₦airaland Forum

Romeo3:
a brand new 2007 toyota camry bought brand new in 2007 for 6.5 million naira and was delivered in a container and has been in a garage for 10 years cannot sell for 6.5 million.
it is either you allow these people with their failed maths or you stick to the truth you already know.

Curiously, that packed car will sell at even a higher Naira price, after 10yrs. (Price was never N6.5Millon)...
In 2007, a new Camry landed at N3.5 Million ($28K @N125/1$ rate); 10yrs later, the 2007 Toks with well above Zero mileage, is being sold at N3.5 Million.

Catch is your PPP(Purchasing Power Parity), the land sold in 2007 for 3.5Million ($28K); you wont be able to buy with today's 3.5Million($10K).
Vehicles do not appreciate overtime, they depreciate severely, thats why you should be VERY concerned about that "depreciation"

Romeo3:
people do not like the truth.
...................
if you make 60,000 a week that is 240,000 a month and in 12 months it is over 2,800,000 in profit.
with that kind of money, you can change your car engine and car gearbox 2 times a year if they breakdown. that is why i am always quick to rubbish the depreciation claims etc.
if you are making that kind of money and you cannot maintain your car then shame on you.

On a vehicle, the moving parts fail due to friction (wear due to rubbing). ASIDE engine pistons and gearbox, there are several other major moving parts (rotary/linear motion) e.g Shaft, Wheel and all ball bearings, Axle and transmission, Rotors-Brakepads, Alternator, Starter, Steering assembly, AC compressor, Tyres, Water pump, Suspensions/absorbers, Fuel pump, Power steering, Braking system, etc. All these needs maintenance too.

Using a Tyre as an example: A 195/55r15 tyre has an outer diameter of 633mm, thus a circumference (1 revolution) of 1989mm. So, for a 5000miles per 3weeks, means the Tyre would have rotated 5000X1.6/0.001989 = 4million times, every 3 weeks!
More rotation, means more friction, which means more wear out; so that Tyre would need more frequent replacement at high use.

Similar rotation/linear reps can be shown on each of the other moving parts, and most even have much higher rotation; thus more friction, thus more frequent wear out. Each moving part has a MAXIMUM rotation/linear motion to failure.
That Tyre would need replacement after about every 30,000 miles, i.e. 4 new tyres every 4mths!

@Romeo has narrowed wear/replacement concerns to Engine and Gearbox only on any car (or an 11 yr old 207000 km car); this is incorrect
(By the way, "depreciation" really means.... Minimum expected UNTOUCHABLE savings, or you fry!)

GavelSlam:
Frugal nature of the government of the day.
An economy must grow organically.

Frugal, propaganda...or survival:

http://www.vanguardngr.com/2017/05/budget-2017-fg-opec-differ-oil-output/
The norm is for countries to under quote their true production, so they can sell backdoor, above OPEC assigned quota. Its ONLY Nigeria that does the reverse!!!!!! That external reserve, new budget and fx supply to black market are all in serious trouble o.

oxytech:
Above has 56 LIKES!!??..... Una go kill me o, as I comment thus:
....................
Todays Oil production is 1.3mbd and falling; NOT 2.2mbd or whatever propaganda, you are hearing.
2017 forecasted production is 1.5mbd at $53........
.........................
Sadly as Nigerians, their choice is obvious........!!

Propaganda, as earlier mentioned above:
The norm is for countries to under quote their true production, so they can sell backdoor, above OPEC assigned quota. Its ONLY Nigeria that does the reverse!!!!!! That external reserve, new budget and fx supply to black market are all in serious trouble o.

emydexter:
there is ............
servicing; 10k monthly =120k
tyres: 20k *4 yearly = 80k
respray; 60k+ yearly = 60k
shocks: 150k+ 1year depends on ur car model and ur drivers
miscellaneous = 5k mthly ..............
income: 40k *52 weeks = 2,080,000

Just saw the exchanges.... basically each person says/implies: my opinion, believe me, trust me, I just know??
Each partner, have their own "numbers", from their own parcitipation in Uber.

@Romeo3 and OTHERS...Are these given numbers an AVERAGE representation, BEFORE the recent new price war?

