Lagos Reduces Ride-hailing License Fee by 20%, shifts deadline to August 27, 2020

The Lagos State Government has reduced the ride-hailing operational license fee in the state by 20% after a stakeholders’ meeting with the operators on Friday, August 14, 2020.

The State Governor, Babajide Sanwo-Olu through its media aide, Jubril Gawat, disclosed the outcome of the meeting. He stated stated that the meeting was attended by operators like Uber, Bolt, and BMP among others.

Earlier this week, the Lagos State Government had announced new guidelines designed for ride-hailing operations in the state. According to the new regulatory framework by the state which will take effect from August 20, 2020, ride-hailing companies were required to pay the Lagos State Government a 10% service tax on each transaction.

According to a statement by the Lagos State Commissioner of Transportation, Frederic Oladeinde, the operational licence fee has been reduced by 20%. These will put the figures as follows:

• First 1000 taxis:  ₦8 million ($20,647)
• 1001 taxis and above:  ₦20 million ($54,682)

For App Operators:

• First 50 units of cabs —  ₦4 million ($10,356)
• 51 cabs and above —  ₦8 million ($20,647)

Also, ride-hailing companies were initially required to pay a 5% service tax for every trip. To replace that, the commissioner reveals that a Road Improvement Fund has been introduced, and a flat fee of ₦20 will be charged for every transaction.

According to the commissioner, there will be a one-stop-shop for all the documentation, especially LASSRA Card- Lagos State Resident Registration Agency.

The guidelines also required that the vehicles must be brand new or within the first three (3) years of its manufacture as specified by the manufacturer.

Now, during the meeting with the Governor, all parties agreed to newer resolutions which are:

• There must be comprehensive insurance cover which will cover drivers and passengers.
• A reduction of 20% on the operational licensing fees.
• A flat fee of N20 to be known as Road Improvement Fund which will be levied on each ride/trip.
• A 90-day compliance with documentation for the drivers – There will be a one-stop shop for all the documentation (especially LASSRA Card- Lagos State Resident Registration Agency.
• E- Hailing companies to work with various bodies in the business for a good relationship.
• There MUST be due diligence and background checks on all drivers.
• Riders should desist from offline trips and transactions.
• E-Hailing Firms must make necessary data available to the Govt.

Mr. Gawat also noted that media reports about operators being required to only use cars that are not more than 3 years are incorrect. Instead, the rule only applies to Corporate Cabs. “This has nothing to do with the E Hailing business,” Gawat said.

On the requirements for sharing data, the Lagos state government said that data shared would be encrypted, and the personal information of ride sharers would not be disclosed.

“This will help Government clear up issues around congestion & also calculation for the charge paid to Government,” he added.

Uber had earlier told Nairametrics, after the guidelines were released, that it was willing to engage the government on regulations to ensure “our operations align with best practices locally and internationally.

“We have always been willing to engage with governments on regulations to ensure our operations align with best practices locally and internationally, as we believe regulations need to support innovative technology ideas that fit 21st-century businesses. The current proposed regulations are inconsistent and unclear. We are working to better understand how they will impact the future of our business and network of driver-partners. We will give an update in due course,” Uber said.