Bus-hailing firms upstage botched State BRT project

BRT lanes along Thika super highway. The new BRT buses expected to improve Nairobi city's transport as well as reduce the vehicles congestion. [Elvis Ogina.Standard]

Bus-hailing company SWVL last week launched operations in the Kenyan market in a Sh1.5 billion investment that seeks to disrupt Nairobi’s chaotic public transport system.

The launch follows an eight-month pilot run of the service in Nairobi that saw the Egyptian-based company roll out 150 buses along 55 routes with hundreds of drop off and pick-up points.

SWVL co-founder and Chief Executive Mostafa Kandil said the company’s ultimate aim is to build a mass transit system that is more affordable than taxi-hailing services such as Uber and Bolt while offering a smoother commute than conventional matatus.

“We realised there is a demand among middle-class consumers for a more orderly and predictable mass transit system and Nairobi offers a huge opportunity for growth,” said Mostafa.

Nairobi marks the fourth city SWVL is venturing into after Cairo, Alexandria and Pakistan’s Lahore, with the firm looking to make the East African economic hub as the centre for its African operations.

“In Egypt, we have gone from 100 bookings per month to millions of bookings and this has been a testament to us that there is a lot of potential to scale,” explained Mostafa.

The firm engages drivers who already own and operate their buses to join the SWVL fleet on a lease agreement.

Drivers and SWVL agree on a minimum daily guarantee based on the average earnings expected per day from each bus.

If the day’s earnings fall below the minimum guarantee figure, SWVL tops up the difference and if it surpasses it, the company takes the difference.

“On average, we estimate the shuttles to make between Sh7,000 to Sh15,000 per day depending on the route,” explained Shivachi Muleji, SWVL General Manager for Kenya.

“We have a partnership with Stanbic Bank to provide funding for prospective drivers as well as technology company BRCK to provide free Wi-Fi on our buses,” explained Muleji. Passengers riding in SWVL buses are also insured and in the event of an accident, will have part of their medical bills reimbursed.

The firm’s Sh1.5 billion investment will go towards building a network of SWVL buses and drivers with the firm targeting to have 500 buses in the near term.

Passengers currently pay a flat fee of Sh200 per trip to ride on SWVL and this has prompted calls for the firm to introduce dynamic pricing.

At the same time, the app does not adjust to factor in traffic jams and this has led to long delays on several occasions.

SWVL says the company is working to introduce dynamic pricing by next year and will also have a more predictable schedule as more buses are introduced and the system is upgraded.

“The government’s role is to set up a mass transit system which includes laying the infrastructure, bringing in the buses and employing drivers which can be complex and costly,” explained Mostafa. “We are building on top of existing ecosystems and learning as we go.”

The launch of SWVL comes weeks after ride-hailing service Little launched a shuttle service on the Nairobi-Naivasha-Nakuru route. This follows the company’s launch of shuttle services for commuters in Nairobi earlier this year to stave off competition from SWVL.

The transport chaos experienced by commuters using public service vehicles in Nairobi has prompted several interventions over the years from both the public and private sectors.

Last year, the Ministry of Transport demarcated lanes along Thika Highway indicating they would be dedicated for the Bus Rapid Transit (BRT) system due to be introduced “soon”.

More than a year later, however, the plan seems to have been abandoned, with no word from the Transport Ministry on the fate of dozens of high-capacity buses imported by the Government at a Sh1.6 billion bill to the taxpayer.

The planned introduction of a BRT system is just one of the government’s uncoordinated and ill-planned attempts at establishing order in Nairobi’s chaotic public transport system. Last year, thousands of Nairobi commuters and motorists endured an hours’-long gridlock following a sudden directive by Nairobi Governor Mike Sonko to ban matatus from the Central Business District (CBD).

The ban caught the city residents unawares and was rescinded less than 24 hours later after a public outcry but not without a huge cost in lost man-hours, fuel and fatigue for Nairobi residents.

 “We are currently seeking a transport operating license from the NTSA and also engaging the various matatu Saccos along prospective routes and these discussions are going well,” explained Muleji.

Another intervention saw former Nairobi governor Evans Kidero, backed by the Transport Ministry in 2015, pour Sh400 million in a project to remove roundabouts in the city centre and convert major arteries in the CBD into one-way streets. 

The plan also included a moratorium on the licensing of new public service vehicles but after a few days of erecting yellow concrete drums around major roundabouts to convert them into one-way lanes, the governor was forced to remove the barriers after public outcry as traffic jams worsened.

Technology giant IBM in 2011 ranked Nairobi as having the fourth most painful traffic experience in the world coming after Beijing and Johannesburg and the city residents are said to lose millions each day in productivity due to traffic jams.

There are several projects underway by the government and foreign donor agencies and bilateral lenders including the European Union and the World Bank to overhaul the city’s public transit network.

The initiatives include developing a light rail and BRT system, with tens of billions of dollars pledged cumulatively.

However, delays in project implementation and lack of proper coordination by several government agencies concerned are slowing down the execution of the projects.  

[email protected]