CavendishPlex:
Honestly, I fail to understand why guys can't do simple maths to understand that with these new rates whether Taxify decides to take zero percent (0%) commission or Uber takes its 25% commission, it just doesn't pay anymore to be on the road.

My take is only the stubborn ones will decide to brave this slavery, but only time will tell how many of them will continue with Uber and Taxify. Even Oga Taxi now has similar rates (N200 base fare/N5 per minute/N55 per km).

Let's see how far they can go when they are no longer able to meet up with rental fees/fuelling/maintenance costs and personal obligations.

I have 2 cars I personally drive registered with the 2 dominant companies, but I'm no slave to enrich anyone. My cars are off the road until such a time when Uber and Taxify decide to have a brain reset to default.

This Math again??
You can lookup some Uber analysis I (oxytech) posted earlier. The Math then, now, or in future, just don't add up.

The winners are Uber and drivers, but Car owners may lose out eventually. Effect, though delayed, may show up after about 1-2yrs.

There is one sneaky brother you guys are ignoring-"Brother Inflation"!

Headline inflation reduced in February and March, but don't smile; its just a distortion error, due to base effect of 2009=100.
Nothing is reducing! Short term, its safer to look at the month on month.
e.g. Food sub-index rose from 1.29 in Jan, to 2.21 in March: thats a 70% increase in cost of food since January.
Meaning: that 40K "delivery" that used to get you 10 Bowls of Gari in January, can only buy you 3 Bowls now!

Similar, (but of less % loss), would happen to car parts, oil, tyres, etc. - operating cost is increasing.
The Double whammy now is that; though inflation is chopping its own, now the 40K income is about to even reduce, on top.
Counting money........but you are actually getting poorer o!! ........ (see you in 1-2yrs)

Nigeria’s fast growing external reserve is great news but it has left many financial analysts trying to explain the reason for the high-speed growth in reserves.
The country’s external reserve has grown by a minimum of $5 billion, since 19 October 2016.

In January alone, the external reserve is estimated to have risen by an average of $2.3 billion.
The country now has $31 billion in its reserves, according to Godwin Emefiele (CBN), on 25th April 2017.
Analysts are trying to understand the reason for the high-speed rise in the external reserve.

Though higher crude oil prices and higher production figures due to Niger Delta peace has contributed to the rise in reserves,
calculations indicate; that could not account for all the sudden high inflows into the reserves, especially since a lot of dollars was being used for the recent forex interventions.

Even with the $600 million African Development Bank loan and $1.5 billion Eurobond loans; figures still do not seem to add up.

Do you have any suggestion to why Nigeria's external reserve is increasing so rapidly; and can it be sustained?

.

Truth234:
Amoto94 can you space it?
This is a general misconception, the CBN do not withdraw from the Foreign Reserves and in fact has added about $500 million in the last two weeks -- $75 million this week alone.
For the record, the money the CBN is auctioning is in accordance with 2017 budget provision -- official exchange rate of N305 with the oil benchmark pegged at $44 a barrel. Therefore, it is part of N2.2 trillion stipulated in the 2017 budget to come from oil revenue.
The subsidised rate is still above N305/$ official rate, commercial banks are directed not to sell more than 20% above the official rate, which is about N375/$. This fund is needed to fund capital projects in Naira and not dollars. Hence, the exchange.
So whether we can sustain it or not, 2017 budget must be funded, either through loan or revenue generation. Let just pray militants continued to yield to the agreement.

Above has 56 LIKES!!??..... Una go kill me o, as I comment thus:
FIRSTLY:
2017 Budgeted Oil revenue is $6.5B (N2Trillion) = 20% of (2.2mbd x 365 x $42.5 x 305)-ONLY for pro-rata purpose below.

Todays Oil production is 1.3mbd and falling; NOT 2.2mbd or whatever propaganda, you are hearing.
2017 forecasted production is 1.5mbd at $53.

Forecasted 2017 Oil revenue is $5.8B (N1.7Trillion) using above pro-rata of 20% of (1.5mbd x 365 x $53 x 305).
So as it stands, there is already a $0.7B forecasted shortfall in dollar revenue.

