Commuters react as Lagos mulls license fee for bike hailing start-ups

The plan by the Lagos State government to impose a license fee of N25million has continued to generate divergent reactions among commuters. If implemented, bike hailing platforms will cough up a license fee of about $70,000 (N25 million) annually per 1,000 bikes and N30, 000 will be paid for each registered bike rider after the 1,000 mark.

Bike hailing platforms have been well received by Lagos commuters; the nascent industry has also attracted funding rounds from investors. Gokada was able to raise funding of up to $5.3 million from Rise Capital, Adventure Capital, IC Global Partners, and First MidWest Group, received a funding of $1.1 million from Right Side Capital Management, Shell Foundation, and Techstars, new entrant Oride, is also backed by deep-pocket investors. Some have also expanded their operations to other cities in the country.

Parked at strategic junctions in the city, their motorcycles and helmets come in different colors ranging from Orange, Green, and Yellow. The idea of an on-demand, flexible transport service to get around Lagos’ hours-long traffic jams and congestion is an appealing proposition for millions of residents, it’s also cheaper compared with established car-hailing services like Uber and Bolt.

In recent times, riders have also complained of rampant extortion from Road transport unions, with demands that they pay the levy before operating in the state.

Dennis Okoroafor, a rider said he has restrained from plying some routes in Mushin and Ojuelegba areas of the state.

These Area boys (acting under executives of Road Transport Union) are always requesting that we buy N500 tickets, and If I don’t pay the tickets, they are not going to leave you. I don’t have any option, I have to give them,” Dennis told BusinessDay.

Mrs. Esther, a commuter said the proposed tariffs could erode the gains recorded so far in the industry and advised the government not to kill this young industry which has served employed several young Nigerians.

“This is proposed license fee says a lot about our business environment and it is going to send a wrong signal to investors and founders,” she lamented.

In an interview with BusinessDay, Iniabasi Akpan, Country Manager, Oride,  said the proposed license fee will differentiate serious operators from the unserious ones in the industry as this will help put sanity into the industry,

According to TechSci Research, a research-based management consulting firm that provides market research and advisory solutions, South Africa, Nigeria, and Tanzania are the largest two-wheeler markets in Africa. The report also predicted that the two-wheeler market in Africa will cross US$ 9 billion by 2021.

In 2012, the Lagos State Government imposed a ban on motorcycles from plying major roads in the state, especially motorcycle with less than 200 cylinder capacity. The biggest down risk to motorcycle hailing platforms remains government regulations and sanctions.



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