Lagos State to Slam N25 Million Annual License Fee on Bike Hailing Startups

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Lagos state has witnessed a massive rise in bike hailing startups in recent times, and it looks like it wants to make the most out of it.

Reports have it that the Lagos state government is planning to effect a licensing fee for bike hailing startups to operate in the state.

This will see bike-hailing startups in the state pay N25 million annually per 1,000 bikes and an additional N30,000 for every bike after the 1,000 mark.

However, according to Techcabal, the discussions around the proposed fee is still at an early stage and being deliberated upon, hence no official deal has been reached yet.

Such regulations were expected sooner or later. With a giant economy, Lagos State prides itself as a self-sufficient state with its Internally Generated Revenue (IGR), standing at $1.3 billion (N258.7billion) in 2015. And with the thriving bike-hailing ecosystem, it is no surpirse that the government wants the sector to contribute a significant chunk to the state’s coffers.

With the recent massive influx of funding – Max.ng raised $7 million, Gokada raised $5.3 million and new entrants Oride raised $40million – this might seem like a considerable sum for the startups to pay. It might also save the startups from the recent issues with the Lagos state transport union workers who have been demanding that the riders obtain a N100 ticket for N500 before they would be allowed to continue on their journey.

On the flip side, this new licensing fee might stiffle market competition. New entrants might find this too much to pay and may be discouraged from entering the bike hailing market in Lagos.

Also, if it works in Lagos, other state governments may be interested to impose similar laws, which would mean more fees to be paid for startups as they continue to expand.

Moving forward, it remains to be seen what becomes of the proposed fee.



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