SECONDLY:
All Nigeria's foreign earnings (that $6.5B plus the others shared to States & Local govt in Dollar form) are already inputed into your international balance of payment ($export-$import) calculation, and its shown that you have a Current account deficit of -3.8% of GDP, which would need to be eventually financed by FX reserve draw-downs, or borrowing.
So, you do NOT really have this dollar free at hand to give the forex market!!
With a projected 18% jump in import component due to dollar liqudity, the worse the Current account deficit, so larger FX reserve draw-downs or fx borrowings needed.

THIRDLY:
Because of only 1.5mbd production, lower company tax revenue, custom duty, etc, the N5Trillion total Budget revenue will not materialise. The projected budget deficit of -2.14% will get larger; so more borrowings again

At the end of the day, it will boil down to either devalue now and loose 2019 election; or borrow to win 2019 and face IMF plus worse devaluation later.
Sadly as Nigerians, their choice is obvious........!!

ISTANDWITHBUHAR:
I don't care about how you see it or if you are praying for all this to fail, All i care about is it's gonna be sustain and your prayer for the Govt to fail won't work..

"I don't care...! prayer!"....its just arithmetric, not about my desires
Am pro Buhari too, but silence never brings correction....
Well....

(Correction...N0.4T left=N400billion)

plaetton:
I am sorry for your naivety in thinking that it is the government's job to sustain the value of the Naira with commensurate dollar supply. Nothing could be more foolis on the part of the government, and guaranteed to always fail.

The government's job is providing and maintaining policy initiatives that stimulates local productivity and that boosts confidence im the economy and the Naira. A nation's currency is a default measure of per capita productivity, not how much dollars it can sell to banks per week.

Haven't you heard of the forces of demand and supply ?
If it was as simple as you paint it for the government to sustain the value of the Naira through forex sales, then from what they have sold over the years, the dollar and naira should be at parity.

I don't understand why some of you who should know better choose to continually cast blames on invisible speculators ?
Who are these invisible speculators that you conveniently scapegoat for ad-hoc policy failures of the government ?

First of all, there are speculators in every currency.
That's why it is call the Forex MARKET.

It is a $6tr daily market that every country and every financial institution participates in.

Now, in the case of Nigeria, the government's haphazard, flip flop, schizophrenic policies create huge GAPS that inevitably attract and invite currency arbitrage, from the street malams, the businessman, the government officials and Banks, all seeking profit and self-preservation. That is the rule of the marketplace.

Imagine, speculators!
Well put....You go beta school ....your head dey work well, well o!!!....Kudos!!

kjhova:
Well, at this stage we digress from the original post. Moreso, we are now only dealing in speculative opinions and can only go on and on. We will hopefully have this discussion on another forum.

You are very right....Economics is not a perfect science, just "best" speculation, at the end of the day.

CBN can "sustain", if oil production is stable, and oil price is mid range, but this could lead to a very big WELFARE loss, overtime.
This WELFARE loss should be our main concern, not just sustaining the numeric rates, by borrowing.

If no other significant source of dollar supply (nobody wants to come because of controls, etc), larger borrowing will be needed as the current account deficit grows larger. (Also, we wont get a "$139 oil price to balance the budget deficit"-Fitch).

Adding more borrowings to our debt servicing/revenue ratio of over 32%; means we can not sustain servicing any more additional debt. Soon, only IMF will be willing to lend to us at a CONDITION-restructure.
This could mean: low growth, high inflation, or back to "SAP"; both leading to a Welfare loss for you and I, AFTER 2019 .

I compared most of the key economic indicators of Nigeria, most top countries and fast growing/rated African countries; and it was surprising to see that Nigeria is at shoulders, with mostly similar or better fundamentals. Even the toothpick, importing/exporting, losses to corruption, etc, propaganda (am pro Buhari) were within range, and better than most countries.

The only conclusion I reached was that: our new, unstable "MARKET ECONOMY" is not well developed enough, as the key BASELINE principle of demand-supply equilibrium is distorted, so most further referencing from such false baseline will be distorted.
I would, posit that DEVELOPING nation especially with non floating economies should treat economic indicators as nominal, and add a "developing factor" for real values. Investors view us in that light anyway, so we do not need to keep fooling ourselves with good indicators, and quickly start making harder decisions, than waiting in vain.

Most developed economies can attract a lot of capital flows to buy securities. However, a developing economy may be more vulnerable because investors may be quicker to fear an economic downturn and remove their capital, EVEN THOUGH with similar negative economic indicators - risk?

