Lagos Reduces License Fees, Scraps 10% Tax for e-Hailing Services

By Adedapo Adesanya

Following negative reactions that trailed its planned action, the Lagos state government has adjusted regulatory requirements for ride-hailing services operating in the state.

In newly updated requirements, the government has slightly reduced the proposed licence fee and has introduced a road fund and raise more questions on data sharing and vehicle requirements.

Business Post reported last week that ride-hailing platforms like Uber, Bolt, among others which operate in the commercial city will pay a 10 per cent tax on every ride alongside other license fees and sharing of their operational data.

It was also disclosed that companies with less than 1,000 drivers were expected to pay N10 million licence fee, while those with more than 1,000 drivers were to pay N25 million.

The state then noted that subsequent renewals would cost N10 million for those with more than 1,000 drivers and N5 million for others.

In the newly revised policy, the Lagos State Commissioner of Transportation, Mr Frederick Oladeinde, has disclosed that in place of the 10 per cent service tax for every trip, a Road Improvement Fund has been introduced and a flat fee of N20 will be charged for every transaction.

Mr Oladeinde also added that operational licence fee has been reduced by 20 per cent. This means those with more than 1,000 taxis will now pay N20 million instead of N25 million while those with less will pay N8 million in place of the former N10 million.

It also noted that app operators (those without cars but allow its services) more than 50 cabs on their platforms will pay N8 million while those N50 cabs will pay N4 million.

Initially, the date for the implementation was set for Thursday, August 20 but has been shifted by a week and will now commence on August 27.

The state government also noted that drivers have been given 90 days to comply with all necessary documentation.

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

The commissioner reiterated the fact that there must be due diligence on drivers and riders should desist from offline trips and transactions.

Clarifying the data issues, Mr Oladeinde noted that, “The data they will be supplied to us is going to be encrypted. We don’t want detailed data, just on movement, from point-to-point, it’s going to be encrypted so that all the information is taken off.”

According to him, the data will ensure more planning and to enable the government to deploy resources to places faced with congestion.

“We are not asking for data on people’s details, where they came from or where they are going to. We just want point-to-point data,” he added.

Mr Oladeinde insisted that vehicle guidelines, which includes a brand new vehicle of 1.33cc with a taximeter among others, were not meant for e-hailing companies, but for what they call corporate cabs.