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A RAY OF HOPE

Digital taxi drivers hopeful to regain income as Covid-19 numbers dip

In Summary

• Business among taxi drivers has been plummeting since the government put in place restrictions to curb the Covid-19 spread.

Bolt branded vehicle
Image: COURTESY

For five years now, James Njoroge, 35, has been operating an online taxi business in Nairobi.

Registered with a taxi-hailing application in the country, he says his business was profitable when he joined the business. He could comfortably make ends meet for his young family but not anymore.

He has faced major losses in the wake of Covid-19.

"The car that I currently operate as a taxi was acquired through a loan in 2017. I was able to repay the loan over a period of 20 months by making a monthly payment of 35,000 shillings)," Njoroge says.

In his view, he is one of the few lucky taxi drivers who had managed to settle their car loans before Covid-19 was hit the country.

Currently, there are about 8,000 digital taxis operating in the country. This is according to Abdul Mohammed, chairman of Online Taxi Drivers of Kenya.

Mohammed says that business among taxi drivers has been plummeting since the government put in place restrictions to curb the Covid-19 spread.

He notes that the night-time curfew has drastically reduced revenues for the public transport sector.

"Our drivers used to make the bulk of their income on Friday and Saturday nights after clients visiting clubs and bars. This is no longer possible due to the night curfew," he added.

He notes that since online taxi-hailing operators require drivers to have the latest vehicle models, most of them took loans to purchase newer vehicles.

"With declining consumer demand, most drivers had their revenues slashed hence they have had a difficulty repaying their car loans," Mohammed says.

Presently, most drivers have defaulted on their bank loans with some in the process of selling their cars to get out of the taxi business.

“Some of my colleagues were unable to pay their loans and two have already sold their cars and left the business,” Njoroge says.

The chairman notes that the digital taxi business is extremely unprofitable in the wake of Covid-19. This has also been attributed to new players joining the industry even as revenues decline.

“The industry remains optimistic that as the numbers of new cases decline and the government restrictions are lifted, the sector will regain the vibrancy it once had,” Mohammed says.

He observed that demand for taxi services was on the rise in the past five years buoyed mainly by a rising middle class who had disposable incomes to spend on comfortable travel.

Alphonse Muturi who has been in the industry for two years also says that since March when the first Covid-19 case was confirmed, his revenue has reduced by half.

"Our regular clients were afraid of infection through public means of transport but with reducing cases, the business is getting revived as clients are regaining confidence in the use of taxis," Muturi said.

George Ochieng’, who is also a taxi driver says that before Covid-19, he made 11 trips daily but it would a good day now if he makes four trips.

Ochieng’ is confident that consumers will return in large numbers to utilize digital taxis as normalcy returns and the economy rebounds.

In an exclusive interview with the Star, Bolt Country Manager Ola Akinnusi said that the firm had to learn how to adapt to these times since life has to go on.

“Consumer behaviour completely changed in the last couple of months, people are going out less and this has negatively affected our business’’ Ola Akinnusi said. 

He explained that his firm is clinging on more innovations to remain relevant in the changing operating environment.  

For instance, restricted movement and closure of some offices reduced the number of people commuting, forcing Bolt to venture into the food delivery business. 

“To remain relevant in the industry we had to think on how we would provide solutions to our consumers through giving affordable service,” said Ola.

Before corona, the global ride-sharing market size had been projected to grow at  55.6 per cent from 2020 to 2021, to reach $117.34 billion by 2021 from $75.39 billion in 2020.

The projection for 2021 is now estimated to be down by two per cent as compared to pre-Covid-19 estimation, data from Markets and Markets, a private research firm shows.