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Ride-hailing is here to stay

By G.K Ndungu | February 7th 2020

Technology is now part of everyday life, and its incorporation in everyone’s lives is a matter of when and not if. This could not be truer than in the case of transportation. Ride-hailing is an idea whose time has come, and it cannot be wished away anymore. The time has come for the idea not only to be embraced but activated by ensuring there is creation of an ecosystem to create a great impact that will lead to commuters experiencing and enjoying maximum benefits.

Going back approximately eight years, ride-hailing was only a service in the western world and it was beyond the imagination of the everyday matatu or taxi users that they would one day be able to get a taxi within minutes through their phone. Soon afterwards, there was the advent of the very first taxi-hailing app locally. In the years since, the ride-hailing marvel has grown in leaps and bounds to become a mainstay in commuter transportation.

Progressively, we have witnessed the metamorphosis of ride-hailing moving beyond taxis to include boda bodas and commuter shuttles. The ease of use of these different apps means that nearly every Kenyan living in urban centres has downloaded at least one of these ride-hailing apps and uses them on a regular basis.

Like all other sectors, there are dynamics and challenges to growth. Ride-hailing is not different and it has had its share of issues. Some of these issues range from driver concerns to matters around the regulatory framework for the sector.

The biggest conceptual concern is the jurisdictional definition as to whether the regulation should be demarcated or domiciled within transportation or technology.

One such occurrence happened in October 2019 when the National Transport and Safety Authority (NTSA) issued a ban against shuttle-hailing apps SWVL and Little Cab. There had been little to no opposition from the public towards them, owing to the need they were fulfilling, which is a testament to their benefit.

There are different ways in which these platforms can be utilized for the benefit of commuters and the larger public instead of wishing the ride-hailing concept away. What is required is to investigate all the different aspects and issues to streamline the concerns for the greater good.

These apps provide reliability, convenience, efficiency to the user and hold potential for youth employment. They are also large companies with the resources to help drive the development of transportation and commuting if we align with them on a blueprint that fosters growth.

The large cities and towns in Kenya are plagued by traffic snarl ups that have prolonged peak commuting hours to nearly three hours long, owing to the excessive volume of vehicles on our roads.

This has seen the government look to implement policies like the Bus Rapid Transit (BRT) system, car free days and preventing public service vehicles (PSV) from accessing the Central Business District (CBD).

Of those policies, there is not yet one that has panned out and resolved the predicament. Ride-hailing has provided a solution for this by enabling the development of new commuting routes that do not involve accessing the CBD and instead can use less heavily utilised roads to bypass the traffic jams.

In terms of economic benefits, these apps provide sources of income for the youth. This is a demographic of our population that has more unemployed than employed people, regardless of their qualifications. The youth are now taking up opportunities with the different apps to help them make ends meet and are pocketing decent amounts of money on a regular basis.

We can also look at it from the point of view of the businesses themselves. Considering the income streams that these businesses have in place, would we not benefit from their contribution to the exchequer? This would be subject to fully developing the regulations that govern the industry, but it must be a part of the conversation with those operating the ride-hailing apps.

The critical operating framework is the perspective of transiting this discussion into the regulatory framework - the development of policy and legislative framework. The law rarely ever precedes innovation; it must be the other way around. Since the innovation must lead, we should now be holding discussions as to how best to craft policies and laws that map where we need these innovations to drive us.

This would create the desired ecosystem that helps us access all the benefits that would not only grow ride-hailing, but results in the desired economic and environmental effects on the country at large.

As such, we must fully accept that ride-hailing is an idea that we can use as an economic driver, and a guide when developing transport solutions for the future. It is time the desirable and obligatory regulatory framework for ride-hailing is put in place, guided by the maxim of ‘good policy is all very well, but it is meaningless without good execution’.

The tools of regulation chosen by government should focus on execution from the array of processes and tools available to government regulators to achieve regulatory outcomes.  Regulation should be conceptualized not just focusing on enforcement but about the prosaic, day-to-day factors that operate to influence behaviour and produce the anticipated regulatory outcomes.

These factors form what are referred to as ‘the webs of influence’ that operate at different times and in different contexts to produce ‘normal’ behaviour in the market. These conceived influences include market forces, social norms, ethics, codes of conduct and practice, guidelines, standards, business processes and technological constraints.

Regulation is as much about regularity as it is about deviance!

G. K. Ndungu

The writer, G.K Ndungu, is an economist, public policy analyst, and a governance expert. His areas of practice include capacity development, public financial management, institutional strengthening, public sector reforms, development of policy, legislative and regulatory frameworks.

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