Tough days ahead for startups in some parts of Africa. Aside from the recent ban on bike-hailing in Nigeria’s commercial city, Lagos, Kenya seems to be joining the wagon. The country’s National Transport Authority (NTSA) has impounded vehicles belonging to ride-hailing app Swvl which were said to be operating without a Public Service Vehicle licence. Some of the Swvl drivers in Kenya were also arrested during the operation, according to the Swvl CEO Mostafa Kandil.
“We are continuing to ascertain the cause for the issue with the partner drivers’ operating licenses. Once we are able to confirm what the issue is, we shall communicate it to our captains and suppliers. We shall inform all affected users through the in-app services of potential delays on the routes once we collect all the relevant information,” he said.
Here Is All You Need To Know
- Buses belonging to the Egypt based firm had been operating on some routes with a Tour Service Licence in defiance of strict NTSA regulations.
- Kenya ‘s NTSA said it had asked the police to impound Swvl vehicles and charge the owners.
- According to Kandil, the arrests are based on the status of the operating licenses of their partners, and not Swvl’s own compliance.
- Last year, drivers attached to the matatu-hailing app caved to pressure from the transport regulator by halting services on most of its routes in Nairobi.
- The app service notified users that it was experiencing disruptions on its routes and was working on compliance with the rules laid out by the NTSA.
- NTSA had earlier asked the police to impound Swvl vehicles and charge its crew and owners, accusing the company of using a tour service licence for public service vehicle operations which require a different permit.
Swvl’s Competitor In Kenya Has Suspended Its Operations
- Swvl does not seem to be the only player on the watchlist of the NSTA. Recall that its competitor, Little earlier announced that it was putting a break to its operations since it was founded in February 2019. The first was when the National Transport and Safety Authority (NTSA) in Kenya forced it to do so in October 2019.
- NTSA accused the startup of flouting the rules and regulations of the National Transport and Safety Authority.
“We have been informed that the license our partners use are not the right ones despite being properly registered,” the firm’s Chief Executive Officer Kamal Budhabhatti earlier stated.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer.
He could be contacted at udohrapulu@gmail.com