Lagos Govt Reduces Ride-hailing Licence Fee by 20%, Drops 10% Tax for N20 Per Trip in Amended Regulation

Following reactions that trailed the release of the ride-hailing regulation, the Lagos State Government has reduced the ride-hailing licence fee by 20%.

The amendments were made during a meeting between the Lagos State Government and e-hailing stakeholders on Friday.

According to Gawat Jubril, SSA to the Lagos State Governor, the meeting was chaired Governor Babjide Sanwo-Olu and attended by the representative of BMP Car, Ezekiel Ojo; Bolt representative, Abisola Odukoya; Uber representative, Tola Odeyemi and Comrade Idris Shonuga Oluwaseun for the E Hailing Drivers.

During the meeting, several items in the regulation were amended and according to Jubril, all stakeholders in attendance were in agreement. Below are the new resolutions that will take effect from August 27, 2020.

20% reduction in licence Fee

TechNext reported in March that the state government has finalised its plan to regulate the sector. The regulation stipulated a ride-hailing licence fee of N25 million for companies with more than 1,000 registered vehicles and N10 million for companies with less.

However, the resolution released yesterday states that the licence fee will be reduced by 20%. This means that ride-hailing companies with over 1000 cars will now pay N20 million while those with less will pay N8 million.

There was nothing in the document about the subsequently annual renewal fees of the licence. So it appears that the initial annual renewal fees of N5 million and N10 million for companies with more than 1,000 vehicles still stands.

 N20 Flat fee per Trip

Dropping the initial plan to tax e-hailing companies 10% of each transaction per trip as service charge, the government has now decided to collect just a N20 flat fee per trip to be known as Road Improvement Fund.

This development will be a piece of welcome news to stakeholders especially drivers. The President of the National Union of Professional App-based Workers (NUPABW) Comrade Ibrahim Ayoade, earlier shared his displeasure at the content of the regulation especially the former 10% service charge in an interview with TechNext.

Drivers have 90 days to comply

According to the regulations, drivers must be literate, at least 21-years-old and must have a valid drivers license, original Annual certificate of competence from Lagos State Drivers’ Institute (LASDRI card), and Lagos State Residents Registration Agency (LASRRA) Card.

The new resolutions said nothing about a change in the requirements but gave drivers the grace of 90 days from the commencement of the new regulations to get all the necessary requirements and documentation. According to Jubril, there will be a one-stop-shop for all the documentation especially the Lagos State Resident Registration Agency (LASSRA) Card.

This means that Uber and Bolt Drivers won’t be worried about a crackdown of defaulting drivers until the end November.

However, drivers caught taking offline trips could however face sanctions as the new resolution prohibits ride-hailing drivers from taking offline trips and transactions.

The Lagos State Commissioner for Transportation, Frederic Oladeinde says that the documentation of drivers is for the safety of Lagosians using the E Hailing business. He added that the database will allow the state easily track drivers in case of emergency and other security and safety issues.

E-hailing Companies

The resolution made at the meeting added some new requirements to the ones already in the regulation. First is that there must be comprehensive insurance plan which will cover drivers and passengers.

Another is that e-hailing companies must work with various bodies in the business for a good relationship and must do due diligence and background checks on all drivers.

Encrypted Data

A major highlight discussed in the regulation was the collection of data from ride-hailing companies. According to the new agreement by all parties, e-Hailing firms must still make the necessary data available to the government.

However, Oladeinde explained that the data requested is encrypted point-to-point data not personal info of riders. He added that the data will help the government clear up issues around congestion as well as the calculation of fee payable to the government.

The Under 3 Years Car Rule

Speaking on the regulation, the commissioner of transportation clarified that news going around that e-hailing cars must be brand new or at least less than 3 years old is false. According to him, the resolution only applies for ‘Corporate Cabs’ and has nothing to do with the e-hailing business.

Other provisions in the regulation which stipulate that the capacity of the vehicle must not be less than 1.3cc, it must comply with the requirements of Road Traffic Law of the State and must be brought for inspection at least once a year were not amended. So they still hold.

In summary, the government has promised that the new regulations do not affect customers. According to Commissioner of Information, Gbenga Omotoso, the purpose of the regulation is mainly for security, service and a level playing field for businesses to thrive.

However, with issues like pricing model for e-hailing still kept in the dark, the governments promise to protect the customers and drivers still leaves room for some doubts.