Lagos enforcing new regulations for ride hailing services will suffocate businesses

Uber and Bolt

By Oludolapo Ige 



The Lagos government has revealed plans to introduce a new range of regulatory guidelines for ride-sharing services such as Uber and Bolt operating in the state which may have significant impact on the fees charged to customers.

With the new regulations and place, these operators will have to pay huge sums of money to gain permission to operate within the state. These companies, Bolt and Uber, with over 1000 drivers operating on their platforms will be required to pay a licensing fee of over 25 million Naira and an annual renewal fee of 10 million Naira. The new regulations will take effect by the end of August. It was initially supposed to take effect in March but the unexpected COVID 19 pandemic delayed its implementation. The operators with less than 1000 drivers will be expected to pay a licensing fee of 10 million naira and an annual renewal of 5 million Naira.

The new regulations will not only affect the pockets of the operators but also its drivers and the users. As part of the new regulations, all drivers operating with the ride hailing services must pay 10% of the income generated from each trip. As such, this will lead to an increase in tariffs for users as the operators and drivers would want to make their money back.

The increased tariff will make users seek alternative options. In February, when the government first revealed the new regulations for the ride hailing services, the government disclosed that the services disrupted the businesses of the yellow cabs which prompted the government to launch the failed EkoCab to encourage lagosians to use the public taxis that were in use before the introduction of ride hailing services. The increase in tariff may then prompt the residents of Lagos State to return to using these yellow cabs returning revenue to the state.

The new regulations in Lagos may cause a domino reaction across the country. If the new regulations become successful in Lagos, other states that hosts these ride hailing services will want to follow so as to generate extra revenue.

Overall, these new regulations may discourage many unemployed Nigerian youths who had in to become drivers for these ride hailing services as a source of income, especially with the increase in unemployment rates caused by the COVID 19 pandemic.

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