Little, Kenya’s ride-sharing startup, is taking its buses off the road in the meantime. With effect from January 9 , 2020, Little buses would no longer be on Kenyan highways.
In a statement, the startup says the services will resume soon but remain unsure of when they will resume operation.
“We deeply regret to announce that the Little Shuttle service has been temporarily suspended effective immediately. We apologize profusely for the inconvenience, but the service will be back with a bang very soon,” reads a statement from the ride-hailing company.
Here Is All You Need To Know
- This suspension would mark the second time the startup is 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.
- Little, nevertheless, resumed operation in late October 2019 under new terms such as adopting the use of 7-seater vehicles like Noahs, instead of buses and 14-seater Matatus.
A Look At what Little Does
- Little Shuttle was launched in February 2019 to offer alternative and technology-based transport service to Nairobi residents in the selected routes.
- Little shuttles allow for public transportation, but leverages more on technology to ease the hustle that public transportation is known for.
- The startup allows riders to book a seat and board at specific times starting at 6:45 am on weekdays, under a frequency of two hours.
- Eight months after unveiling, the startup ran into headwinds with the National Transport and Safety Authority revoking its license over its mode of operation.
- It is a direct competitor with SWVL, the 2019 most funded Egypt’s logistics startup, which recently poured over $14 million of funding into its Kenyan operations.
- Little also partnered with some Matatu Saccos that on board their buses on their e-platform.
- A rider will, however, pay more compared to the normal commuter fare depending on the route as the rates are 10–15 percent high.
Comments
Little suspending its operations in Kenya may not be unconnected with the tough business terrain in the Kenyan logistics sector. Recall that the startup is competing with the likes of Uber, SWVL and other matutu riders. In its latest funding round, SWVL secured a whopping $42 million from investors in 2019 to help it scale its operations across Africa and much of the Middle East, and it would be looking to pour over $14 million into its Kenyan operations. Little, founded by the Indian Kamal Budhabhatti just started its bus services in 2019 and is for now yet to secure a major VC investment. This may be a big challenge for the startup looking to challenge the likes of Uber, SWVL and Kenya’s ubiquitous public transport service well represented in cheap matatus. This is so especially given the fact that poverty rate in the East African country, at 36.1% is still high. However, one thing the startup would be banking on is the fact that the number of internet users in Kenya, at 46,870,422 people, representing a penetration rate of 89.7% is high. Little may therefore be suspending its operations to review its business models; to make room for more equity into the business; to review its compliance with government regulations; or perhaps to finally initiate measures to scale its operations into growth and profitability. Least on the guesswork is however a final shutdown or liquidation.
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