Transportation is an essential part of human activity, and in many ways form the basis of all socio-economic interactions. Indeed, no two locations will interact effectively without a viable means of movement.

In many developing countries, inadequate transport facilities are often the norm rather than the exception. Thus, a good transport system is essential to support economic growth and development. 

Since the attainment of independence in 1960, the problems of Nigerian transport system include bad roads; inadequate fleets of buses or trucks; irregular, inadequate and overcrowded trains and airplanes and congested ports. These are common features of the developing world. 

In line with these are physical problems such as dearth of suitably-trained transport managers and planners, capital restructuring bottlenecks, serious issues of institutional reforms and ineffective traffic regulations. The share of transport in the gross domestic droduct (GDP) is in the neighbourhood of three percent (3%). 

Transport statistics are grouped into four (4) basic categories, namely, Rail, Road, Water and Air Transport.

- Rail Transport

Rail transport is usually the most suitable mode of transportation for heavy traffic flows when speed is also an advantage because of the lower cost per person per load as the train load increases. 

Nigeria’s single-narrow-gauge railway line constructed in the colonial period was for many years the only mode of freight movement between the northern and southern parts of the country. 

Because Nigeria's railways are in a perilous condition, the government is trying to rectify the situation by privatizing the Nigerian Railway Corporation.

- Road Transport

Road transport is the most commonly used mode of transportation in Nigeria today. Road traffic depends on the pattern of human settlements, accounting for more than 90 per cent of the sub-sector’s contribution to the gross domestic droduct (GDP). 

Road transport activities involve the conveyance of passengers en-masse or in small numbers, the transportation of animals, farm produce and merchandise and the rendering of mobile services (clinics, libraries and banks).

- Water Transport

Water transport scores a distant second to road transport, with an average share of about 1.6 per cent of Nigeria’s gross domestic product. Water transport is slow and therefore, unsuitable for passenger movement, except for holiday and tourist traffic where time is not a constraint or where other forms of transport are not available. 

Water transport has the following three components: ocean transport, coastal water transport and inland water transport. 

- Air Transport

Air transport has a unique advantage over all other modes of transport if speed, time and distance are major considerations.   Air transport is of high value in relation to weight. It is also preferred where accessibility by other modes is a problem (especially in riverine or mountainous regions).

Of all the modes of transportation, the most used by Nigerians is road transport which is a fact in most countries. Road transportation in any society is meant to be the most easily accessible. People need road transportation for their day to day activities, to commute to their places of work or study, to transport their products, for inter-city and intra-city travel, etc

Taxi and e-hailing services play an increasingly important role in the transportation of individuals in Nigeria's urban centres. The industry comprises traditional taxi services where fleets are owned by a single operator, as well as e-hailing platforms that match independent drivers to riders. 

E-hailing platforms, also referred to as ride-hailing platforms or transportation network companies, digitally connect the driver of a car or other vehicle with a passenger who requires transportation services, through mobile- or web-based applications. 

Drivers pay a commission as a proportion of the trip fee to the e-hailing provider. Fares are dynamic and are adjusted by an algorithm, based on demand and supply for trips. Simply put, if demand outstrips supply at a given time in a given location, riders will be charged more – and drivers will earn more.

E-hailing platforms also offer payment mechanisms for transactions to be settled between drivers and riders on trip completion (including payment options such as card, digital wallet, mobile money and cash).

Nigeria’s e-hailing market is dominated by three (3) major digital platforms, which service the bulk of users in the country. These are Uber, Indriver and Bolt with bolt having sixty-six percent (66%) of the market share.

The global ride hailing market is valued at USD 113 billion in 2020 and is anticipated to reach a value of USD 230 billion by 2026, registering a compound annual growth rate (CAGR) of eight point seventy-five percent (8.75%), during the forecast period, 2021-2026.

In Nigeria, taxi and e-hailing services playing an important role in the movement of people.  Many individuals in Nigeria rely on public or alternative forms of transport. The country’s vehicle-to-population ratio equates to sixty (60) vehicles

per one thousand (1,000) people, which is relatively low compared to countries such as Brazil and China, which achieved scores of two hundred nd forty-nine (249) and one hundred and fifty-four (154) respectively.

Moreover, only forty-one percent (41%) of the eleven million, eight hundred thousand (11,800,000) vehicles in circulation in the country are privately owned and vehicle ownership is largely concentrated in urban areas and main cities such as Lagos, which is ranked highest in terms of the number of licensed drivers (National Bureau of Statistics, 2018). 

Taxi and e-hailing services play an increasingly important role in the transportation of individuals in Nigeria’s urban centres. The industry comprises traditional taxi services where fleets are owned by a single operator, as well as e-hailing platforms that match independent drivers to riders.

In 2020, revenues generated in Africa’s e-hailing industry are estimated to reach USD2.5 billion, with Nigeria accounting for around USD292 million of this revenue and fifteen percent (15%) of the continent’s forty-eight million, six hundred thousand (48,600,000) e-hailing users.

The market for transport services is national. With a population of over two hundred million (200,000,000) people and an estimated national population growth rate of five point seven percent (5.7%) per annum, Nigeria is a large, expanding and sustainable market for transport business.