Uber, Taxify and other ride-hailing companies in Lagos state may have to start paying over N10 million naira to the state government, according to proposed regulations by the state.
The new regulations follow the crackdown on drivers of ride-hailing companies by the state government in the last couple of weeks.
The crackdown which resulted in the impounding of vehicles belonging to several Uber drivers was reportedly because the drivers didn’t have hackney permits and Lagos State Drivers’ Institute (LASDRI) certification.
When the new regulation comes into effect, ride-hailing companies with third party operators like Uber and Bolt will be mandated to pay an initial licence fee of N10 million or N25 Million if they have more than 1000 drivers.
However, for subsequent years the ride-hailing companies will pay an annual renewal fee of N5 million or N10 million if they have over 1000 drivers.
For transport companies that own their own branded cars with employed drivers, the regulation mandates them to pay N5million. However, if their drivers exceed 50, they would be required to pay N10 million.
This new regulation also provides that drivers on ride-hailing platforms like Uber and Bolt will be required to have LASDRI cards as well as a drivers badge to operate in the state. The badge will be issued by the department of public transport and commuter services of the state ministry of transport.
Also, the cars onboarded on Uber, Bolt and other ride-hailing must now have hackney permits which cost as much as N15,000. They would also be required to operate with tags issued by Lagos State Motor Vehicle Administration Agency.
The new regulation is to come into effect on the first of March 1, 2020.
Under the new regulation, the state government will earn 10% the fare of each trip. This means that for a trip of N5000 the government will receive N500.
This 10% tax on each trip could be the government’s method of taking a share of the booming ride-hailing business in the state. It is expected that this, somehow, will come at the expense of the drivers as ride-hailing companies like Uber already have between 20-30% the cost per trip.
However, president of the National Union of Professional E-Hailing Driver-Partners (NUPeDP), Ayoade Ibrahim expressed confidence that the government’s 10% won’t be the drivers’ burden to bear. The chairman expressed regret that car-hailing companies have failed to recognise the union and as such, can’t work hand in hand with them.
“App (taxi-hailing) companies believe they don’t need to recognize driver partners and the National Union of Professional e-hailing Driver partners An Affiliate of Trade Union Congress Of Nigeria,” Ayoade told TechNext.
“If they recognise the union by now we would have fought for them. They cannot lower driver partners incomes because app companies believe they don’t need us.”
Mr Ayoade confirmed to TechNext that his union is having its separate negotiation with the government. This is understandable since Uber and Taxify have never treated their drivers as part of them, insisting that they are merely contractors. As such, the drivers have always operated independently.