Uber, an American multinational online transportation network company, is currently facing a big licensing challenge that may threaten its continued existence in Lagos, Nigeria.
The local government has begun cracking down on Uber drivers, requiring them to pay huge sums to register for special taxi licenses.
Drivers of the ride-hailing app in Lagos are being told they must pay a minimum of 100,000 naira ($320) per car to the local government for a franchise license.
Anofiu Elegushi, a spokesman at the Lagos Ministry of Transportation, said these government taxi regulations had previously been in place but were not enforced.
By his estimate, the firm owes the Lagos government N600 million ($1.9 million) in penalties for failing to properly registered its business. He added that Uber was working with the authorities to try to arrange licensing for drivers.
“It is for the safety and security of our state and passengers. We have started clamping down on the vehicles that operate under the Uber app without registration,” Elegushi said in an interview with CNNMoney.
During its two years in operation, the ride-hailing app has, Uber says, “facilitated” over a million trips.
After its first 16 months, Ebi Atawodi, general manager of Uber Nigeria, claimed the service grew 30% faster in Lagos than it did in its first 16 months in London
An Uber spokesperson said the company is “actively working with the regulators” to shape its future in Nigeria.
But in the short term its service could be disrupted.