A storm is brewing in the matatu sector as three technology companies plan to introduce mass transport apps.
Little Cabs, Safiri Express and Egypt-based Swvl have vowed to disrupt the matatu sector.
The three tech firms are testing ways to get customers to destinations with fewer stops, at affordable prices, while maintaining high quality and safety standards.
About 30,000 matatus get into Nairobi CBD, with an average capacity of 25 passengers. They spend about one and a half hours in traffic to carry 750,000 Nairobians in and out of the CBD during rush hour.
This means the sector transports 1.5 million Kenyans every three hours during morning and evening rush hours. The rest of the human traffic is taken in and out of Nairobi during off-peak hours.
Speaking to the Star, Little Cab CEO Kamal Budhabhati said they have set aside more than Sh40 million to unveil Little Cab’s e-shuttle service to the public before the month ends.
“We have noted a lot of chaos and inconsistency in the matatu business, despite them providing good transport,” Budhabhati said. “They are not organised.”
The craft silicon founder currently runs Little e-shuttle services from Kahawa Sukari to Westlands, Bomas to the CBD via Upper Hill, and Kinoo to South B routes.
PROBLEMS FACED
Also planning to carry out a pilot is
Safiri
Express, which intends to launch before this quarter ends. This will be their second pilot. Swvl has already launched into the market after piloting along Thika Road.
“The top three issues we noted in our first pilot were unpredictability, poor transit experience, and price fluctuation on the demand side,” Zulekha Mwanzi told the Star. Mwanzi is the co-founder and CEO of Sure Corporation, the parent company of
Safiri
Express.
On the supply side, she said the problems faced are lack of revenue assurance and integrity, poor operating environments in the saccos, poor capacity utilisation, poor fare economics with lots of undercutting, and harassment.
Swvl has raised about Sh3.8 billion in funding to support its expansion to different parts of the world, including Nairobi, where drivers reportedly recorded empty trips on the first days of piloting.
Head of operations Shahzeb Memon said they have pumped about Sh5 billion into the Kenyan market and intend to employ more than 100,000 drivers.
Interestingly, Uber, which was the first to introduce digital taxis in the country, is not interested in local public transit.
“While we are always looking at new features and products, this is not something we are looking at launching in Kenya, or across sub-Saharan Africa, at this time,” East Africa Uber spokesperson Janet Kemboi said.
Even so, the US-based firm launched its first bus service globally in Egypt last month.
HOW IT WORKS
Unlike matatus, commuters will be required to book a seat at the e-shuttle through mobile applications.
Most of the service providers consider using shuttles of at least 33-seater capacity, and with no conductors in the long term.
After about eight months, for Little Cab.
“The model is the same as those of cabs, save for the timeliness and pick-up point factors,” Budhabhati said.
Once a booking is made, a seat is reserved and the commuter picked and dropped at pre-determined stops.
“We shall provide alerts on time and distance to your closest pick-up location, often a short walking distance from where you currently are,”
Safiri
Express says on its website.
However, Budhabhati said this is likely to change in future, when the service gains momentum in the market. Commuters will be able to stop the shuttles through the application in the nearest destinations.
Operation routes, pick-up and drop-off points for the three firms are determined based on demand.
However, future changes will be determined based on data collected by the shuttles once in operation.
EXPERIENCE AND PRICING
From an experience perspective, Brehven Otieno said his pick-up was seamless on his first ride, as the bus arrived at the time estimated in the app.
However, his drop-off time was about 11 minutes late, due to traffic congestion on Ngong Road.
Swvl currently operates along Thika Road, and on Ngong Road from CBD, using the Toyota Coaster mostly used for tours.
“Apart from traffic, the shuttles are cleaner and more spacious than the matatus currently ruling the public transit system,” Otieno says.
On pricing, Little’s CEO said it’s likely to be approximately 25
per cent
more than the current pricing. For instance, a commuter who travels from the city to Gachie will pay about Sh75 and not the normal Sh60.
Swvl, on the other hand, will charge Sh10 for every kilometre. This means a commuter moving from the CBD to Thika, which is roughly 40km, will have to part with about Sh400, as opposed to the current Sh100 on average.
The payments will be cashless, as no cash payments will be allowed.
For
Safiri
express, as explained by Mwanzi, their second pilot is aimed at testing price sensitivity and mapping out routes for revenue maximisation.
Just like in the cab business, the firms intend to grow their fleet of shuttles by signing up matatus onto their platforms.
“We are already having discussions with matatu saccos on how we can work together. Once we agree on the way forward, we shall make it public,” Budhabhati said.
Swvl said it is also having discussions with saccos for a partnership. Memon said while they intend to bring original equipment manufacturers into the country, their first 100 shuttles will be imported.
WILL MATATUS AGREE?
Matatu Welfare Association chairman Dickson Mbugua said they will frustrate the plan. He said the move is ill-advised and will result in unfair competition in the industry.
Mbugua said NTSA should be reprimanded for allowing the companies to venture into the business “through the back door”.
“We have forwarded this matter to the relevant authorities, including the Infrastructure ministry. We have a multi-agency stakeholders meeting and this will be the top agenda,” he said.
“We cannot be going into BRT induction and implementation at the same time embrace other modes of transport. This is retrogressive and we ask the government through the ministry to act.”
Mbugua said the matatu sector is supporting the BRT system for urban mobility because it will play a key role in decongesting the city, but that should not mean other players should be sneaked into the business.
“Our focus, for now, is the BRT, hoping that later, with the good infrastructure, we will realise the Mass Rapid Transport. However, the introduction of technology companies into the picture is an indication that such a plan will not work,” he said.
“We cannot be phasing out 14-seaters from the matatu sector only for NTSA to issue licences to other players in the name of digital buses. The plan must be suspended irrespective of the mode of the system used.”
Mbugua said there are interdepartmental wars between NTSA and the Nairobi Metropolitan Area Transport Authority, Namata.
Matatu Owners Association chairman Simon Kimutai was unavailable for comment.
NTSA SLAMS ‘ILLEGAL’ BUSINESS
Asked if it had issued licences to the technology companies, NTSA dismissed the claims.
Director general Francis Meja told the Star they had not received any request from the tech companies notifying them of their intention to venture into the matatu business.
“In fact, as we speak,
the
said companies are engaged in illegal business, and we have authorised police to arrest them. They cannot purport to carry passengers, whether on a pilot or whatever reason, without seeking authorisation from NTSA,” Meja said.
He said they don’t object to tech companies venturing into the business, but they must use the proper channels.
“The sector is governed by rules and regulations, and if they cannot adhere to them, how are we certain that if we issue them licences, they will abide by them?” the DG said.
In their defence, Memon said,
“All the buses of Swvl are fully compliant with the existing rules and regulations of the county.” Little Cab and Safiri
have not yet responded.
Infrastructure Secretary and Namata CEO Francis Gitau said the authority also has no objection against the companies venturing into the business.
Gitau said the only undoing of the digital matatus is that they will still get stuck in heavy traffic, which will still not do justice to passengers.
“They say they are spacious, cleaner and no touts, but then why should anyone pay higher fare, knowing he is going to get stuck in the same traffic?” Gitau said.
He said if the digital matatus have a plan of serving in the business, they can seek to explore the feeder routes, especially those that will be used to service the BRT system.
“BRT will be operating on specific routes. The buses will not be moving in estates to pick passengers. Maybe this is an opportunity for them to enter into a partnership and ensure that passengers get in time to their picking points, instead of battling with other operators over inner circle in the CBD,” he said.