This archive report was first published on 17 August 2019.
On August 17, 2019, SWVL announced plans to transition from its current fixed pricing system to a dynamic pricing system, where the cost of a trip will be determined by factors such as distance and time.
This move comes on the heels of a partnership with BRCK to provide free WiFi on board SWVL commuter buses, announced just days prior.
Under the current system, SWVL charges a flat rate of 200 Bob per trip, regardless of distance, time taken, or pickup/drop-off points.
SWVL's dynamic pricing system aims to strike a balance between affordability and profitability, a move that could be make-or-break for the company.
SWVL's Dynamic Pricing Challenges ¶
Implementing dynamic pricing may pose significant challenges for SWVL, including slower pickup and drop-off times, particularly if passengers continue to pay in cash.
- One potential issue is the potential for route disruption, as passengers may opt for shorter routes at lower prices, potentially affecting revenue.
- For example, a route from Kikuyu to Nairobi CBD, previously priced at 200 Bob, may see a significant decrease in revenue if the distance between Kikuyu and Westlands is priced at 50 Bob.
SWVL's success in disrupting the matatu industry will depend on its ability to balance pricing with profitability, while also providing a unique and reasonable service.
The company has already expanded its routes from 2 main routes to 55, indicating a growing demand for this style of transport in Kenya.
SWVL's only competition in Kenya comes from Craft Silicon's Little Shuttle, which has recently announced Little Longhaul for long-distance travels, with its first route being Nairobi to Nakuru.
