TC Daily

TechCabal Daily – Lagos imposes controversial and expensive ride-hailing regulations

Olanrewaju Odunowo 12th August 2020

Citing safety reasons, the Lagos State Government has announced new ride-hailing regulations. If this sounds familiar that’s because in January it banned motorcycles on the major roads in the state stating that they were unsafe. Data showed otherwise. This forced motorcycle hailing companies to either pivot or move out of the state.

The new ride-hailing regulations have been in the works for some time now. The state first attempted to regulate the sector in 2016 but a new government changed course. The conversations about the new regulations this year started in February while a government-backed ride-hailing company, Ekocab launched.

Here’s a summary of the new ride-hailing regulations:

Companies such as Uber and Bolt have to pay a new license fee that costs at ₦10 million ($25,814) for every 1,000 e-hailing taxis.
There’s also an annual renewal fee of ₦5 million ($12,907).
All operators must pay the
state government 10% service tax on each ride.
The government wants access to customer data.

The new regulations raise concerns about data privacy and further exacerbates the view of some that the government is anti-innovation. Transportation costs will most likely rise with the absence of motorcycles and given that ride-hailing companies may pass on the costs to riders.

While big players like Uber and Bolt may be able to afford license fees, smaller operators could close shop. Muyiwa examines the new regulations in detail and what the impact will be.

An electric bus manufacturing plant is being built in Uganda. State-owned Kiira Motors Corp is looking to launch in July 2021 and will start with an initial 5,000 vehicles per year. Although most of the bus parts are currently imported from China, the company has plans to make 90% of the parts locally.

Kiira first started in 2007 as a university project. Students from Kampala’s Makerere University joined a global
initiative led by the Massachusetts Institute of Technology to design a 5-passenger plug-in hybrid vehicle.

After the initiative, students and professors kept working on their own project. The result was a two-passenger fully electric car called Kiira EV, manufactured in November 2011. Afterwards, the company also produced prototypes for a five-seater car and a solar electric bus that charged itself in real-time.

Uganda is dealing with a major air pollution crisis. On some days, its capital, Kampala ranks as the most polluted city in the world. The government could be investing in Kiira as one way to tackle the challenge.

Meanwhile, in Kenya, energy company, KenGen, has announced its plans to roll out electric car charging stations in the country.

Egyptian payments startup Paymob has raised a $3.5 million funding round. The round was led by Dubai’s Global Ventures and Dutch Entrepreneurial Development Bank FMO while existing investor A15 also participated. Paymob will use the
money to expand across Africa and the Gulf Cooperation Council (GCC).

Founded in 2015, Paymob enables online and offline merchants to accept payments from their customers using different products and solutions. Its solutions include payment gateway and payment link and its merchants can accept using its mobile wallets, kiosks and loyalty programs in exchange for points.

The startup claims its mobile wallets processes more than 85% of the transactions in the Egyptian market. It also claims that it has seen a 450% increase in merchant onboarding rate since Covid-19 hit.

In more founding news from Egypt, health and beauty services startup, Glamera has received a six-figure seed funding from Saudi Arabia’s Dual Gate Investment Holding.

Airtel has launched its free streaming app Airtel TV in Kenya. The telco previously launched the service in Nigeria in January and shortly after, in Uganda. Airtel and the other telcos are looking to focus more on data
services in the face of competition from over-the-top services. Value-added services such as Airtel TV can help them do that.

In Kenya, Airtel TV will be battling Netflix and Showmax. Its hope will be that customers will choose it because it is free. However, it will need to entice users with a rich content library.

Digital Africa is holding the 8th edition of its annual conference & exhibition from August 25-27, 2020. The virtual conference will feature industry experts who will discuss what’s next for the technology sector in Africa. Confirmed speakers include Prof. Joe Amadi-Echendu, Professor, Engineering & Technology Management, University of Pretoria; Prof. Yemi Osinbajo, Vice President of the Federal Republic of Nigeria; Karima Rhanem, Chief Executive Officer, Africa My Home, Morocco, and Dr. Isa Pantami, Hon. Minister of Communications & Digital Economy. Visit www.digitalafrica.com.ng to learn more and register.

This Friday, August 14th, for the 7th episode of “Building in Africa” we are interviewing, Victor Basta – Founder and Managing Partner of M&A advisory firm, Magister Advisors. Basta has advised on over 120 transactions across 25 years and helped found and build three successful corporate finance firms in the process. His firm is focused on M&A exits and larger financing rounds.

Some of the African transactions Basta’s Magister Advisors has participated in include Twiga Foods’ Series B round and Cellulant’s $47.5 million Series C round. Also, Magister has invested in Kenyan-based transport startup,
Sendy.

Basta will answer questions about how big mergers, acquisitions and public offerings get done. Attendees will be able to ask him burning questions in an interactive session.

The event is open to experienced and aspiring entrepreneurs as well as everyone else who is playing in the African technology industry. Register here to attend the event.

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TechCabal Daily – Lagos imposes controversial and expensive ride-hailing regulations

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