Rising operation costs due to lack of spare parts and a surge in number of high occupancy vehicles is taking a toll on the matatu business. Faced with the reality, some transporters have fast moved to acquire high-capacity fleet in anticipation that the Kenyan government will sooner or later fully implement the new policy on urban public transport. We start to see more and more of these 33-seaters on main city routes, pushing the 14- seaters out of business. Will that trend contribute to decongesting traffic? As expected by experts who informed the new regulation, will it reduce pollution and improve road safety?
One thing for sure: it makes perfect business sense. The Matatu Welfare Association (MWA) reported a 25% decline in the number of matatus on the roads with most being forced to operate at night when the 33-seaters take a break. As of December 2012, the government began enforcing the recently amended traffic act which has significantly increased the penalties for offences. Despite strikes and protests, Matatu operators lost the battle. And are forced to shift to a new business model. Importers of spare parts look at the government’s plan to phase out the 14-seaters, and update their order plans and stockist. In the highly competitive market of Kenya, this new regulation is a game changer.
A typical Nairobi operator makes about Kes4,000 net profit per vehicle per day for city routes (aprox $47), which is about a 30% of daily revenue. Cutting costs with proper management of fleet is crucial to remain in business. Of course, remains a big expense line: the traffic officer's fee...
As for our safety on the road, we can only praise the Kenyan government for trying and pushing. Of course, some matatu drivers are as reckless behind the wheel of a 33-seater as they are in a smaller vehicle, especially during dense traffic hours. All we can hope is that proper enforcement of traffic act will progressively change things. With over 3,000 deaths on the road every year; on the 11,000km of paved roads; that is a death every 3.6kms. And with more road being built countrywide, Matatu regulation is a start. Next, we might look at private cars... but that's another story!
One thing for sure: it makes perfect business sense. The Matatu Welfare Association (MWA) reported a 25% decline in the number of matatus on the roads with most being forced to operate at night when the 33-seaters take a break. As of December 2012, the government began enforcing the recently amended traffic act which has significantly increased the penalties for offences. Despite strikes and protests, Matatu operators lost the battle. And are forced to shift to a new business model. Importers of spare parts look at the government’s plan to phase out the 14-seaters, and update their order plans and stockist. In the highly competitive market of Kenya, this new regulation is a game changer.
A typical Nairobi operator makes about Kes4,000 net profit per vehicle per day for city routes (aprox $47), which is about a 30% of daily revenue. Cutting costs with proper management of fleet is crucial to remain in business. Of course, remains a big expense line: the traffic officer's fee...
As for our safety on the road, we can only praise the Kenyan government for trying and pushing. Of course, some matatu drivers are as reckless behind the wheel of a 33-seater as they are in a smaller vehicle, especially during dense traffic hours. All we can hope is that proper enforcement of traffic act will progressively change things. With over 3,000 deaths on the road every year; on the 11,000km of paved roads; that is a death every 3.6kms. And with more road being built countrywide, Matatu regulation is a start. Next, we might look at private cars... but that's another story!
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