PROFITABLE BUT...

Explainer: How to get into the matatu business

It is capital intensive. You will need at least Sh3 million.

In Summary
  • The NTSA has several requirements that matatu operators must meet before they are allowed to carry out the business.
  • You need to make sure you comply with every one of them to avoid hefty fines.
A busy matatu stage.
A busy matatu stage.
Image: FILE

Kenyans love to hate matatus. Whether it’s the rowdy touts, drivers’ bad road manners or lack of comfort, there’s always something to complain about public transport.

However, in the absence of commuter trains and flights costing an arm and a leg, chances are you will take a matatu to work, school, home, from work or to go sightseeing.

For matatu owners, business can be brisk. One can make between Sh6,000 and Sh10,000 after fuelling for next day and paying the crew. This translates to up to Sh250,000 per month if you factor in days off for crew.

So how does one get into the matatu business?  

The matatu business is capital intensive. You will need at least Sh3 million to invest in the vehicle, pay for licences, sacco registration and other expenses.  

The vehicle 

Matatus are categorised into six classes. Class I are 14 seaters, Class II are minibuses for 15 to 25 passengers, Class III are also minibuses ferrying 25 to 40 passengers. Class IV are buses with a capacity of 40; Class V (urban buses with 40-passenger capacity) while Class VI are double-decker buses ferrying more than 40 passengers. 

The higher the capacity, the more you are likely to spend on buying the bus. The cost can also vary on based on whether you’re buying a new, used or importing a second-hand vehicle.

With calls to ban the 14-seater matatus, you’re best advised to keep off them.

You will also need to modify the vehicle to meet specifications outlined by the National Transport and Safety Authority.  

The vehicle must have a valid inspection certificate, a valid insurance cover; a valid road service licence.

It must also meet all requirements regarding speed govornors, seating specifications, safety belts and any modifications.

If you have a music system, you will need a permit from the Music Copyright Society of Kenya

NTSA compliance

The NTSA has several requirements that matatu operators must meet before they are allowed to carry out the business. You need to make sure you comply with every one of them to avoid hefty fines. Below are some of the requirements.

The vehicle must have a valid inspection certificate, a valid insurance cover; a valid road service licence.

It must also meet all requirements regarding speed govornors, seating specifications, safety belts and any modifications.

If you have a music system, you will need a permit from the Music Copyright Society of Kenya

The crew must also have a PSV licence and meet other NTSA requirements.  

You will also need a permit from the county government to operate a matatu business in the route that you select.

You might need about Sh300,000 to get all of these sorted. 

Sacco registration

Once you identify the route you want to operate in, you will need to identify a matatu Sacco to join. Saccos are a mandatory requirement for all matatus. They act as a lobby and also protect business owners.

Sacco registration might cost from Sh20,000 to Sh50,000 based on capacity and route.

Ready to hit the road?

Once all the legal requirements are done you can take you vehicle for Day One of business.  

The business should ideally be self-sustaining if you get an honest crew that delivers on targets.  

However, police crackdowns, accidents and maintenance costs can make returns slim or one may end with losses.