ISTANDWITHBUHAR:
So you mean capital project are executed and paid for in dollars? I doubt that.. Beside we seel our stuff in dollars and bring the dollars into the country. As dollars is not our official currency, it will be sell to people that need it for personal use..

As a matter of fact, the currency used is not important in the math calculation. As long as you stick to only one currency, the math is the same.

Moreover, there is no money left, just 400million NAIRA. Also, we have a deficit of 2.36Trillion ($7 billion) we intend to borrow; and we have only secured $1.5 billion.....

kjhova:
Your suggested cause of the FX rate increase and inflation is reasonable however it will be worse than simplistic to assume that this alone was the reason for the recession.

Uncertainty about fiscal direction can impact on economic growth rate but this is often marginal and short termed. The factors of a depleted foreign reserves, falling oil prices, debilitating war, militant disruption of oil production, looting of the commonwealth by government officials etc are more likely to send an economy into downward spiral faster than sentimental views.

Truthfully, Buhari made an already very bad situation he inherited, worse......
When Buhari took office as compared to 1999 (irrespective of the leader then), all the following you mentioned were present (depleted foreign reserves, falling oil prices, militant disruption of oil production, looting of the commonwealth by government officials etc).

NOT Short term uncertainty about fiscal direction can impact on economic growth rate, but this is often NOT marginal, and NOT short termed. Buhari LONG TERM uncertainty, and flip flops are legendary!

Coming back; when the subtly SENTIMENTS (a view or opinion that is held or expressed on Market economy, ETC ) kick in:
"Hot money" (FPI etc) first flies out very very quickly; if not quickly stemmed fast, then FDI's follow slowly. Then international ratings are lowered..... your balance of payments gets hit.

You end up with a current account deficit, which has to be financed with a capital account surplus, from borrowing! This would hit inflation and interest rates simultaneously. If you now add unguarded threats to militants, who increase oil disruption, you then get a full blown economic crisis, as your current deficit is larger.

Getting out of a mathematical Recession is not even the issue as; its just a % comparison between GDP within 2 periods, which militant oil disruption is responsible for the less export component. The problem now looks like STAGFLATION!!!.............

ISTANDWITHBUHAR:
Sure they can even more than that, We are generating about $127.600.000 daily so you should calculate what we can generate in a week and pumping half of that into the market won't affect our reserve. beside They will only sell and get back the money n Naira and will be use to finance the budget..

Really?
So how do you do capital projects and develop your infra-structure, if all has been spent to subsidize the dollar.
Of Nigeria's 5 Trillion forecasted budget revenue (not yet met); 60% is on Recurrent expenditure, 32% on Debt servicing. Left 8% (N400billion) peanuts is left!..... Wake up o!!

ISTANDWITHBUHAR:
You get sense jare no mind those thinking it won't work not knowing it has been a plan of the Govt to start selling dollars immediately our reserve hit $30billion and that start now..

As factories sell more, produce more, they will demand for more $. Retail importers too will re-stock more,, as better sales due to good margins, at lessened cost. More kids will head abroad to school, as its now affordable. Result is: higher dollar demand, at flat supply!!....so where do you think you are going with this? ........dollar rise!

It a 2019 re-election policy; the pain awaits, as its just being delayed!!!

porozhniy:
I believe a short term intervention by the CBN is the way to go since crude prices are above the 2017 budget benchmark.
Let's all hope that Dangote's refinery comes on stream by Q2 2018, else we are screwed.

We are all screwed already....so do not wait till 2018! When Dangote comes due to cost of funds, lack of competition and protectionism; import substitution eventual does not improve welfare. Like rice and tomato, Govt will loose duty etc and you will still pay 185 per litre or more!

kjhova:
All this talk of a mythical reserve threshold of $30B to $35B is nothing when the economy is falling to the dogs. For this reason, the CBN is right to intervene in the market now rather than wait to shore up our reserves. Anyone abising Emefiele probably has shallow knowledge of economics.

The forecast is that oil prices will likely continue to push upwards, albeit marginally, in 2017 and this is good as the current price is already higher than our budget benchmark. It is also reasonable to assume that militancy in the Niger Delta will remain in check permitting continued crude production above the 2mbpd mark.

