Cut-throat race: Why matatus are unwilling to increase fares

Matatus at Kakamega-Eldoret bus stage in Kakamega town. The sector operates in an environment with little regulation or price control. [Mumo Munuve, Standard] If you are a frequent user of public transport in Nairobi, then you must have come across the 'Hakuna stage ya kumi' (There is no Sh10 fare destination) sticker notice. It is a rather passive-aggressive way of informing customers that the least you can pay for the shortest distance is Sh20. It was such a common sticker when then Health Cabinet Secretary Mutahi Kagwe spelt out directives for half capacity in public transport back in 2020 to contain the spread of Covid-19. Matatu fares have since been on sporadic increases almost every year, mainly due to the spiking cost of fuel. Immediately the Finance Act, 2023, was passed, Matatu Owners Association (MOA) announced that fares would go up by between Sh10 and Sh30 in Nairobi. Their justification was the increase of value-added tax on fuel to 16 per cent from eight per cent. "We recognise that our passengers are already struggling with the financial burden and we assure commuters that we are undertaking these fare adjustments as a last resort," said MOA Chairman Albert Karakacha. He said the industry remains committed to providing safe, reliable and affordable public transport service. "We will continue to explore all avenues to mitigate the impact on commuters". Mr Karakacha said the decision was essential in striking a balance between maintaining a reliable efficient public transport system and addressing the economic reality faced by matatus owners. However, if you use public transport in the Nairobi Metropolitan Area, you may have noticed that following the announcement, fares have not gone up as announced; at least on most of the routes. A spot check by The Sunday Standard found that the majority of the operators have not adjusted their prices. For example, transport to Kawangware still oscillates between Sh50 to Sh70 depending on the time. Matatus on the Umoja route, whose charges are unique because of heavy traffic along Jogoo Road and the extra decor in their vehicles such as television screens and graffiti, still charge Sh150 during rush hours and heavy traffic from the city centre. Utawala, MetroTrans and SuperMetro operators still charge Sh100. Ongata Rongai operators have Sh100 as the standard fare with spikes during rush hour. City Shuttle, which restarted its operation on the route sometime at the height of Covid-19, used to charge Sh60 for competitiveness. However, as the prices of fuel increased in 2022 so did the fares to Sh80. Now the operator charges a standard fare of Sh100 following the Finance Act 2023. "Right now, I am charging Sh80 because others are charging Sh100. If I charge Sh100, it will take long to fill up the bus," Ann Nyamonge, a tout based at Kware Stage, Ongata Rongai told The Sunday Standard, a day after the announcement by MOA. Public transport charges in Nairobi, as studies have also documented, are not uniform. As such, it may not be crystal clear if City Shuttle, for example, has increased fares as a result of the Finance Act 2023, or if it is just charging the standard fare which has for long been Sh100. Sometime in 2022, when the price of petrol hit Sh134 a litre, the then MOA chair Simon Kimutai also announced a fare increase. He said the vehicles with 60-litre capacity were consuming fuel worth more than Sh20,000 a month. "We are in business. I have told my members, once you do cost accounting, pass it to the consumer," Mr Kimutai said. Matatu Owners Association (MOA) Chairman Albert Karakacha. [Denis Kibuchi, Standard] "It is common sense. Those using matatus brace yourselves, there will be a hike. Let the consumer climb the tallest hill or building and scream so that those in authority realise they need cushioning by those subsidies that they pay less." A publication titled, The Study on Master Plan for Urban Transport in the Nairobi Metropolitan Area published by Japan International Cooperation Agency (JICA), noted the lack of a fixed fare system for matatus. "Matatu fares mainly depend on the time of the day and the weather conditions. Until recently, the fares were usually higher during peak hours, late at night and during bad weather conditions," the study says. "Nowadays, the fare sometimes is lower during peak hours due to the presence of many competitors. Fares however are still higher late at night and during bad weather." That partly explains why some of the announcements to increase fares have never worked. "In off-peak periods, drivers try to pick up as many passengers as possible on the way, which leads to erratic driving and stopping behaviour. "During congested periods, traffic rules are often ignored (e.g they use the road shoulders or lanes for opposing traffic to by-pass traffic jams)," the study adds. It says the matatu system operates in a largely deregulated environment, and there is little or no government control of, or even influence on, such crucial elements as route structure, operational practices, timetables or fares. Weldon Sigei, an investor in the transport business, says cut-throat competition between operators in the sector also plays a role in why such calls for fare hikes from associations are ignored. "Saccos are under competition and matatus have perfected the art of price (competition). The one that seems to be charging less is preferred by the customer regardless of the services because of the economic situation," he said. Any increase may also be perceived to be anti-people, Mr Sigei said. "There is no unity or kind of an umbrella (to facilitate implementation of the increase); because of competition, we perceive one another as enemies. We cannot sit down and reason and say we are going to increase the fare." He pointed out that not all investors in the business are members of MOA. As such, an announcement to increase fares may only work for MOA members. "Companies no longer trust associations," he said. When it comes to the announcement of fare hikes, MOA is the most vocal. The transport sector, however, has several other associations. They include Matatu Welfare Association, which was once as vocal as MOA, Transport Users Association, Motorists Association of Kenya, Kenya Transporters Association and the Association of Bus Operators Kenya. In 2012, Mr Kimutai was one of the stakeholders who called for a law to control fares. This was also to improve discipline in the sector. "We must have a government-backed authority in our sector just like in the air, railway and marine sectors," he was quoted then by a local daily. However, four years ago, was also opposed to attempts by the government through amendments to the Traffic Act to control how much public transport will cost. "At one time, the government liberalised the economy of this country and price controls were thrown out. We do not know the reason behind the re-introduction of the price controls but I sense mischief," he said. He expressed fears that the sector might collapse if such a law was implemented.

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