To say that the rise in popularity of meter-taxi and ride-hailing services in recent years has disrupted the traditional cab-hailing industry is an understatement. Drivers of the long-serving Lada taxis have been experiencing a devastating decline in business as Addis Abeba's residents increasingly looked to services from the taxi-hailing companies to meet their transportation needs over the past few years.

As these tech-based taxi services gained more and more ground, Lada taxi drivers found themselves marginalised, with their slice of the pie growing thinner by the day. Many of these drivers are still around, trying to make the best of a bleak situation. In contrast, others have given up their blue-taxi trade in favour of signing up with their seemingly victorious competitors.

Mikias Meressa, who used to earn a living driving the signature blue taxi, was no exception to the struggle. Hoping to seize the opportunity to acquire a better and more modern car, he struck a deal with O'clock General Motors and many of his peers. The opportunity in question presented itself three years ago when O'clock General offered 65 Lada taxi owners' associations a chance to purchase new cars through loan schemes.

Mikias was a member of one of the associations whose members made a downpayment of 25,000 Br after being convinced that the deal was worthwhile. They were initially promised that they would have their vehicles within a few short months.

The few short months went by, then a few more, and the members were asked to pay an additional 260,000 Br, according to Mikias.

"Some opted out of the deal at this point, but dozens of members made the payment," explained Mikias, who sold off his vehicle to be able to afford the second payment.

After having made a deal with the Lada taxi associations, the company was lobbying for tax exemptions, according to Shemsedin Abdurahman, CEO of O'clock, which was established in 2006.

When that route faced a dead end and the cars they promised to import seemed too expensive, O'clock resorted to the car assembly business, according to the CEO.

"O'clock has collected downpayments from some 200 association members, around 60 of whom have asked for their money back since," he said. "We returned their money, including the VAT cut."

After frequent disputes and deliberation, the members who were not comfortable with the situation took out their money with some of those who had sold their Lada vehicles working odd jobs like becoming security guards to make ends meet.

Three years have passed since they made a deal with O'clock, and none of them have received their cars. But that is not stopping the company from launching new loan schemes to attract drivers like Mikias.

O'clock is currently in partnership with Hello Taxi and is importing car parts free of tax and assembling them at its factories, according to Shemsedin.

O'Clock's partner, Hello Taxi, started as a taxi-hailing service and launched its plan to expand into the vehicle import arena in 2020. The regular working day at Hello Taxi's office in the Gerji neighbourhood is hectic. More than six employees work at full capacity conversing with customers, most of whom are waiting to receive serial numbers for the parts being acquired from a manufacturer in China. One of the clerks was heard receiving complaints from customers flustered by the delays in receiving their vehicles.

"Our cars are held up at Customs," the operator repeatedly declared in defence.

One of these customers was Fikadu Gebremariam, a war veteran living off the 1,259 Br pension he receives from the government. Hoping to support his family by engaging in the taxi service, he agreed with a company named FAT Transport Technologies to purchase a vehicle.

The company asked for a 173,000 Br downpayment from him and 101 other customers, promising to deliver the vehicles in three months, according to Fikadu.

In this case, too, the company collected more than 17 million Br and failed to deliver. Fikadu narrates that he and his friends went through litigation before finally receiving a seven-million-Birr settlement, which they divided among themselves.

After being paid back a portion of his money, Fikadu came to Hello Taxi and decided to yet again try his luck by investing 40,000 Br, the "service charge" required for one of the purchasing schemes offered by Hello Taxi.

"We're too eager not to lose our taxi driving careers," says Mikias, explaining why so many taxi drivers are subscribing to these schemes.

In about six months, Hello Taxi has registered 5,000 interested applicants, out of which 1,000 have already signed a contract with the company.

These signees have deposited a service charge of 60,000 Br and 25pc of the vehicle's total cost, according to Tesfaye Gebregzi, a public relations official at Hello Taxi. The remaining 75pc is to be financed through loans from Bank of Abyssinia that must be fully repaid within four years.

Bank of Abyssinia's communications office has informed Fortunethat there is an agreement between the Bank and Hello Taxi and that two rounds of loans have already been provided. The Bank also disclosed it is open to availing more loans in compliance with the central bank's directives.