But as people are running in, some are running out because of the frustrations starting from the riders, customers’ unwillingness to pay well among others.”
On his part, the Chief Executive Officer, Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, condemned the harassment and extortion of courier service operators by the council officials and touts.
He also called on the government to harmonise the levies and ensure SME-friendly regulations.
He said, “The economic impact is obviously negative because the government has been talking about its desire to create employment and eradicate poverty. This courier service has a lot of SMEs and they are subjected to harassment from point to point. I have also seen some of these people on the road , they wear reflective jackets and stop riders. They call themselves taskforce yet extort money from them. Sometimes, they seize their motorcycles and other things. It has been a bad experience for the SMEs in that sector. Particularly, the Lagos State government should ensure an urgent intervention in that space, so that the impunity with which all these characters harass the people in the logistics business is reduced.”
He advocated harmonisation of the various levies “that once they pay one fee or levy and they have a ticket and evidence of payment, it should take them across the entire state.”
Yusuf implored the courier operators and dispatch riders to comply with the regulatory requirement by NIPOST and the ministry by registering their bikes and companies.
He noted, “There is also the need to distinguish between the courier services because there are some people such as caterers who have their own bikes. It’s not that they are in the courier business, they are only using the services to distribute their goods, so they should be able to distinguish them from those running pure courier services.’’
Besides, a former chairperson of the Society for Women in Taxation and Partner, BMO and Co Chartered Accountants, Mrs Dena Rose Ajayi, called on state governments to end the constant harassment of dispatch riders and to harmonise the multiple levies to curb the issue of multiple taxations.
She noted however that some riders don’t comply with traffic rules as some of them had been caught driving against traffic thereby making them victims of extortion by the road traffic officers.
She added, “They (delivery business operators) need to have a better arrangement with the riders that could be a payment after delivery basis. The education of the start-up owners is important. They need to go for training, it is not sufficient to start the business without having the knowledge and how they can access loans from the banks. For example, the Bank of Industry is doing a lot for businesses. Some of the microfinance banks too. They can form a group to access the money and at the end of the day, the default rate would be lower.
“The government already has tax policies for start-ups. Start-ups cannot be paying same kind of taxes as they recognise that they are just starting. There are many other incentives to ensure that they stay afloat. If they are in a group, they need to get a tax expert so that when the government authorities come, they have someone who is equipped to speak for them and help them out so they do not keep on paying what they are not supposed to pay.
According to her, the levies collected from them are classified as taxes because the local government is legislated and has the right to collect some certain types of levies and a tax is a compulsory levy.
She said, “What we experience in Nigeria is that people who are overzealous would then begin to ask others to begin to pay this and that is why they should have a tax expert to make sure they are not unnecessarily taxed.”
Commenting on the matter, the Managing Partner, BMO and Co Chartered Accountants, Mrs Bukunola Akinmoladun, urged start-ups to seek knowledge about their business and the laws, regulations, policies and environmental contributors in their businesses.
She said, “The challenge is not just with start-ups, the only problem with the start-ups is because of their size, they are not able to absolve those things and get the right counsel and professional advice. They are being extorted because they also don’t know what they are entitled to and what they should be paying. The levies and charges have always been there but ignorance of the environmental impacts of their businesses is waht affects them. The external factors are laws, and regulations you are meant to comply with, if you comply with them and you know what your rights are, then you will be able to stand your ground.
“The business climate, especially the fiscal policies of Nigeria, is not helping businesses. Not only start-ups, it affects all of us. Lack of information and data is a key factor in the inability of start-ups to make economic projections.”
Akinmoladun advised small businesses to belong to an organised group and “join the pressure group to have a voice and the government’s ears. Also, no one should start a business without learning the rules of it, not just the business but the environmental factors that may affect you. You must be prepared. Business dynamics have changed and people need to walk and move in its time.”
Also, the Executive Secretary, Nigerian Association of Small and Medium Enterprises, Eke Ubiji, called for uniformity of levies that would cover up for the places a dispatch rider would want to reach.
He stated that there should be a concerted effort by the courier association that would ensure legislation to address the issue of multiple taxations nationally.
