Startups

For The Past 1 Month, Bike-Hailing Firms In Lagos Have Been Paying A Dubious Daily Levy That “Hasn’t Been Agreed To”


December 18, 2019

Last month, it may have been conveyed in various media circles that the squabble between the Lagos State chapter of two ‘powerful’ transport unions in Nigeria and bike-hailing companies operating in the state had been resolved. But this could, in fact, be untrue.

It was widely reported that chieftains of the National Union of Road Transport Workers (NURTW) and Road Transport Employers’ Association of Nigeria (RTEAN), had “reached an agreement” with representatives of e-hailing firms in the state on a daily levy of NGN 500.00 to be paid by each of the riders of these startups before they can operate in certain areas. But this is far from the truth.

And that’s because the bike-hailing startups, on their part, did not formally agree to any such arrangement as negotiations with the unions had ended in an impasse. 

As a matter of fact, the final words were from government representatives who sided with the unions, asking the companies to pay up. There was neither an agreement nor a compromise. At best, it was an imposition.

A source who was present at the meetings with the unions had earlier told WeeTracker: “After our conversation, government representatives imposed the unions’ demands on us. They called it a take-it-or-leave-it offer, saying we have to accept the NGN 500.00 per rider per day demanded by the unions. So that is where things are at.”

So, as things stand, no formal agreement has been reached. But even as things are somewhat at a standstill presently, it appears the unions have not relented in throwing their weight about.

For the past one month, riders of bike-hailing companies in Lagos have had no choice but to keep paying a levy that has not been formally sanctioned or agreed to.

The Policy Team at MAX.ng — the Nigerian logistics startup that pioneered bike-hailing in West Africa — told WeeTracker that the company’s riders have been paying the disputed daily levy.

“While the levy hasn’t been agreed to formally, the levy is already in effect and has been so for about a month now,” they told WeeTracker in an emailed response.

“Our champions at MAX have been paying this, while all modalities regarding this levy are being fine-tuned with the government and the other stakeholders involved.

“There hasn’t been a formal agreement, as modalities concerning the proposed daily levy of NGN 500.00, which is already in the domain of public discourse, hasn’t been agreed to. There are however ongoing efforts by all players within the space to come to a unified position with the Government on this,” they added.

Not that this is some major surprise, but worrying still. Long before talks even began, riders of bike-hailing companies have been the targets of attacks by street thugs (popularly called Agberos) who act as the unofficial “hand” of the unions.

There have been several cases of intimidation and extortion of bike-hailing riders by union-backed thugs who go after riders plying certain routes, demanding crazy sums in illegal “permission-to-do-business” money. It’s crazy because these firms already pay sums running into millions in legal taxes and operation fees.

Eventually, the power-drunk, mafia-like unions took it to another level by holding formal talks with the bike-hailing companies and making illegal/unconstitutional demands; a move that can be thought of as an effort to make the extortion official and sort of legal, especially since it appears they have the government’s backing.

The latest meeting between the ‘transport mafia’ and the bike-hailing companies was held last week. But as WeeTracker gathered, the meeting had less to do with the disputed levy than it had to do with reconciling how e-hailing operators engage the Ministry of Transportation going forward, regarding the registration of their motorcycles. 

This may not be unconnected to a separate development in which hundreds of motorcycles belonging to bike-hailing startups have been confiscated by the authorities in Lagos reportedly due to lack of appropriate documentation. This has happened on quite a number of occasions in the last 18 months.

Generally, it’s not a good look for the realities of doing business in not only Lagos but in Nigeria as a whole. Nor is it a rosy time for players in the e-hailing space whose efforts at changing the face of the country’s broken transport system are being stifled.

As MAX.ng told WeeTracker, “Our goal at MAX, and we believe that other players within the space share similar sentiments, is to align with the government as quickly as possible on an agreeable framework. 

“For us, while this means levies that are feasible and practical, it also means partnering to deploy technology infrastructure that helps the government achieve its broader vision of a smart city. This in itself defines our approach for engaging the government going forward,” he added.

Featured Image Courtesy: MIT News

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