Lagos Enforces New Regulations On Ride Hailing Cabs, Imposes N10m License Fee

By  | 

Lagos Enforces New Regulations On Ride Hailing Cabs, Imposes N10m License Fee



Lagos State Ministry of Transport has released new regulatory guidelines for all e-hailing cabs (Bolt, Uber and others) which is expected to take effect from 20th August, 2020.

The new regulations include that all the vehicles must be brand new, if not, must be within 3 years of production, that all companies share database of their passengers, pay 10% of every transaction with passenger, which is to be pushed to the riders, among others.

The new regulatory on Bolt/Uber is coming months after the likes of Gokada, OPay, and other online ride hailing motorcycles were banned and forced to leave the State.

Also, the new regulations state that all vehicles must obtain hackney permit from the Lagos State Motor Vehicle Administration Agency and all the drivers must posses a driver badge obtainable at the Lagos State Drivers Institute which will be issued by the Department of Public Transport and Commuter Services, an arm of the Lagos State Ministry of Transport. In addition, a cabs must have a taximeter to be issued by the State.

According to the document tagged “Guidelines For On-line Hailing Business Operation Of Taxi In Lagos State”, now categorises the taxi business operation as follows:

a. Service Entity: An app developer like Uber/Bolt that does not operate or own any vehicle, but connects car owners and commuters with their App.

b. Taxi and app operators: These are companies like Ekocab that operate their vehicles as well as the App. These companies might have their fleet, and also have third party car/fleet owners on their platform.

From August 20, 2020, service entities in the city with less than 1,000 drivers are expected to pay a ₦10 million ($27,341) licence fee, while those with more than 1,000 drivers are to pay ₦25 million ($54,682).

Subsequent renewals are pegged at ₦10 million ($27,341) for those with more than 1,000 drivers and ₦5 million ($13,670) for those with less.

Taxi and App Operators with 50 cabs or less are expected to pay a ₦5 million ($13,670) licence fee, while those with more than 50 cabs are to pay ₦10 million ($27,341). The former will pay an annual renewal of ₦1.5 million (~$3,870), while the latter will renew at ₦3 million ($7,700).

Other provisions include:

  • All Operators of e-Hailing Taxi Services must pay the State Government 10% service tax on each transaction paid by the passengers to the operators.
  • They must commence the renewal process 3 (three) months before the expiration of the existing licence
  • They must have a quarterly meeting with the Ministry of Transportation for operational updates and feedback
  • All operators of e-hailing taxi services must give the Ministry access to their database

The government is creating an exchange service where these licences can be traded. This seems particularly interesting given the fact that the regulations state that licences will only be given to taxi operators under a franchise.

Taxicab requirements

The Lagos State Government states that all taxicabs must undergo a thorough inspection according to the State’s Road Traffic Law and under a special Taxicab inspection protocol. A vehicle must meet the following conditions:

  • It must be brand new
  • Where the vehicle is not new, the vehicle must be within the first three (3) years of its manufacture as specified by the manufacturer
  • The capacity of the vehicle must not be less than 1.3cc
  • It must have a completed, signed, and dated safety features compliance form prescribed by the Ministry
  • The taxicab shall be equipped with a taximeter approved by the Ministry

Leave a Reply

Your email address will not be published. Required fields are marked *

%d bloggers like this: