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East African Public Transport Is Going Digital Despite Failed Experiment


June 7, 2020

When a pandemic spreads, so does hardship. When a crisis metastasizes, so does strife. But where problems abound, opportunities are often around the corner. 

In East Africa, there’s an ongoing attempt to make the preceding statement seem like more than the stuff of motivational speakers. In this African sub-region, a crisis might just trigger some big changes in a very critical sector, or not.

In the past few weeks, the public transport system in Uganda, Rwanda, and Kenya has been in the news for basically the same reason. 

There’s an ongoing COVID-influenced effort to formalise and digitise services and payments in the very informal public transport sector which is believed to generate hundreds of billions of shillings in annual revenue — of which a large chunk goes unaccounted for.

In at least three East African nations, concerns about physical cash being a conduit for the virus and the need for more efficient contact tracing efforts have forced governments to rethink the public transport system.

Early last month, Uganda’s Ministry of Kampala Capital City Authority Affairs (KCCA), proposed new regulations for boda-boda (commercial motorcycles) and taxi operations in the nation’s capital city. These new regulations are to form part of the country’s economic plans after its COVID-19-enforced lockdown is lifted.

According to the Daily Monitor, Kampala’s Lord Mayor, Erias Lukwago, quoting the Ministry’s guidelines, stated that all boda-bodas shall operate under digital companies with the use of apps like SafeBoda, Uber, and Bolt.

In Rwanda, the pronouncements that eased the lockdown at the beginning of May came with a note that it would no longer be business as usual for motorcycle operators in the country.

According to an announcement by the Rwanda Utilities Regulatory Authority (RURA) on Wednesday, May 27, commercial motorcycle operators in the country are now required to only accept cashless payments from passengers.

“All motorcyclists in Kigali are required to use meters and cashless payments such as MTN MoMo or Airtel Money,” the directive said. Drivers and passengers should carry hand-sanitizers but they must wear face masks.

In Rwanda, there are up to 37,000 motorcycle taxi drivers and the country’s capital, Kigali, is where 60 percent of those drivers operate. The new cashless directive came into effect on June 1, though the requirement to have metres will be extended to other provinces besides Kigali at a later date.

Kenya was in the news most recently when the National Transport and Safety Authority (NTSA) announced plans to introduce a cashless payment system in public transport. The authority also called for bids from tech companies to install mobile software for matatus nationwide.

Once approved, the digital fare collection system will require passengers to pay the fare using their phones, which will not only help check spread but also aid contact tracing measures. Quite a laudable and plausible move, given that mobile payments are so popular in Kenya that nearly half the country’s GDP was moved via mobile money in 2018.

On paper, it’s a beautiful plan — all of it. Apart from the COVID-19 side of the matter, making cashless payments mandatory in the public transport sector would weed out inefficiency, corruption, and the culture of bribery, hooliganism, and notoriety that the sector is known for.

The problem? History is not friends with this plan; it’s an experiment that has failed before and there’s no way to tell it won’t stumble and fall once again. 

In 2013, Kenya tried its hands at making its public buses or “matatus” go digital. The cashless matatu initiative was a policy move by the government via the Ministry of Transport to clean up the industry.

The new regulations were put forward in a legal notice titled National Transport and Safety Authority (Operation of Public Service Vehicles), published in September 2013, with a deadline set for June 2014. 

Under the new regulations, cash payments were to effectively become a thing of the past in the country’s matatu industry which is believed to generate up to KES 205 Bn in annual revenue.

The likes of Safaricom, Mastercard, Family Bank, KCB Bank, Equity Bank, and Google were all in line to facilitate the cashless matatu scheme and rake in up to KES 2 Bn in annual fees.

However, the cashless scheme never really took off before it died out just one-and-half year after it was rolled out.

What killed it? Or rather, who killed it? Well, it depends on who you ask but the most common explanation is that the system failed due to a lack of support from matatu operators, touts, and the people who do the grunt work generally — all of whom were alienated by the policy.

Kenya’s StandardMedia also reported that the cashless system denied matatu operators extra cash that they would otherwise not remit to the matatu owners. Hence, the policy was sabotaged.

Similarly, Rwanda sought to go down the same route in April 2019 when its Ministry of Infrastructure declared a July 1 deadline for moto-taxi operators to go digital by installing metres or be ousted.

At the time, the authorities pegged the decision to the need to improve access to transport, track reckless driving, and do away with price haggling.

That deadline has since passed without much progress recorded. In February this year, the deadline was reset for May but the coronavirus outbreak forced the country to shelve those plans. It remains to be seen whether the latest directive would do any better.

Featured Image Courtesy: Movinon-Lab

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