ORide, Max, Gokada and Safeboda among other bike-hailing startups in Lagos State may soon be mandated to pay N25 million in annual licensing fees. The government is considering a new regulation that will require each bike-hailing startup to pay $70,000 (N25 million) per 1,000 bikes every year and another $83 (N30,000) per bike after the first 1,000 set.
As it stands, Max.ng, Gokada and ORide are the biggest bike-hailing services in Lagos at the moment, and each of them has over 1,000 riders signed up to their services. Meanwhile, many of these startups have raised a lot of money in capital funding from investors around the world. Opera, the parent company for OPay and ORide, recently announced raising $50 million for mobile finance in Nigeria; Max announced raising $7 million in funding and Gokada revealed it raised $5.3 million in funding.
Bike Companies Say Road Safety and Responsible Road Behaviour Is High On Their Priority List
It, however, remains unclear whether the Lagos State government is proposing this annual licensing fee in response to the capital fundings announced by the startups respectively; or if it is to generate state revenue for the new Sanwo-Olu-led administration in Lagos State. It also remains to be seen if the taxation will hobble operations for the bike-hailing startups.
The state government informed the startups of the proposed regulations during a series of meetings since the start of the year. A source at the meeting revealed that the government made it clear to the startups that it is not keen on having commercial motorcycles ply the roads in the state given their high rates of accidents and the existing plans to turn Lagos into a mega-city. The startups are however trying to convince the government that they place a high value on safety and responsibility on the roads, with the records of every registered motorcycle in the companies’ databases.
Government Imposes Multiple Taxations, and Union Agents Continue With Further Extortions
It is on record that previous administrations had banned the operations of commercial motorcycles on several major roads in Lagos State. Many Lagos residents do not like this idea, considering that they are able to beat the notorious traffic gridlocks in the state by riding on commercial motorbikes locally known as Okadas.
On the flick side, industry analysts believe that levying the proposed tax on bike-hailing companies will amount to multiple taxations, a situation most business owners complain about in Lagos State. This is not to mention the fact that union agents hassle bike operators for union dues that have also risen in price. So the government imposes additional taxes on the bike-hailing startups in the state, and union agents extort operators for monies that can never be remitted to any official authorities.