A while ago, bike-hailing startups started appearing on Lagos roads as a solution to the constant traffic. Now, when they are about to take off fully, the Lagos state government slams a 25 million license on these startups.
The state government has proposed a new regulation that requires the bike-hailing startups in the state to pay an annual licensing fee of N25 million per 1, 000 bikes. Even more, an additional N30, 000 will be paid for each bike rider registered after the 1,000 bikes-mark.
Though a TechCabal source informs that the proposed license is still in its early stage, the plan is very much in motion.
The news of the proposed license fees comes at a time when the bike riders for these startups have complained of extortion from the terror on Lagos roads. The transport unions, popularly known as “agbero boys”, now force these bike riders to pay tickets before operating in the state. This issue has hobbled operations as several riders are forced to boycott areas like Mushin, Egbeda and Surulere to avoid paying these levies.
In hindsight, while this licensing fee might stop the recent issues with the road transport unions, it appears to be “too-high-a-sum” for the startups.
Besides, if it comes into play, this licensing fee will most likely stifle market competition as it will discourage new bike-hailing startups from setting up.
Also, this proposed regulation might pose a problem to the startups with expansion in other states. As, if it works in Lagos state, the governments of other states may be tempted to also impose similar regulations, which would translate into more fees to be paid by the startups as they expand.
Now, we can only watch and wait to see what becomes of the proposed license fee.