Since our economy is still very much import dependent, it makes sense for CBN to pay heed to the exchange rate of the principal currency of importation, which is the greenback. The apex bank will be able to intervene in the FX market while concurrently building up our reserves.

Curiously, in 1999 when Obasanjo came in, Oil was $17, Reserve was $5.4billion, rate was N92!
You know why?

Sentiments (shortlived "goodwill", plays the primary key role in your exchange rate (the demand or not for your Naira!). Buhari messed up, by sending a signal that he was statist, non-market oriented and fx controls freak.

Once sentiments is negative, others follow and hit you hard: balance of payments to inflation, to interest rate, to Debt, to stock market, to speculation....in that order!

ONLY Solution: go back and correct the sentiments, or...."change"

zomoears:
Very true.
Venezuela is down to $10bn reserves and most of it is in gold. They didnt know when to cut off subsidies,and it is haunting them now.

The Nigerian govt was right by removing subsidy on petroleum products. Else d fight would have been too multi faceted for d govt to cope.

Try balancing subsidy on petroleum products with defending d naira amidst high borrowing cost for govt (14% mpr)...govt would have had a much worse crisis by now.

A country like Nigeria needs reserves in d region of $35bn.

Subsidy has "sneekingly" been returned...... Oil importers rate is 285.
Official is 305

Truth234:
No, not the recent intervention. It is not from our foreign reserves but oil revenue generation. People should know the difference.

Here is a link to CBN foreign reserves statement https://www.cbn.gov.ng/IntOps/Reserve.asp?MoveDate=3/2/2017%2011:44:07%20PM

Funny you ..... whats the difference??
Money in my wallet, money in the Bank?.... what counts on this occasion is; there is an outflow!

jpworld:
As far as a car is on the road every day, travelling from one bad road to the other, it will surely get old faster; the best way is to make sure you maximize your profit within the first 6-12months,
Even if you take 20k a week, the driver will surely try his best to maximize his own profit and still destroy the car, if people are taking off their car from Uber to sell, it’s not because Uber is not lucrative, it’s simply because drivers will always take advantage of owners, who don’t do pay as you go.
If Golf3 sold for 600k use for normal kabukabu in Ajah can be delivering 18k-21k weekly, then why can’t a Toyota Corolla sold 4 times the price of golf3. Deliver 50k weekly.

eghuan1:
This your analogy doesn't fit. If the price of the car is what you use in determining returns, then there's a problem. You could have simply bought a Ferrari or a Porsche so you get a higher weekly remittance

Nope, it literally fits.....
Logically, your % increase in Investment, should at least tarry with your % increase in Returns. If it does not, you missed the hole...or you had better have a gain in investment risk (lesser risk)!..

If not, whats the point; just buy four Golf3's, and make more money!

below

obarasqie:
Good morning guys,
I am planning on starting the Uber business in Lagos, but i need some advice from the guys already in the system.
1. Which car is good for the Uber business in terms of fuel consumption and maintenance.
2. Where do i get a neat used Car for purchase and what range can i get it.
3. Do you advise hire purchase or get a driver to drive for me.
4.If i get a driver, how much can i make per week(excluding fuel, Maintenance, and uber 25%).
Thanks
appreciate any adverse given concerning these.

Noticed it a lot here.... and I sometimes don't get it o!
You can see this thread has 51 pages and you just do not want to waste your time to read, but want the money quick quick! Try read small....... all your answers are here!

emydexter:
there is profit but it all boils down to the driver management and the car tolerance quality. I drove a corolla for months and i never visited the mechanic except for servicing which insisted my partner do every month. hence he had his weekly returns of 40k every week with only 10k spent on servicing monthly and changed tyres twice, tokumbo, not new. until car got impounded by customs for import duty issues. switched partners to a kia rio. my assessment, best car wen it comes to fuel management, overall, worst car for uber, engine amd components not durable. had issues with the AC so frequently, too low to the ground, and if u drive around lekki and its waterlogged environment, the compressor gets spoilt by the water. kept fixing that every month till I dropped it december.
summary, if ur driver is good and ur car is in good condition, u make profit. to minimise repairs frequency he should stay outta lekki and ajah areas especially when it rains.

expenditures(with good driver n car)
servicing; 10k monthly =120k
tyres: 20k *4 yearly = 80k
respray; 60k+ yearly = 60k
shocks: 150k+ 1year depends on ur car model and ur drivers
miscellenous = 5k mthly

profit calculation.
income: 40k *52 weeks = 2,080,000
expenditure; 120+80+60+150+60= 470,000

profit =N1,610,000

if I missed amything, anyone pls indicate
best advice: do drive to own aka hire purchase. has zero losses.

