Project – EVALUATION OF ROAD UNION ACTIVITIES ON COMMUTERS’ TRANSPORT FARE IN NIGERIA

CHAPTER ONE

CHAPTER ONE

1.1 Background of the Study

Transportation plays a vital role in the economic and social life of any nation. In Nigeria, the road transport sector remains the most dominant mode of transportation, accounting for the majority of passenger and goods movement across the country (Wojuade, 2021). However, the cost of road transportation has been a persistent concern for commuters, especially in the wake of rising inflation, fuel price deregulation, and the influence of road transport unions such as the National Union of Road Transport Workers (NURTW) and the Road Transport Employers Association of Nigeria (RTEAN).

These unions perform critical functions including organizing drivers, managing motor parks, regulating access to routes, and maintaining order. Nevertheless, their activities have also been associated with multiple levies, extortion, and informal fees that often inflate the cost of transport services (Punch Newspapers, 2024). In major cities like Lagos, Abuja, Port Harcourt, and Kano, commuters regularly complain that daily ticketing, “loading fees,” and unreceipted charges demanded by union agents (“agberos”) substantially increase fares (Guardian Nigeria, 2023).

According to The Guardian Nigeria (2023), multiple dues collected by transport union agents can raise transportation costs by as much as 25%. Similarly, Punch Newspapers (2024) reported that union extortions and daily ticketing worsen travelers’ woes, particularly on intercity routes. Such practices contribute to fare inflation even when fuel prices remain stable or decline. This pattern suggests that union activities may have an independent and persistent impact on fare determination.

In Lagos State alone, union-related collections reportedly generate billions of naira annually, a significant portion of which comes directly from daily levies imposed on commercial drivers (Economic Confidential, 2021). As drivers pass these costs on to passengers, the burden ultimately falls on commuters. Even when the government intervenes with fuel subsidies or fare reduction programs, the effect of such policies is often undermined by persistent union charges (Independent Newspaper Nigeria, 2025).

Therefore, evaluating the extent to which road union activities affect transport fares is crucial for developing fair, transparent, and sustainable transport policies in Nigeria. Understanding this relationship can help strike a balance between maintaining the welfare of transport workers and protecting commuters from exploitative fare increases (Wojuade, 2021).

1.2 Statement of the Problem

Commuters in Nigeria are increasingly burdened by rising transport fares despite occasional reductions in fuel prices or government interventions. While macroeconomic factors such as inflation, exchange rate fluctuations, and maintenance costs are well-known contributors, the specific impact of road union activities remains less studied (Guardian Nigeria, 2023).

Many drivers and operators claim they are compelled to pay multiple daily dues and informal levies to union officials at various points—motor parks, loading bays, and even checkpoints along routes (Punch Newspapers, 2024). These costs, though often undocumented, are incorporated into fare prices, meaning that passengers ultimately pay for them.

Moreover, the lack of transparency in union financial practices has led to public concern. In some instances, commuters have accused unions of manipulating fare prices during crises (Independent Newspaper Nigeria, 2025). The challenge, therefore, is determining how much of the fare level can be attributed directly to union activities as opposed to legitimate cost factors like fuel or maintenance.

This study addresses this gap by evaluating how the actions of road transport unions influence commuters’ transport fares in Nigeria, identifying the extent of the relationship, and exploring possible regulatory and policy implications.

1.3 Objectives of the Study

The main objective of this study is to evaluate the effect of road union activities on commuters’ transport fare in Nigeria.

The specific objectives are to:

1. Identify the types and nature of dues, levies, and fees imposed by road transport unions on operators.

2. Determine how union-related charges influence the cost of transport fares.

3. Compare the influence of union-related costs with other fare determinants such as fuel prices, maintenance costs, and inflation.

4. Assess commuters’ perceptions of union activities and their impact on transport affordability.

5. Recommend policy strategies for improving transparency, accountability, and fairness in union practices affecting transport fares.

1.4 Research Questions

1. What types of dues and levies are imposed by road transport unions on operators?

2. How do these union-related charges affect the fares commuters pay?

3. How do union activities compare with other factors (fuel, maintenance, inflation) in determining fare levels?

4. What are commuters’ perceptions of the fairness and necessity of these union activities?

5. What policy options can ensure that union activities do not unduly inflate transport fares?

1.5 Significance of the Study

This study is significant for several reasons.

First, policy relevance: The findings will assist government bodies such as the Federal Ministry of Transportation and State Transport Authorities in designing effective regulatory frameworks to control union levies and protect commuters (Guardian Nigeria, 2023).

Second, academic contribution: The research will add to the literature on informal transport regulation, union economics, and the intersection of formal and informal governance in urban mobility systems (Wojuade, 2021).

Third, social importance: Since most urban commuters in Nigeria are low-income earners, reducing unnecessary fare inflation directly improves household welfare and access to education, employment, and markets (Punch Newspapers, 2024).

Finally, policy accountability: It will help make union operations more transparent, fostering a transport environment where cost increments are justifiable and evidence-based rather than arbitrary (Independent Newspaper Nigeria, 2025).

1.6 Scope of the Study

• Geographical Scope: This study will focus on selected major Nigerian cities—Lagos, Abuja, Kano, and Port Harcourt—where unionized commercial transport dominates.

• Temporal Scope: The analysis will cover the period from 2020 to 2025 to capture the recent deregulation of the oil sector, subsidy removals, and inflationary trends.

• Operational Scope: It will examine both formal and informal union activities (levies, ticketing, and dues), transport operators, and commuter experiences in relation to fare determination.

1.7 Definition of Key Terms

• Road Transport Union: Organizations formed by transport workers and employers to regulate operations, protect members’ interests, and manage transport routes (e.g., NURTW, RTEAN).

• Union Activities: Actions by unions including ticket sales, dues collection, park management, and enforcement.

• Commuters: Individuals who regularly use public or commercial transport for daily movement.

• Transport Fare: The amount paid by passengers for transport services.

• Informal Charges: Unofficial, unrecorded payments made to union agents or touts.

• Pass-Through Effect: The extent to which operating costs (including union dues) are transferred to commuters as fare increases.

1.9 Research Hypothesis

Based on the background, literature and problem statement, the following hypotheses are posited for empirical testing:

• H₀: Road union activities (including formal dues, levies, and informal charges) do not have a significant effect on commuters’ transport fares in Nigeria, after controlling for fuel price, vehicle maintenance cost, inflation, and regulatory fees.

• H₁: Road union activities (including formal dues, levies, and informal charges) have a significant positive effect on commuters’ transport fares in Nigeria, even after accounting for fuel price, vehicle maintenance cost, inflation, and regulatory fees.

1.10 Organization of the Study

Chapter One introduces the topic, problem, objectives, research questions, significance, scope, and hypothesis. Chapter Two will review in detail the theoretical and empirical literature on transport fare determinants, union activities, and fare policy. Chapter Three will describe methodology: research design, sampling, data collection and analysis. Chapter Four will present results and discussion, examining how union activities contribute to fare levels. Chapter Five will conclude, giving policy recommendations and areas for further research.

Project – EVALUATION OF ROAD UNION ACTIVITIES ON COMMUTERS’ TRANSPORT FARE IN NIGERIA