This archive report was first published on 24 September 2019.
As the city of innovation, Nairobi has long been a hotbed of disruption and competition. However, this story is not limited to technology hubs, but is also playing out in real-life business situations.
From kiosks and petrol stations turning into drop-off points for parcel and e-commerce companies, to the SGR taking away trucking business on the Mombasa Highway, and plans for the Naivasha dry port leading to an atrophy of Mombasa courier firms, the transport space is undergoing significant changes.
Instagram is disrupting clothes shops at malls, while supermarkets are offering ready-cooked food based on the amount shoppers want to pay, disrupting restaurants. Co-working spaces, which disrupted offices, are now being partially replaced by bars that offer Wi-Fi, coffee, car washes, and free parking.
However, the most interesting developments are in the spaces of food delivery, cargo transportation, and matatu commutes. In food delivery, companies are competing with apps of taxi companies and platforms used to pay electricity and water bills.
Cargo transportation, which accounts for 35 percent of the cost of some goods in Africa, offers big opportunities. New companies aim to work with truck owners and drivers, pairing them with opportunities to make timely deliveries of cargo for other companies, when their trucks would otherwise be idle or running empty on the highway.
Finally, in the area of passenger transport, mega disrupters like Uber and Matatus are themselves being disrupted. New tech-savvy transport companies have interesting routes all over Nairobi, such as from residential areas like Ruiru, Kitengela, or Kahawa Sukari to business hubs like Westlands and Upper Hill.
These new companies offer free rides, allowing passengers to get to work in half the time by booking a ride in advance on an app and paying a flat fee of Sh200 per journey. Some even offer comfortable shuttles with Wi-Fi, not the old, creaky matatus that serve many 'posh' areas of Nairobi.
However, with too many players in the space, consolidations are expected. The government's Bus Rapid Transit (BRT) plan envisions a similar system of rides that bypass the CBD, such as from Kangemi to Imara Daima (Ndovu route) and from Bomas to Ruiru (Simba route).
Already, margins are thin or non-existent as companies try and drive their competitors out of business. A few weeks ago, there was another round of taxi strikes as drivers complained that the lower-priced tariffs were not making money for them.