"if I missed anything, anyone pls indicate"
Hhmmm.... missed just some "tiny" bits:

In addition to my previous post, let us fact-check to see if you are actually better off ("welfare" gain/loss), after 4yrs:
1. You, didnt depreciate your equipment(Car) as it will wearout, "die"(salvage value=0), and need replacement in say 2-4yrs. Lets be very
optimistic and say 4yrs.
So, on Camry 2.4 Million/4 = 600K depreciation per yr.
2. Cost of funds - 2.4Million to buy the car before or now, did NOT drop from the sky! You should treat it as borrowed money; at today's rates
its 27% for transportation sector at Diamond bank. But let's assume its dash money, but we deduct only 18% income loss, as you could have
invested in treasury bills(FGN saving bonds) and get 18%. So, we deduct 18% of 2.4Million = 432K as interest/income loss.

So, actual profit = N1,610,000-600K-432K = 578K per yr. In 4yrs, equals 4x578K = 2.3Million(profit).
Total at Hand (saved) in 4yrs, BUT with no car = N2.3M+ 4yrsx(600K+432K) = 6.4Million.

If a MR SAM, was dashed the same 2.4Million, but buys treasury bills at 18%, rolls-over the capital and yield over 4yrs, he gets 2.4M+0.4K+0.5K+0.6+0.7 = 4.6Million.

After 4yrs, you would have earned 1.8Million (6.4M-4.6M) more than MR SAM. That's 8.6K more, weekly. (1.8/(4yrsx52wks)).

Now, the Uber business needs serious MANAGEMENT, so you are suppose to deduct this, even if u are the Manager; as it is an effort u could have put into something else, or hire someone to do.
Minimum Manager wage would be about 40K, that's 9K (40x12/52) a week.

Summarily, in 4yrs you, now on a "Pace-maker", are financially on the same spot (8.6K-9K=0) as Mr SAM who has been smoking Cigar, Pina-Colada, on the Beach, with his new.......
If realistically assumptions below are used; in 4yrs, you fit "park Jeep for Third Mainland Bridge" o!!!

Ambitious assumptions:
1. Car mostlikely will not survive up to 4yrs of uber punishment. Higher depreciation, less profit.
2. No Down times, repairs, etc- its impossible to have a regular 40K income for 208wks (52x4).
3. What about accidents, towing, lasma, etc in 4yrs?
4. Cost push inflation would increase cost of parts and repairs, so higher contribution, less profit.
5. Even if Uber compensates and increases price over 4yrs, service increases are always less than product price increases.
6. Saturation is occurring as more cars join Uber, leading to less call outs so less income, less profit.

TokyoBulls:
@oxytech. Perhaps you missed this. Could you provide responses?

Tokyobull....u don't want sleeping dogs to lie!

Well, I replied U-see August 5th post.... "I stumbled on this site whilst researching about UBER profitability, because someone asked.
As I posted and calculated earlier, there could be some small profit there, so its up to the individual.
All businesses carry different success risk (High-Med-Low), this Uber one is High risk at Low profit-bad combination.(should be High to High, Low to Low).
........

Firstly, I used ONLY your (Tokyobull) given data, and Uber fare rates in ALL my analysis.

The biggest mistake we make in Nigeria is ignoring analysis! U mean I must do Uber trial-and-error to qualify to assess it? What can I say, when even our Buhari doesn't even believe in analysis.....imagine, he said we have to let the economist to have their way, after 14mths!!
U mean a Soldier was running the economy since!! Its now too late, "Market" (investors, ratings, etc) does not trust us, or our soundness!
....5days to destroy, takes 5yrs to build.

