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Ride hailing companies operating in Lagos, an economic hub of Nigeria, will soon be required to pay licensing fees under the new regulations.

As per the new regulations released by Lagos State Government, which were supposed to take effect in March this year, all ride hailing companies must pay the State Government 10 percent service tax on each transaction paid by the passengers to the operators.

Uber and Bolt are some of the ride hailing companies that rely on smartphone technology for dispatch and fee payment without owning any vehicles in the city of this west Africa nation.

The majority of the 9 000 active Uber drivers in Nigeria are in Lagos. “No entity shall operate as a support entity in Lagos State without first having obtained a support entity permit from the Licencing Authority,” reads part of the document.

“The service entity permit must apply for the operator's provisional licence prior to operation and a payable fee of ₦10 million ($25 000) for 1 000 units of e-hailing taxi. The service entity permit provisional licence is subject to annual renewal with a renewable fee of ₦5 million ($12 000) for every 1 000 units of e-hailing taxi.”

Ride hailing companies such as Uber and Bolt with over 1 000 units of e-hailing taxi will be required to pay ₦25 million ($65 000) to obtain a provisional licence prior to operation. This is renewable annually for a fee of ₦10 million ($25 000).

Those ride hailing companies that do not comply will face heavy fines and suspensions. The Lagos State Government has been clamping down on ride hailing startups for a number of times this year as in January it banned tricycles and motorcycles in most parts of Lagos State in a bid to reduce traffic congestion.

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