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Former teacher steers taxis to prosperity

By | December 1st 2011 at 00:00:00 GMT +0300

By Njoki Chege

One day, on a walk in Kisumu city where he was a teacher at Miwani Secondary School, Jim Irandu bumped into a group of people running away from police.

Curious, he asked what was happening. "I was told those were teachers rioting over delayed wages," he says.

It was then that it hit him, he needed a way to supplement his income. Those days, teachers were not only poorly paid, but their salaries could be delayed up to seven months.

Jim Irandu says technology has greatly contributed in keeping the company together [Photo: Joseph Kiptarus/Standard]

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Remembers Irandu, "The pay was so low, it was never enough or timely. Generally, it was undependable."

He pooled together resources and in 1999, he bought his first taxi, a Peugeot 404, and set the ball rolling. Business was good, and six months later, he bought yet another Peugeot 404. The two taxis operated in Kisumu.

In 2004, he bought a matatu that plied the Kisumu-Bondo-Usenge route, but this business had its twists and turns.

He says: "There were many challenges — from dishonest drivers who stole from me to clashing with the police, it was really tough."

In 2005, he was transferred to Ndakaini Secondary School in Thika. He sold his two taxis and transferred the matatu to Nairobi to ply the 125/126 Ngong –Rongai - Kiserian route. But business got even worse.

"The business was characterised by a lot of dishonesty, police harassment, clashes with the city council and a lot of money was spent on fines, besides developing the business," he says.

Eventually, he sold off the matatu. He decided to become a stocks agent, specialising in opening CDS accounts for clients and advising them on the best companies to invest in.

He worked with stock brokerage firms such as Bob Matthews, Reliable Securities (now Old mutual securities) and Africa Alliance. For a while, business was good, until the stock market plummeted and he called it quits.

At the meantime, he had bought a small car, which he leased out to a taxi company that paid him a fixed amount every month.

Taxi money

"The business was great. My expectations were met, and six months later, I bought another small car which I leased out to the company. Sometime later, we pooled resources with my wife and bought a third car which we took to the same company," he explains.

All the while, he was still a teacher at Ndakaini Secondary School, and would come to Nairobi over the weekend to do business.

When he realised the potential of the taxi business, Irandu teamed up with a partner — Newton Kagundu and registered Kenepe Tours and Car Hire in 2009.

"After more than ten years of teaching, I quit my job and formed Kenepe Tours. We began with only four cars," he says.

As Irandu explains, the company mainly specialises in taxi and car hire. It also accepts leased cars from other clients, whom they pay a certain fee every month.

At the moment, the company has a fleet of 20 cars and vans. Kenepe’s core business is taxis, and they have stations all over town including Upper Hill, Westlands, Mombasa road and the city centre.

He says, "it is the goodwill of clients that has kept us going all this time. People have entrusted us with their cars and corporate clients have contracted us to do business with them."

Technology, has also greatly contributed in keeping the company together, as Irandu notes. The company has invested heavily in stoic fleet management software, which has seen all cars fitted with GPRS monitoring devices.

"All cars are tracked and we are able to review the worksheet to generate a report and eventually eliminate dishonesty," he explains.

But probably one of the biggest challenges is the skyrocketing fuel prices which have eaten into the company’s profits. He offers, "Due to the skyrocketing fuel prices, this business is no longer about making profit, but about survival — how long you can keep your head up."

As Irandu explains, it is difficult to pass the cost to the consumer who may not understand the rationale of increased taxi fees. Irandu also points out that the small players in the industry are a huge challenge since they distort the market price by charging relatively lower fares than the large taxi firms .

"There are no standard taxi rates especially in Nairobi. The small players in the industry charge relatively lower prices, therefore distorting the market price," he says.

Another challenge is the high cost of spares, and the higher cost of importing these spares. The cost of maintaining the cars is also an extra cost that poses a huge challenge.

Generally, as Irandu reveals, taxi business is a fluctuating and unpredictable business which players have no control over.

"It is very easy to make money, but it is also easier to lose money because there are many factors that control this business that we are not in control of," he says.

To run a successful cab business, Irandu advises having the right dedicated personnel on board, who have what it takes to make such a business grow.

"Get the right personnel. Have dedicated, passionate drivers who can work odd hours and who serve clients without complaints," he advises.

Investing in technology

Irandu also points out that every cab business worth its salt should invest heavily in technology to secure their cars and manage their fleet with ease.

Honesty is also key in surviving in this business. In an era where people buy cars and lease them to taxi companies in the hope for returns every month-end, honesty from the company is prime.

"If you lease your car to me and I promise to pay you certain amount of money every month, then I must keep my word. And when I realise it is impossible, I should alert you early enough and not pull surprises on a client," he advises.

He also advises business people to have the right partner to avoid wrangles and misunderstandings.

"Learn to trust your employees and you have to accept that some of them can do a better job than you," he says.

He is also keen to learn from his competitors, as he reckons that without competition, you will never know where you stand as a company.

Teacher Taxis Kisumu Miwani Secondary School Jim Irandu competitors
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