To UBER: Some are mistakenly judging Niga Uber success based on the "Law of averages", instead of the "Law of Probability":

The "law of averages" is an ERRORNEOUS generalization of the law of large numbers (of Uber drivers)‎, which states that the frequencies of events with the same likelihood of occurrence even out, given enough trials.
An example of how the law of averages can mislead involves the tossing of a fair coin, if someone tosses a fair coin and gets several heads in a row, that person might think that the next toss is more likely to come up tails than heads in order to "even things out."

But the true PROBABILITIES of the two outcomes are still equal for the next coin toss and any coin toss that might follow. Past results have no effect whatsoever: Each toss is an independent event!!

Some people here will succeed in UBER, others would fail!
The Probability of failure is much higher, than the Probability of Success.
How Probable is the success of a business, is what should concern an investor! High risk, should be High returns; Low to Low is questionable!

eghuan1:
Please I will like to be added to the WhatsApp group. My number is 09083368409. I am Uber driver currently on hire purchase though I have an issue with my current car owner. I am a partner driver but not the owner of the car

It would be informative and appreciated, if you could pls share with us some of that issue, and any other troubling issues? Also, when you finally own this vehicle, would you continue driving it yourself, or have a partner driver, and why?.... Tx!

cecegorz:
Your analysis looks so sweet on paper, the downside is that this 2010 Camry cannot maintain this weekly delivery for 4 straight years.
With the intense firing of the Engine non-stop and constant engagement with other road users in Lagos, i think the car can only deliver this premium for a maximum of TWO YEARS!
In the subsequent two years, it will be spending more time at the mechanic workshop, thus halving the expected income.

Hope I was not misleading.
I read 10 pages before my first comment and lots of people seemed excited, others lured others, so didnt want to bust the optimistic bubble, since as they say; anything is possible.

If you read this in conjuction with my latter 1000km comment; on the road 6days a week, for 2yrs, is even tricky..... not to talk of 4yrs!

Also, you see that depreciation saving of 57K, you mostlikely wont diligently save or make, and mostlikely end up without a car after 4yrs....or 2yrs.
If I should use that 2yrs you suggested for my calculation!!!!.... some persons here, will fry me!

kollected44:
thanks for the early morning laugh.

Your views are well appreciated and valid, but so are tokyobulls as well.

Despite the challenges, bottomline is that the business can be profitable even though the profit margin might not be much when you are just starting out. My own advice is if you cant drive the car yourself, then have other investments/pursuits outside uber. If it were in the west where there are good roads, relatively stable fuel prices, stable currency, and all that, it would have been easier to run the business. Yes, Nigeria has a very unstable economy that is affected by many frequently changing variables, but that is not to say Uber cannot be profitable for the common investor. Uber should also look towards reviewing their prices a little upwards in the near future, and understand they are not just to please the customer but the investors as well. the business terrain here is very different from that in the west.

I stumbled on this site whilst researching about UBER profitability, because someone asked.
As I posted and calculated earlier, there could be some small profit there, so its up to the individual.

All businesses carry different success risk (High-Med-Low), this one is High risk at Low profit-bad combination.
If you want to eat frog, order the one wey get twin eggs!

By the way, am not always pessimistic, if you wish to OWN A HOME cheaply one day, just click on my name above (oxytech).
I just saw, I made a helpful comment... 9yrs ago!!

TokyoBulls:
@fanex, @oxytech, @kollected44. Let's keep it simple. Uber is profitable for the investor. I have been on the platform and made (and I am still making) profit. Investment analysis is not that complex. And while I see many naive partners who do not appropriately depreciate their cars and strongly advise anyone considering taking an auto loan just for Uber to be cautious, the question I ask partners who burn down the business over analyses is, 'Why have you not left Uber?'. The net profit margin may be small now but there's profit to be made and if you run it very well, you will make money. I am more interested in being more efficient and firm than in a totally negative picture.

With a solid group of drivers on Uber and cars in good working condition, you will make good money. Your Thursday/Friday bank alerts are good enough to make you want to seek better ways of doing the business. If Baba Wasilat driving yellow cab makes profits, we must. It's about the HOW.

Uber fare: "N400/trip + N90/km + N9/min"

Assumptions: 6 working days, 15 Trips/day, Average speed 40km/hr=0.6km/min, so "1min=1.7km".
Remember Gross earning BEFORE 25%Uber deduction = 134K per wk.

