Oride, Gokada Others will be Affected by the New Lagos Law Banning Commercial Motorcycles From Operating in Major Areas

In case you missed it, the Lagos state government has rolled out a new law that prohibits commercial motorcycles, including bike-hailing startups, from operating in some specified local areas of the state.

This new development was made known by the Senior Special Assistant to the Governor on New Media, Jubril Gawat on Twitter.

According to the new regulation, commercial motorcycles – which encompasses Okada and Tricycles (Keke in local parlance), have been banned from operating in Apapa, L/Mainland, Surulere, Eti Osa, L/Island, Ikeja LGAs.

The new rule is said to ensure safe transportation in Lagos and is expected to take effect from this Saturday, February 1, 2020.

Why this matters…

This will translate to a massive hit to bike-hailing startups, which have served a significant market size in the state since inception. Also, this is also the first time the Lagos state government is enacting a rule that directly affects the startups.

Since the last 2 years, there has been a significant rise in the number of commercial motorcycles operating in the state. The most noticeable is the better organized new entrants into the system, the ride-hailing startups – MAX.ng (bikes and Keke), Gokada, ORide, OTrike (with a significant cash reserve behind their structures to storm the market).

The Line of Security has been Removed

Although there has been a road traffic law in place, the rule only outlawed the use of motorcycles below 200CC from operating on hundreds of roads in Lagos within the state metropolis.

For the bike-hailing startups, they have always operated in the safe zone, utilising bikes above the stipulated range. But this new rule seems to be no respecter of that as it is said to ban the startups from the major hotspots in the state.

Now this will mean that more bikes owned by these startups will be confiscated by the police and taskforce operatives. Which is not new, however.

For a while now, there has been occasional raids and ‘shakedowns‘ by men of the police force which included massive confiscation of bikes owned by these startups, with no explanation. But this time, they will be doing so under the law.

Alternatives for Citizens

The question, however, is to why the government is excluding these areas for the startups. The closest answer to this is the announcement that the government plans to roll out BRT buses to cover the areas affected, which means the government is looking at areas with the adequate infrastructures first.

This is just the latest in the string of happenings to have befallen the startups in recent times.

For a while now the startups have continued to battle with extortion of riders by the National Union of Road Transport Workers (NURTW) and Road Transport Employers’ Association of Nigeria (RTEAN) until recently they came to an agreement for riders to buy a ₦500 daily ticket.

Asides that, the Lagos state government have also made known its plans to effect an N25 million licensing fee for bike hailing startups to operate in the state.

Now with this new rule that restricts these startups, it remains to be seen what happens with this.