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Uber, Bolt to Face Prohibitive Ride-hailing Regulations in Lagos

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Uber, Bolt to Face Prohibitive Ride-hailing Regulations in Lagos

Lagos state government has released new a set of regulations for ride-hailing companies operating in Lagos.

Among the regulations that are to be enforced from August 20, 2020, including an annual renewable licensing fee which is dependent on the number of cars in their platforms.

Ride-hailing companies that have more than 1,000 cars are expected to pay a first time licensing fee of US$65,000 and an annual renewal fee of US$26,000; while those with less than 1,000 cars are to pay US$26,000 and a renewal fee of US$13,000.

The operators will also be required to pay the State Government 10 per cent service tax on each transaction paid by the passengers in their platforms.

Others aspects of the regulations include but not exhaustive:

  • The Service Entity Permit must commence the renewal process 3 (Three) months before the expiration of the existing
  • Operators must have a quarterly meeting with the Ministry of Transportation for Operational updates and feedbacks.
  • Taxi Operators must operate under a particular franchise as no single operator/operation will be licenced.

Read: SWVL, Little Shuttle Face Regulatory Headwinds in Kenya as Services Get Suspended

Lagos state government has been toying with the aspiration to regulate the transport system in Africa’s most populous city.  

Earlier in February this year, Lagos banned operations of Okada (commercial motorcycles) including bike-hailing platforms like MAX, Gokada and ORide in major parts of Lagos state citing safety concerns. A decision that was met with displeasures from both the riders and their customers.

These new regulations also raise some data privacy concerns as operators are required to give Lagos state access to their database presumably to track their transactions activities.

The immediate possible effects of these regulations are that operators might increase the price of trips hence customers paying more or/and reduction of commissions for drivers. Most importantly is the prohibitive nature of the licensing costs that will hinder small entrants in the industry.

Image Credits: Hermant Mishra/Getty Images

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CEO and Founder at Founder360° Magazine.

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