Swvl just made in roads into Kenya, but all that has been put to a stop by Kenya’s National Transport and Safety Authority (NTSA), the authority in Kenya in charge of road use and safety. Digital public transport services SWVL and Little Shuttle were asked to cease operations or face arrests for operating under Tour Service License but engaging in commuter services.
“We have shut down their (Little and SWVL) licenses because there are comprehensive regulations on how to operate a PSV,” NTSA director general Francis Meja said.
Here Is All You Need To Know
- SWVL and Little Shuttle were poised to disrupt the public service sector by providing booking options, extra comfort and scheduled departure times in the chaotic segment.
- In a notice from the NTSA Deputy Director Communications Dido Guyatu, the authority said it has blacklisted specific vehicles operating under the two companies and their TSL invalidated.
- NTSA indicated that both firms had been notified of the suspension of operations until the necessary licenses for operating PSV’s were obtained or an exemption from the authority.
“Let them just follow the law so that we can facilitate them to do business in Kenya. Let them come to us… we are open for discussion to allow them do business in Kenya. It’s a fact that you cannot do business in Kenya without a proper license,” said Mr Meja.
In his response, Little Shuttle CEO Kamal Budhabhatti said the company is seeking audience with NTSA on a way forward.
“The buses we operate have countrywide TLB license, which allows us to move on any route. We do not operate as a matatu on fixed route. Our route is based on supply and demand software technology,” he said.
Compliance With The Suspension
A spot check by Nairobi News on Tuesday on Tuesday in Nairobi established that SWVL was still ferrying passengers despite the suspension.
The company’s General Manager in Kenya, Shivachi Muleji, said they are in talks with the government to ensure that they are fully compliant.
Egyptian start-up app SWVL currently has 150 buses on 100 city routes and last month indicated that it would inject Sh1.5 billion into the Kenyan market.
Meanwhile, it is still unclear when Little Shuttle will return to the road.
The app-based service allows users to book trips using their mobile devices, which notifies them of the nearest pick-up point, price and time by the bus.
The driver’s contact and registration number of the vehicle as well as live map update appear on the app interface for easy identification once the buses arrive.
Swvl’s Operation In Kenya
Swvl recently invaded its Kenyan market with over Sh1.5 billion ($14.5 million) investment to finance an aggressive route expansion plan in Nairobi.
- Swvl, already operational on multiple Nairobi routes, has set a target to grow its network to 500 routes served by 1,000 buses.
- The app-based public service transport operator that launched in Nairobi on a test basis seven months ago has already signed up 150 buses on 100 city routes.
- The firm, which started in Cairo, is seeking to take advantage of Nairobi’s chaotic and largely unreliable public transport system.
“Kenya is a market with a need for a stable solution for the perennial traffic snarl ups and SWVL believes that we can be of great benefit to the local consumer and the transport sector as a whole,” said Mr Kandil.
- The tech company leases the vehicles that currently include 11-seater and 14-seater vans as well as 22-seater shuttles at a daily rate of $70 (Sh7,000) and $150 (Sh15,000) to ply the various routes. It tops up the daily collection if the earnings for the day are less than the daily leasing amount, but collects any income above the agreed rate.
- The app-based service allows users to book trips using their mobile devices, which notifies them of the nearest pick-up point, price and time by the bus.
- The driver’s contact and registration number of the vehicle as well as live map update appear on the app interface for easy identification once the buses arrive.
“We’re building a mass transit system. The investment will keep us going in this market,” said Shivachi Muleji, SWVL general manager for Kenya.
- The firm says its popular routes include Ruiru to the CBD/Upper Hill, Karen to CBD/Westlands via Upper Hill, Ongata Rongai to Westlands/CBD via Upper Hill, Ruiru to Westlands, Ndenderu to CBD/ Upper Hill, and Kikuyu to CBD/ Upper Hill.
- According to Mr Muleji, the company is in negotiations with local Ford dealers and a financial institution to provide vehicles at 20 percent cheaper than the market rate as well as financing options for drivers. This is aimed at growing its bus network to meet the demand of the planned route expansion. The app company, which has received pushback on some of its routes from PSV (matatu) operators, says it is engaging some Saccos in the sector to invest in the business.
- The service currently charges a flat rate of Sh200 but has plans to offer distance-based pricing at the end of 2019 or early next year.
“Kenyans are picky consumers so you have to offer a premium service for the extra 10 percent you charge,” said Mr Muleji.
- Read also: Egyptian Transport Startup Swvl targets Nigeria, Africa And Asia before the end of 2019
- Tech-based solutions in the transport sector have been causing a ripple locally with Uber making its entry in the taxi business several years ago despite protests by taxis at the onset.
- Kenyan-based Little Cab also offers a similar shuttle service in the market while Safiri is still in the pilot stage of data collection.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world