The Amalgamated Union of App-Based Transport Workers of Nigeria (AUATON) has issued a strong demand for the ride-hailing platform inDrive to refund what it describes as unlawful deductions made from drivers' earnings. The union alleges that inDrive incorrectly applied a Value Added Tax (VAT) charge, leading to excessive deductions from drivers across the country.
Details of the Alleged Unlawful Deductions
According to AUATON, its investigation began after reviewing driver invoices. One invoice dated January 1, 2026, showed a total deduction of 20%. This was broken down into a 4.99% service fee, a 7.5% VAT for service payment, and another 7.5% labeled as service VAT.
By January 8, 2026, a subsequent invoice indicated the total deduction had been reduced to 12.5%, comprising the 4.99% service fee and a single 7.5% service VAT. The union contends that the removal of the extra 7.5% charge labeled "service payment VAT" confirms it was an illegitimate fee in the first place.
Union's Demands and Threat of Legal Action
In a statement released by the union's National Ex-officio, Comrade Jossy Adaraniwon, AUATON has called for immediate action. The union is demanding a full refund of the 7.5% it says was illegally deducted from all drivers during the period it was applied.
Furthermore, AUATON is seeking an additional 4.99% compensation to be paid back to driver accounts. The union has warned that failure by inDrive to comply will result in legal proceedings. Adaraniwon accused the company of "dubious corporate violation of trust and data manipulation" concerning VAT tax.
Call for Regulatory Intervention and Policy Review
Beyond the immediate refund, AUATON is pushing for broader regulatory scrutiny. The union has formally called on the Federal Inland Revenue Service (FIRS) to launch an immediate investigation into inDrive's practices.
Adaraniwon also criticized what he termed a discriminatory VAT regime that seemingly targets app-based drivers while exempting other transport operators. He urged tax authorities to suspend the current policy and engage in meaningful dialogue with both driver representatives and app companies to develop a fairer framework for the sector.
"Our recent publications exposed these inappropriate and fraudulent deductions, and for this reason, they have decided to make a sharp amendment by deleting the service payment VAT but have refused to make a refund," Adaraniwon stated. He emphasized that the union will not stand by while the financial rights of its members are violated.
