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Uber, Bolt Fares to increase as Lagos introduce new tax rate



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High rate of tax newly introduced by the Lagos State Government could increase fares paid by customers of ride-hailing services such as Uber and Bolt per trip.

This comes barely weeks after the Babajide Sanwo-Olu administration increased LAGBUS fares by 46 percent

The new regulation for e-hailing taxing services is set to come into effect on August 20, 2020, and as such, the state government will collect taxes, licensing fees, and then a percentage from every trip completed on these platforms.

This is according to a document titled, ‘Guidelines for Online Hailing Business Operation of Taxi in Lagos State 2020’ issued by the Lagos State Ministry of Transportation.

According to Part 4.1 subsection 5 of the document titled, ‘e-Hailing Taxi Operation’, all drivers must pay 10 percent generated on every trip to the Lagos State Government.

“All operators of e-hailing taxi service must pay the state government 10 percent service tax on each transaction paid by passengers to the operators,” the document partly read.

The new policy also mandates all e-hailing taxi firms to pay N25m yearly to the state government per 1,001 vehicles for an operational license while they will pay N10m yearly for renewal on every 1, 001 cars in their pool.

“While operators kick against this provision, if it goes ahead to be implemented on August 20, the real losers will be the customers. Uber and Bolt will pass this 10 percent cost along to end-users, making cab fares more expensive,” according to TechCabal.

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