Lagos’ Bike-Hailing Startups May Have To Choose Between ‘Agberos’ And NGN 25 Mn In Annual Licensing Fees
It has been a series of drama for the bike-hailing startups in Nigeria. The fiasco is yet to see an end, nevertheless. The government of Lagos State, according to a report, is planning to introduce a new license agreement for bike-hailing startups to grant them operating permission within the state.
A USD 70 K (NGN 25 Mn) fee may be slammed on GoKada, Max.ng and ORide soon. The sum, interestingly, will be for 1,000 bikes for a period of one year. Reports also have it that an additional NGN 30,000 will be paid for each registered bike rider after the 1,000 mark has been crossed.
Punitive or non-punitive? Well, it’s hard to judge, especially as many think this will finally bring an end to the terror rained upon glowing helmets by transunion workers popularly known as Agberos. If the pedigree of Lagos, the storied land of opportunity, is anything to go by, then these demands were expected sooner or later.
For the fact that the bike-hailing market in Lagos seems to be getting lucrative, the government’s decision to step in with fees is near to culture. The smallest state in the country, it boasts of the largest Internally Generated Revenue (IGR) of NGN 258.7 Bn (USD 1.3 Bn). Apparently, it wants to keep it that way.
These bikes have been literally operating in the state for a few years, and nothing of such ever came up. But with the entry of new players and a heating up of the market, the sector may have no choice than to bring something handsome to the table.
Perhaps their war chests of VC funding gave them away, perhaps not. And given the volume of these money bags, this could come off as an easy sum to pay.
Even though there have been back-fence complaints regarding the to-be policy, it will apparently save bike-hailing firms from the exorbitant fees imposed on them by Lagos Agberos. These companies who already pay taxes to the government will not be able to survive paying for their over 100 riders each for every working day, as that will just cripple their business.
It’s somewhat hard to discern whether this fee is a wolf in sheep’s clothing or a blessing in disguise. But this one is for sure – the bike-hailing sector is going to get stiffer as future entrants would be discouraged by an NGN 25 Mn fee (for what exactly?).