“If it is addressed in a particular state alone what would happen when they (courier operators) want to enter into another state. They should organise themselves and confront challenges headlong and the government should listen,” Ubiji said.
LASG, LGs, others react
In his comment on the matter, the Lagos State Commissioner for Information and Strategy, Mr Gbenga Omotoso, said the dispatch riders should have required documents as road users.
“The rider’s card and licence fee are the things everyone who puts a vehicle on the road should obtain. The local government has their own levies and charges on the various services they render. What the state government is trying to do in transportation, for example, is easy and harmonised payment for drivers so that various local governments won’t be charging people separately. If we have LASEMA, LASEPA, ministry of transportation, you will see that this is cumbersome, slows down their operation and offers no protection for the drivers. These have been harmonised and the local governments will not stop vehicles from one local government to another. This issue of dispatch riders, in particular, I don’t want to speak about that because I don’t have the facts for now. The state government is independent of the local government and I won’t be able to speak for them,” Omotoso said.
On the alleged harassment and arrest of dispatch riders by the state Traffic Management Authority, Omotoso likened their behaviour to that of commercial motorcyclists popularly called okada. He also condemned their disregard for traffic rules.
On his part, the Head of Revenue, Abuja Municipal Area Council, Dallami Awaje, said that levy collection in the area had been centralised, adding that detained dispatch riders were those who did not get their papers from the appropriate quarters.
Awaje said, “It is the sole responsibility of the local government to collect mobile advert and some of permits as enshrined in the fourth schedule in the constitution of Nigeria. Before now, the six area councils engaged technical partners to collect some of the revenues on their behalf. Unfortunately, it became clear that some of the collections do not go down to the coffers of the area councils. Some unscrupulous elements go about collecting the monies and do not remit to the area councils. As a remedy, the six area councils met with the authorities of the FCT administration and agreed that the collection should be centralised and the centralisation includes mobile adverts, which is the local government permit and advertisement and signage in the FCT.’’
He further said that the Department of Outdoor, Advertisement and Signage was created for the purpose, disclosing that six area councils entered into a Memorandum of Understandingwith DOAS and shelved their collection right to the department.
“The area councils sent out messages via the media stating that nobody should collect any of the documents from any agent or anyone apart from the one that would be issued by DOAS. It was clearly stated that anybody that goes elsewhere to buy the document and is caught would be made to buy that of DOAS which is the approved one.
“There were some challenges during the production of the document that caused some delays but there was an instruction that everyone should wait to but some people who were in a hurry went to buy from the people who sold it before. So those without the document from DOAS, who has been empowered to do the collection on behalf of the area council, would be arrested and asked to pay again because they were already warned. This is the reason for the situation of those who have the document and were also asked to buy the one that from DOAS,” Awaje added.
Reacting to the issue, Jumu’ah Abiodun, the Chief Press Secretary to the Chairman, Ojodu Local Council Development Area, Mr David Odunmbaku,said that touting and issuance of multiple permits to delivery bikers and harassment were not happening in the council.
He said, “I can tell you categorically that since we came on board there has never been anything such as the harassment of delivery riders because of tickets or permits. We hold town hall meetings frequently with the people to tell us their plights. I have never heard anything of such in any of our meetings with them. Those doing those things are not from the council. We haven’t had any task force on the road since we came on board.”
Besides, Mr Tosin Mabunmi, who spoke on behalf of the Chairman, Ikorodu Local Government, Mr Wasiu Adesina, said those collecting levies on the road were doing it illegally.
He said, “Sometime last year, the ordered councils and LCDs not to disturb dispatch riders. The chairman directed those in charge to stop collecting money from the dispatch riders and refrain from disturbing them on the road. Those doing that now do it illegally.”
Mabunmi stated that the council had not received complaints about it from logistics operators, adding that the chairman would act on it if such was brought to his notice.
Efforts to get the comment of the NIPOST on the issue were abortive.
The Consultant to the service, Mr Semiu Okanlanwon, had yet to get back to our correspondent as of press time on the enquiry which he said was forwarded to the relevant quarters.
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