Uber Hits A Licensing Problem In Lagos

Car Service Uber which is beginning to gain popular in Lagos has hit a major speed bump. The local government in the state has begun cracking down on Uber drivers requiring them to register for special taxi licenses.

CNNMoney reports that the Drivers of the ride-hailing app in Lagos are being told they must pay a minimum of N100,000 naira per car to the local government for a franchise license with an Annual renewal fee of at least N30, 000 per car.

Any unregistered taxi drivers caught without a license can be fined 50,000 naira ($160).

A spokesman at the Lagos Ministry of Transportation Anofiu Elegushi, told CNNMoney that these government taxi regulations had previously been in place, but rarely enforced.

"It is for the safety and security of our state and ... passengers," Elegushi said. "We have started clamping down on the vehicles that operate under the Uber app without registration."

Drivers must also have adequate insurance and up-to-date safety devices installed in their vehicles, he added. And they must come together in groups -- called franchises -- to register for licenses.

In an emailed statement, Uber told CNNMoney that it's "actively working with regulators" on this issue.

The ride-sharing app has seen significant growth in Lagos in recent months. Lagos is the financial capital of the country and boasts an estimated 18 million residents. Uber said Nigerians have taken more than a million trips since it launched 16 months ago.

The regulatory move and license fees are expected to significantly dampen driver enthusiasm for the Uber service.

Elegushi said Uber is working with the authorities to try to arrange licensing for drivers. He estimates the firm owes the Lagos government 600 million Naira ($1.9 million) in penalties for not having properly registered its business.

Source: CNNMoney