Lagos State, Nigeria’s most populous state has allegedly slammed on-demand motorcycle hailing startups in the state with N25 million annual license fee per 1000 bikes. An extra N30,000 will be charged for every additional bike after paying for the first 1000.
Bike hailing startups came into the market with a promise to make transport easier in Lagos. But with trouble from road transport unions and a proposed N25 million license fee from the government, there are significant challenges ahead:
Road transport workers have been extorting OPay (ORide), Gokada and MAX drivers for the last few weeks. The Lagos State govt is now offering these startups a way out with a N25m annual licence agreement
The state has witnessed an influx of on-demand motorcycles since the inception of Max Okada. Gokada followed suit and the likes of safe Boda, Opay, etc. launched afterward. The startups have been a major player in helping Lagos residents evade traffic.
The companies had smooth rides in Lagos state till recently when the Lagos State Transport Union of workers started demanding a ticket fee five times higher than the regular N100 ticket fee from the startups.
Lagos is definitely not ready for business.
Agberos right now stopping oride, gokada and maxng bikes in Ojuelegba.
They want the riders to pay N500 for a N100 ticket
Techcabal has revealed that the alleged license fee is still undergoing deliberations, as no deal has been reached officially. Lagos prides itself as a self-sufficient state, recording a $3.1 billion Internally Generated Revenue (IGR) in 2015. It has been alleged that the state government is jumping on the booming motorcycle ride-hailing sector to secure a significant revenue for the state. We are not yet sure if this is true, but time will tell.
The startups operating in Lagos State have been able to raise significant amounts recently. Max.ng raised $7 million, Gokada raised $5.3 million and the newly launched Oride raised $40million. They all raised these funds to boost expansion, which we are not sure of, considering the recent controversies.
The major concern now, however, is that this recent development might scare away competitors. The alleged amount could also scare away potential investors in the State’s transport sector