New Policy May Cause Hike In Prices Of Rides

 New Policy May Cause Hike In Prices Of Rides

By Emmanuel Awosika

Users of ride-hailing platforms in Lagos State including Uber and Bolt may face higher charges after the State Government introduced a new policy targeted at ride-hailing apps.

The policy is part of a larger set of regulations aimed at regulating operations of ride-hailing services in the state. It is set to come into effect by August 20, 2020.

The new regulations are contained in a document titled, “Guidelines for Online Hailing Business Operation of Taxi in Lagos State 2020”, released by Lagos State Ministry of Transportation.

According to the provisions listed in the document, operators of electronic hailing services are required to pay a 10 percent tax on money earned on every trip.

“All operators of e-hailing taxi service must pay the state government 10 per cent service tax on each transaction paid by passengers to the operators,” it reads.

Also, ride-hailing firms will now pay 25 million naira annually on every 1,000 cars in their fleet for a license. Subsequent renewals will cost 10 million naira per year.

In addition, new firms will pay a sum of 10 million naira to get a license permitting them to operate in the state.

Many have expressed fears that the increases in levies paid by ride-hailing services will lead to a hike in prices charged for rides.

A TechCabal article pointed this out, explaining that if the provisions come into effect, the real losers “will be the customers.”

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“Uber and Bolt will pass this 10% cost along to end users, making cab fares more expensive,” it said.

The new regulations come months after the State Government introduced a law banning Okada riders, forcing bike-hailing services, such as ORide, MaxNG, and Gokada, to stop operations.

These actions has led to critics slamming the Lagos State Government for what they perceive as “anti-business” policies. According to them, the high levies and double taxes have affected companies and many start-ups as well.

 

 

lagosstreetjournal

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