How true is the rumoured $70k license fee targeting ORide, Gokada, bike hailing startups in Lagos?


There is a rumoured $70,000 as operating license fee targeted at ORide, Gokada and other ride hailing startups supposedly proposed by the Lagos State government.

While the rumour has already garnered much debates on Twitter and other social media platforms, there signs it could be mere rumours and could as well be true going by the taciturn posture of the state government towards similar cases.

According to people who quoted unnamed sources within the state government circles, the proposed license which could come into effect any moment would require ride hailing startups such as ORide and Gokada coughing out as much as ‘N25 million (about $70,000) annually per 1,000 bikes. A further N30,000 will be paid for each registered bike after the 1,000 mark.’ cannot confirm or deny this rumoured but ‘humongous’ fee but there indications that the state government could be planning to regulate the operations of participating startups providing bike hailing in Lagos State, a city with one of the most hectic traffic in the world due to congestion and poorly-upgraded road networks.

One source from one the two largest bike hailing startups told PageOne’s startup desk that the government has not intimated the company with any proposal of a license fee but there are prerequisite registrations and filings required of any major transportation service provider operating as a corporate entity.

The source also confirmed that its partnership team are in active consultations with the Lagos government as to how to standardise the required registrations and regulatory oversight required of a typical bike-hailing service provider.

In recent times, Gokada and ORide as well as Max have raised various series of finding to scale their bike hailing operations across the city as well as expanding their tentacles to other states particularly Ibadan, a strategic but less commercial city.

The Lagos State government had in past came up with regulatory directions for motorcycles as a means of transportation and logistics across the state. However, it did not require any special license for such operations, although there were no bike hailing startup in the state, the regulation basically grouped authorisation for the use of motorcycles based on engine capacities.

According to an amended road traffic law in 2013 that regulated the use of motorcycles, the law stipulated that the engine capacity of any motorcycle that must operate in the state must be above 200CC.” During the Governor Babatunde Raji Fashola Adminstration, many companies took advantage of this simple law to upgrade their delivery bikes. Apart from buying such bikes, owners of the motorcycles were required to register them by paying the required levies and fees as required depending on the mode of use (personal or commercial). The encouraging nature of the law also saw to the emergence of various last mile logistics startup without much fuss.

However, the latest but supposed licencing regime will not only be draconian but anti-innovation in a state that badly requires a diversification of its means of transportation away from cars and buses.

The seemingly hostile nature of the government has already emboldened existing trade unions of motorcycle riders to impose unrealistic levies on riders of Gokada, ORide and its other peers. There were viral videos showing touts and supposed officials the unions seizing bikes while demanding for tickets from riders.

The lack of direction and clarity from the Lagos State government has already sent negative signals to would be investors who could have invested in the sector thereby standardising bike-hailing services in the city and the state at large. According to an unverified source, ride-hailing giant, Uber Technologies Inc is said to have suspended its plan to launch its bike-hailing business in Nigeria. The company has already started its UberBoda in Kenya alongside its biggest rival, SafeBoda. Former Taxify, now Bolt has also refused to start its motorcycle business in Lagos. Last week, we reported that the Uber rival in ride-hailing has started its bike-hailing service in Ibadan. In few months, Lagos could keep losing organised and innovative startups from its domain as a result of its actions and inactions.

These next few weeks would determine whether the Lagos State government would stifle businesses that are solving existential albeit peculiar problems in the state.