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Ride-hailing apps rev up investment in taxi cabs

By Dominic Omondi | May 2nd 2020
A cab contracted to the Safiri online ride-hailing firm in Nakuru town. [Kipsang Joseph, Standard]

Investment in online taxi services is on the increase, with official data showing a surge in the number of public service vehicle (PSV) licences issued last year.

PSV licences issued between January and December 2019 rose by 10.3 per cent to 63,938 from 57,949 the previous year, according to the Economic Survey 2020 released by the Kenya National Bureau of Statistics (KNBS).

“This was mainly due to increased licences issued to PSV taxis using mobile apps and registered PSV Saccos and companies in 2019,” said KNBS.

At the same time, 14-seater matatu licences rose by nearly a third in 2019 even as more people flocked to the ride-hailing taxi business.

About 47,183 matatus of 14 seats and below were registered last year compared to 36,815 in 2018.

The taxi-hailing business is booming in Kenya, with apps such as Uber, Bolt and Little Cab among the most popular in connecting drivers and riders in major towns.

The taxis have made movement around Nairobi, Mombasa, Kisumu and other major urban areas easier, luring people with their comparatively cheaper fares than traditional taxis.

However, after a high period in which they outdid their traditional taxis rivals by operating without being fettered by regulation, there are plans to rein in the ride-hailing vehicles.

Taxi-hailing service providers might pay up to Sh500,000 should new proposals by the National Transport and Safety Authority come into force.

Decreased licensing

The Economic Survey 2020 showed that the number of licences issued to other PSVs had somewhat plateaued, as those issued to matatus declined by 26 per cent to 16,755 from 21,134.

“Licences issued to buses decreased by 32.4 per cent to 8,969 over the same period. PSV licences issued to mini-buses also decreased from 7,861 in 2018 to 7,786 in 2019,” said KNBS.

Individual driving licences issued dropped by 14.6 per cent from 164,349 in 2018 to 140,279.

“This may be partly attributed to a lag in replacement of old driving licences in compliance with the requirements for smart driving licences,” said the statistics agency.

“During the review period, NTSA introduced the smart driving licences to replace the old type referred to as red books.”

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