Lagos danfo cashless payments: why a startup failed

Last month, Lagos State officials hailed a new pact with the National Union of Road Transport Workers (NURTW) and the Road Transport Employers Association of Nigeria (RTEAN) as a historic breakthrough to digitise the city’s chaotic danfo (minibus) fleet. Under the deal, both unions signed on to the state’s Bus Industry Transition Programme (BITP), which folds informal operators into a regulated network with digital fare collection.

But a venture-backed startup named GONA unlocked that exact efficiency seven years ago, only to face stiff resistance from those very same unions.

For many years, the danfo ecosystem — a sprawling fleet of yellow minibuses operated by private owners — has been defined by arbitrary fare surges during downpours, high-speed battles for passengers, and an extortionate governance structure enforced by park bosses (agberos) collecting cash levies at bus stops. 

In 2018, a group of Chinese tech founders with experience at Huawei Africa, Didi, and Morgan Stanley arrived in Lagos intent on disrupting this system. By January 2019, they had launched GONA, a mobile payments app that started by replacing cash-based bus fares with digital ticketing.

To validate passenger behaviour, GONA established a sandbox environment at the University of Lagos (UNILAG), leveraging the campus population’s high smartphone penetration.

The model proved an immediate hit with students, emboldening the company to scale onto commercial city routes, an expansion drive that triggered a cascade of union friction that ultimately determined its future.

The pilot

Branded with bold corporate logos, the danfos on GONA’s network were instantly recognisable among the sea of traditional yellow buses operating along the Yaba–UNILAG corridor. Fare collection relied on in-app scanning of QR codes…