The Lagos State Ministry of Transportation is set to introduce new regulations, titled ‘Guidelines for Online Hailing Business Operation of Taxi in Lagos State 2020’ which are set to be enforced from August 20, 2020 (Guidelines).

The president of the National Union of Professional App-Based Workers, Ayoade Ibrahim told the press that the Guidelines put a heavy burden on the drivers and exposes them to the whims of ride-hailing companies, as many of the new charges will be passed on to the taxi drivers where possible. According to Part 4, in particular paragraph 4.1 (A)(v) of the Guidelines, operators of e-hailing Taxi Services must pay the State Government a service tax on each transaction paid by passengers to the operators. The Guidelines also mandate all e-hailing taxi firms, described in the Guidelines as “Service Entities” to pay, prior to operation a license fee which shall be in accordance with the number of taxis the Service Entities have using their platform.

The above implies that the Lagos State government will receive taxes, licensing fees and then a percentage from every trip completed on these platforms. According to TechCabal, “While operators kick against this provision, if it goes ahead to be implemented on August 20, the real losers will be the customers. Uber and Bolt will pass this 10 per cent cost along to end users, making cab fares more expensive.”

The enforcement of the Guidelines, as expected, does not sit well with some of the drivers of these ride-hailing companies particularly given the current state of the economy. We will continue to monitor developments in this regard and bring you updates as further information becomes available.