Lagos based startup sacks 70% of its workforce over Okada ban as unemployment climbs

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Naija247news understands that Lagos-based motorcycle-hailing startup, Gokada, has sacked 70 percent of its workforce due to on-going Lagos ban on Okada, Keke Napep riders.

Launched in January 2018, the startup was founded by Fahim Saleh to solve Nigeria’s largest city’s traffic problems. Since then, Gokada has gone on to raise a total of $5.6 million from two rounds and claims to have completed more than a million rides.

However, amidst the fundraising and fanfare, there has always been bad blood and uncertainty.

A year and a few months after launch, it was reported that Deji Oduntan stepped down from his CEO role as co-founder Fahim Saleh took over. At the time, there were allegations of mismanagement and misconduct at the startup which Saleh denied during an interview with Techpoint.
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In August 2019, three months after raising $5.3 million series A and announcing Ayodeji Adewunmi as co-CEO, Saleh revealed plans, via a Medium post, to suspend all Gokada operations for two weeks. This was due to the unpleasant experience he encountered when trying to use the motorcycle-hailing service some days before.

Consequently, Saleh said the company would undergo an overhaul to ensure that drivers were retrained as well as launch new bikes and new Bluetooth helmets for riders. Keeping to its promise, Gokada did just that.

However, there are unconfirmed reports that this change in operations might have cost the two-year-old startup a lot.

According to an anonymous source close to the matter,

“When Fahim got the money, he used a bulk of it to buy over 2,000 bikes where each bike cost about $1500 without factoring the cost of helmet, trackers, Bluetooth, shipping and custom fees. Multiplied by 2,000 bikes, that’s a bulk of the fundraising. Having spent a bulk of the fundraising, they don’t have enough funds in the bank.

“Secondly, they couldn’t onboard enough riders and because of that, they were already in a financial crisis by December as they struggled to pay salary. Then they secretly laid off some staff. But immediately they heard the news of the okada ban, they sacked close to 70% of the staff as a cover-up of their previous sackings.”

The source also claims that Adewunmi, the co-CEO hired in May 2019, left the company last month.

In addition to this, another source claims that Gokada laid off most of its staff two days after the announcement of the ban.

Just a week ago, on January 27, the Lagos state government announced the ban of all forms of motorcycles and tricycles in major parts of Lagos. Motorcycle-hailing startups like Gokada and MAX Okada were not exempt.

This caused the startups to engage in a protest against the new regulation. Also, Saleh released a video addressing the ban, so it comes as a surprise if the green-branded motorcycle-hailing service has taken this course of action.

This is a developing story.

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Godwin Okafor is a Financial Journalist, Internet Social Entrepreneur and Founder of Naija247news Media Limited. He has over 16 years experience in financial journalism. His experience cuts across traditional and digital media. He started his journalism career at Business Day, Nigeria and founded Naija247news Media in 2010. Godwin holds a Bachelors degree in Industrial Relations and Personnel Management from the Lagos State University, Ojo, Lagos. He is an alumni of Lagos Business School and a Fellow of the University of Pennsylvania (Wharton Seminar for Business Journalists). Over the years, he has won a number of journalism awards. Godwin is the chairman of Emmerich Resources Limited, the publisher of Naija247news.

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