This archive report was first published on 3 October 2019.
Matatu Cartels Targeting SWVL, Little Shuttle in Nairobi ¶
Published on October 3, 2019
Kenya's matatu sector is notorious for its rowdy, messy, and chaotic nature, with millions of commuters relying on it for transportation. However, beneath the surface, cartels are raking in billions from the sector's inefficiencies.
The government's failure to streamline the sector has led to the rise of cartels, which would not risk losing their source of income. As a result, the government is targeting ride-hailing services like SWVL and Little Shuttle, which have brought sanity to the sector.
On Monday, Little CEO Kamal Budhabhatti received an email from the authorities, stating that the company was not allowed to hail shuttles on Little. The shuttles were from licensed partners, but the authorities claimed that the license was not the right kind.
Despite the inconvenience caused to thousands of commuters, the government only woke up after 7 months of the service, realizing it was on the wrong licensing. The National Safety and Transport Authority (NTSA) Director General Francis Meja stated that the authority had blacklisted SWVL and Little Shuttle for allegedly violating operation rules.
Meja claimed that the two companies were operating in Nairobi contrary to their licenses. However, Budhabhatti argued that the companies were running point-to-point shuttle services on their Little App, which were efficient, trackable, on-time, clean, and safe.
Budhabhatti called for dialogue with the government, stating that it would have made more sense to work together to change the face of public transportation in the country. He added that the companies had been running the services for three quarters and had proved that public transport could be operated in an efficient and profitable manner.
However, the government is targeting the disruptors, seeking to bring sanity to the sector. Budhabhatti stated that over several months, they had learned what worked and made changes to their technology to increase efficiency. He hoped that their efforts would not go in vain.
Interestingly, when Safaricom launched M-Pesa, there was similar opposition from banks, which felt that the sector was not regulated by the laws available then. However, the Central Bank worked with Safaricom to formulate the legal model to govern the new innovation.
Budhabhatti prayed that a similar approach would be taken in this matter. He added that SWVL had also been harassed by county askaris and had their vehicles towed. Most operators had to find ways of picking their customers to evade the chaos meted against them.
Meja stated that the NTSA had blacklisted the specific vehicles operating under the two companies, invalidating their licenses. He added that the two companies would only be able to operate when they complied with the PSV Regulations.
