Lagos State Introduces New Guidelines for Ride-hailing Operators (Details)

Lagos State Introduces New Guidelines for Ride-hailing Operators (Details)

Lagos State Government through the Ministry of Transportation has rolled out new e-taxi operation guideline. The new guideline established among other things, Taxi system model, Regulations on e-Taxi operations, Penalties for non-compliance among others. 

Lagos State in recent times has not failed to exercise its legislative authority. Again, the state has made another tough decision concerning the transportation sector.

Being in the economic hub of Nigeria and by extension, Africa comes with its own cost. However, for the transportation sector, it appears as though, comes at an overwhelming expense.

At the start of the year, sometimes in February, the bike-hailing operation met its fate. Barely four months after, another stringent guideline was released for dispatch operators. Now, the Lagos State government is clamping down on e-taxi operations.

The state, after regulating the activities in the transportation sector, appears to hold a lot of excesses. In this article, we will take a look at some of the most important highlights of the new e-taxi guidelines.

Identified Problems

Solutions exist only because a problem exists somewhere. According to the new guideline, the Taxi business in Lagos is confronted with a lot of challenges. Some of them include violation of operational regulation, increasing road accidents, among others.

There are also arising concerns for lack of proper training of drivers on road traffic, and regulations. The interests also cut across vehicle maintenance and inaccessibility to the transport sector reform law (2018).

Although the majority of the state government’s concern is about regulating the transportation sector, the e-taxi business will be most affected by the new guideline.

Goals, Objective and Targets

To solve all these challenges, LASG has set up specific goals, objectives, and targets. These will guide their decision making and subsequently reposition the transportation sector.

Some of LASG’s goals include the elimination of illegal Taxi business and promotion of public transportation. The state also wants to curb human abduction by developing a database for operators.

As for the objectives and targets, LASG intends to enhance road traffic rule compliance. It wants to conform to the global standard in the operation of the taxi scheme. Most importantly, the state seeks to promote the safety of life and properties of Lagosians.

Taxi Standards

The law provision in the guideline sets a standard for all taxi operators. Highlights of the regulations include the prohibition of an unregistered vehicle. Reckless and inconsiderate driving, registration and Licensing of vehicle, among other general provisions.

According to the new guideline, taxicab will now operate within the capacity of the LASG taxi system model. Hence, operators will be required to acquire such a license to be able to work.

The new system also categorizes the taxi business into two different entities. One is ‘service entity’, and the other ‘taxi and app operators’.

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The Service Entity refers to app developers such as Uber, Bolt, Ocar, and their likes. This category of the Operators does not own a fleet of cars. However, they connects to drivers who operate taxicab via apps.

The Taxi and App Operators, on the other hand, refers to an individual or corporate body. They own and operate both apps and vehicles.

Both entities will be treated separately, and the cost of the application will vary across the board. However, other policy bounding taxicab operations in the state applies to both entities.


The Ministry of Transportation shall issue all operational licenses. “The Ministry shall issue taxicab/App operating license and other licenses so prescribed from time to time by this policy at a prescribed fee for the operation and provision of taxicab services.” A part of the guideline reads.

Going further, the license will be issued to individuals, firm, partnership, corporation, cooperative and association with a franchise to operate under the Lagos State Taxi System.

Interestingly, all registered individuals will now be prompted to make use of what the guideline referred to as “taxicab license instrument”. This is an electronic box with the word ‘TAXI’ ascribed to it. The instrument identifies and legalizes the operation of a taxicab operator within the state.

There is, however, an exception to the use of the taxicab license instrument. “A franchisee may only remove the taxicab license instrument from the vehicle for the purpose of a taxicab license instrument to the designated Ministry office.” A part of the guideline reads.

Upon expiration, an operator or franchise will be prompted to re-apply for a new license. The renewal will take place annually from the moment the license is initially granted. Additionally, the renewal application must be filed at least a month (30-days) ahead.

Among other necessity, the taxicab will be equipped with a taximeter approved by the Ministry. Also, the franchisee’s vehicle will be scheduled for a durational inspection by the Ministry, and if flouted, will be subjected to missed inspection penalties.

Taxi Cab Requirement

For many, including us, this is the most worrisome part f the guideline. The new guideline requires that a vehicle used by a franchisee or individual must be brand new.

In a situation where a franchisee cannot afford a brand new car, then he or she can opt for a vehicle within its initial 3-years of its manufacture as specified by the manufacturer.

It is, however, not clear if a brand new car will seize to serve a legitimate purpose for a taxi cab after 3-years or 6-years. Although, it was stated in the guideline that the Ministry will determine the fitness of a taxicab vehicle.

Taxi Stands

This new development is expected to accommodate more participants under a single umbrella. As such, LASG included in the guideline, that various taxi stands will be constructed.

