This archive report was first published on 8 January 2020.
Kenya's Transport Sector Transformed by Digital Bus and Truck Hailing Services ¶
Wednesday, January 8, 2020
Kenya's transport sector has undergone a significant transformation with the introduction of digital bus and truck hailing services. These innovations have not only reduced costs for consumers but also increased convenience.
Mobile-supported applications have shifted from taxi-hailing services to truck and bus hailing services, revolutionizing logistics and disrupting traditional methods of operations. The main beneficiaries of this transformation are consumers who enjoy sharp reductions in transport and commuter costs, as well as a high level of convenience.
According to SWVL co-founder and CEO Mostafa Kandil, the service has re-invented Kenya's public transportation, offering fixed bus stops, timings, and prices. The firm plans to roll out a dynamic pricing model in the future, charging customers based on distance.
SWVL, an Egypt-based transportation start-up, launched in Kenya in February 2019, allowing Nairobi riders to commute on fixed fares and routes through mobile phone bookings. The service has increased competition in the sector, cutting fares and haulage fees by almost 50 percent.
Another innovation in the sector is Lori, an e-logistics platform that connects cargo owners to transportation. It offers fuel financing and insurance in case of delays and ensures full utilization of trucking systems. Lori's CEO and co-founder, Josh Sandler, stated that the platform aims to increase the utilization of trucking assets, lowering the costs of goods in Africa.
Currently, it costs between Sh80,000 and Sh100,000 to transport a 20-foot container using trucks between Mombasa and Nairobi, while it costs at least Sh50,000 to transport the same container on the Standard Gauge Railway. According to Knight Frank, the cost of transport takes up between 50 percent and 5 percent of the retail price of goods, making it hard for African products to compete globally.
