Under the proposed regulation which was made as part of local transportation infrastructure, each startup may be paying an annual licensing fee of $70,000 per 1,000 bikes and then $83 per bike after the first set of 1,000. This fees will be in addition to the regular annual taxes that is being paid on revenues by these start-ups.
The three major start-ups in the state, Oride, Gokada and Max.ng have all already gotten over 1,000 riders signed up to their service.
This may also signal the beginning of trying times for these companies considering that most of them are still venture capital funded and most likely not yet profitable.
The new licensing fees come after a streak of high-profile funding announcements by bike hailing companies with Max.ng raised $7 million in a round led by Novastar Ventures with participation from Yamaha while Gokada raising $5.3 million in a Series A round led by Rise Capital.
'The regulations follow a series of meetings between executives at the biggest ride-hailing startups and the state government since the start of the year. One executive privy to the meetings says the state government has already informed startups it’s averse to having commercial motorcycles for transport in Lagos given its long-term plans as it builds a mega-city. As such, the licensing fees are being seen as a tactic to “frustrate the startups” and raise barrier to entry', QZ.com reports.
The licensing fees are also viewed by industry insiders as an example of the multiple levies that small and medium sized business owners often complain about in Lagos. Over the past month, riders with bike-hailing startups have also been hassled by union agents to pay five times the original price of union dues. As one executive put it: “Except government taxes, every other thing is extortion.”
Meanwhile, see how the prices of rice have increased by 29.41% in two months following the border closure.
We give you the best daily information on news, technology, lifestyle, career, health tips, agriculture, business and entertainment. If you can write very well and want to make a living writing online, click HERE!