This stands will be built along public highways and streets of Lagos. Also, they will only be used exclusively by registered taxicab owners or franchisee.

Entity Permit/Renewal

As stated earlier, the taxicab system is categorized into two- Service Entity, and Taxi & App Operators. Both entity are charged separately and are expected to function within the capacity of their provisional licenses.

To begin with, the Taxi & App Operators. Operators will be required to apply for Operator’s Provisional License (OPL). The application will attract a fee of ₦5,000,000.00 for 50 units of cabs. An operator will pay ₦10,000,000.00 for a total cab unit upward of 51. Take note that this payment must be made before operations.

Besides, Operator will be required to renew this provisional license annually for a fee of ₦1,500,000.00 for 50 units of cabs, and ₦3,000,000.00 for cab unit upward of 51.

As for Service Entity, the charges are a bit on the high side. Here, Operators’ application attracts a fee of ₦10,000,000.00 for every 1000 units of e-hailing taxis. An operator will pay ₦25,000,000.00 for a total e-hailing taxi unit upward of 1001.

Additionally, Taxi & App Operators will be required to renew their license annually. They are expected to pay a renewable fee of ₦5,000,000.00 for 1000 units of e-hailing taxi, and ₦10,000,000.00 for upward of 1001 units of e-hailing taxi.

Other exceptional fees include a 10% service charge required of operators of e-hailing taxi services. This charge is, however, not required to be paid by Taxi and App operators.

Operators will also be required to pay a fee of 5,000 to reaffix a taxicab license instrument. 5,000 fee to reorder and replace a taxicab license instrument. 5,000 fee to replace a taxicab license (hard card)card.

Below are some of the criteria/required documents to register a taxicab or perhaps change of equipment (COE);

  • A completed, signed and dated COE request form on a form prescribed by the Ministry;
    • Title of vehicle or manufacturer’s certificate of origin;
    • A Bill of Vehicle Sale or VehicleLease;
    • Taxicab licence (hard card) card;
    • Special Plate number
    • Allocation of plate number form
    • Proof of ownership
    • Pre-registration InspectionCertificate
    • Roadworthiness Certificate
    • Insurance policy(Comprehensive)
    • Vehicle license
    • HackneyPermit
    • Approved Route Document (BodyTag)
    • Drivers’ Barge

Penalty for non-compliance

With so much said by LASG, non-compliance to the new regulations will not be overlooked. As such, both Taxi Operators or App deployment Organization will be subjected to various penalties upon violation.

Some of the penalties included in the guideline require a fine of ₦100,000.00 for non-compliance to the general guideline. Acting in defiance to the new provision will not also be tolerated. This could lead to an eventual revoking of entity permit.

Implementation Strategies

Lastly, going about the new guideline will not make so much sense without implementation plans.

LASG through its stakeholders like VIS, LASDRI and LASTMA will partner with the Taxi operators. On the back of this partnership, the Ministry will organize public enlightenment. It will make use of print/electronic media, workshop, and seminars to create the necessary awareness.

Once all of these are achieved, LASG will proceed with enforcement using legal authorities. The Vehicle Inspection Service (VIS), Nigeria Police, LASTMA, and FRSC will all be involved.

Effect on Foreign Investment

Although the new initiative is a good one; it could provoke foreign investment in the state. Foreign investors are often afraid to invest in a region where the government decision is unpredictable.

As much as the Lagos State government decision is unpredictable, it is often stringent. Over the last 7-months, LASG has revisited the laws binding the transportation sector on multiple occasions.

Just about six-months ago, traditional motorbike and tricycles were banned from major ways in the state. Bike-hailing operators like Gokada,, OPay was greatly affected.

While most of them were trying to diversify into dispatch operations, another stringent law was also revisited, limiting such activities.

As a result of this uncertainty in government decision, Opay recently took a pause. The Opera-owned multi-lateral platform had most of its operations distorted by unfavorable government decisions, leading to an uncertain future in the state.

Opay is not alone in this. Lagos state is one of the most industrial across the nation, and one would naturally expect more from its government.

Provision of stringent laws or policy by the Lagos state government will only hinder future investment. If more caution is not taken, foreign investors may be pessimistic when it comes to investing in startups, or perhaps setting up businesses.

Impact on Lagosians

In the long run, the new guideline could possibly influence the average citizen. Requesting operators to use recently-manufactured vehicles as cab will trigger operational costs. Subsequently, leading to a spike in cabbing price.

You will be marveled at what effect the new guideline will have in the transportation sector. However, we can hope for the best.

About The Author

Kingsley Alaribe is a Digital Marketer with 1stNews, and writes the weekly column, Strangers and Lovers. He is also a Data Scientist. Email: [email protected]

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