Has specific phosphohydrolase activity towards sphingoid base 1-phosphates. Has high phosphohydrolase activity against dihydrosphingosine-1-phosphate and sphingosine-1-phosphate (S1P) in vitro (PubMed:12411432). Sphingosine-1-phosphate phosphatase activity is needed for efficient recycling of sphingosine into the sphingolipid synthesis pathway (By similarity). May play a role in attenuating intracellular sphingosine 1-phosphate (S1P) signaling. May play a role in pro-inflammatory signaling (PubMed:17113265). Plays a role in the regulation of pancreatic islet beta-cell endoplasmic reticulum stress and proliferation (By similarity). {ECO:0000250|UniProtKB:Q810K3, ECO:0000250|UniProtKB:Q9BX95, ECO:0000269|PubMed:12411432, ECO:0000269|PubMed:17113265, ECO:0000269|PubMed:31916624}. This is the function of SGPP2 (sphingosine-1-phosphate phosphatase 2, ENSG00000163082).