Above, "N9/min" = 1min=N9
Above, "1min=1.7km"
so N9=1.7km, so N5=1km.

So: Uber fare = N400/trip + N90/km + N5/km = N400/trip + N95/km.

To get 134K per wk = N400x15x6days + N95 x km/wk
So: km/wk=1031km - Your nice Car would do about 1000km every week to make 134K Gross!!

Your mileage after 4yrs will have an ADDITIONAL 1000x52x4 = 208,000 Km, with wear and tear!!

After 4yrs of intense UBER use, the now 10yr old Car (2020-2010), will be Scrap!!
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Other un-included cost (one off/yearly): 10% miscelleneaous, Certificate of roadworthiness, Vehicle licence, Insurance-60K, Uber Background check-20K,
Certificate of Incorporation, Phone, etc.

Other downs: Uber relaxing car entry limits (2006 now) and fare; more frequent repairs over the yrs so more down time; increasing fx/inflation effect on
cost of: Parts, Tyre, Fuel, Engine oil; loan increase with MPR increase; more frequent 5000km servicing; etc.

Drivers: In this non-compassionate, survivalist clime, with desperate and challenged reasoning, the Drivers will kill you!!
Chances of getting a "good" SALARY ONLY driver, could be as bad as 1 out of 50!

Drive UBER yourself, or start fasting!!

If I add a detailed health/risk cost benefit analysis for you, after 4yrs; UBER business could reduce your life expentancy by 4-8yrs....and Divorced!!....
("Carless", financial Loss, Accidents, Police matters, traffic fines, Anxiety, BP-Cardio, Drugs, Less sleep.... etc).

AUG 2016:

@Fanex maybe spot on. @Tokyobulls is quite optimistic!
I would suggest you do UBER only if driving it yourself, or happy with conclusion below:

Based on data here:

Assume 2010 toks Camry bought at 2million.
Estimated average gross earning: 100K per week, after Uber charges.

Average driver salary: 20% of gross 100K = 20K p/w
Fuel: 30K p/w
Toll, Data, Carwash: 10K p/w
Maintenance: 10K p/w

Depreciation (inflation included):
A=P((1+i)n x i)/((1+i)n - i)
On 2million, 4yrs, inflation 17% - i.e. i/mth=0.01317
The Depreciation per mth = 57K per mth = 15K per wk.

TOTAL=20+30+10+10+15=85K per wk.

-----------------------------------------------------------
PROFIT = 100K-85K = 15K per wk = 60K per mth = 720K per yr.

CONCLUSION:
What this means is that in 4yrs time (2020), you would have earned 2.88 million, and will have a newly bought 2014 toks Camry (depreciation savings)!!

Ban is in full FORCE!

This Xmas has never been like this.

Beware Customs could burn you!!

MNET could not have been that stupid-from the onset those guys were told to sign that they will not sue [/b]them for anything!!
So lawyers, I beg down tools!

If you signed your rights and dignity away, without duress, for ordinary 12million Naira, then face the music of what your eyes see. If you won you would not have shared it, so its your choice, your life- you signed!!

You guys can not be serious, African culture, morality, values??
Are you guys living in the same Niga? [b]Or are you one not "in town"?
The only African value is "hypocracy"- pretence.

The reality of our Niga values today is FAR FAR WORSE than what MNET has done.

In 1988, you would be very bold to just walk up to any unknown Uni-girl to invite her to a party-just to dance o, no blues! In 2007, with one phone call you can get 20 unknown real University nice looking girls to do ANYTHING.

Believe me, na LEVELS. ANYTHING!!!!!

Did you notice that in all the relationships the ladies "toasted" all the guys!! ?
Most young Niga girls prefer married men when exposed to a smooth well mannered one, so no surprise Richard won.
With ring in hand, the ladies screamed and voted for him.

Times have really changed, and Africans are just religious hypocrites!

Thats why the white man pass us, he does not deny it, he studies the change and provides normal solutions, checks etc.

We stupid African, na ban!!,
Denials, no acknowledgement thus no solution or progress just more and more under skin rot.

Pls talk of [b]human rights of Ofunneka [/b]instead, and not that nonsense African culture, morality, rouge values??