When a pandemic spreads, suffering does likewise. Strife does the same as a crisis metastasizes. But where there are many problems, there are often opportunities around the corner.
There is an ongoing effort in East Africa to make the preceding statement look more like motivational speakers’ stuff. A crisis in this African sub-region may, or may not, cause some significant changes in a very important market.
The public transport system in Uganda , Rwanda, and Kenya has been in the news over the last few weeks for essentially the same reason.
In the very informal public transport sector, there is an ongoing COVID-influenced effort to formalize and digitize services and payments, which is believed to generate hundreds of billions of shillings in annual revenue — for which a large chunk goes unrecounted.
Concerns over physical cash being a vector for the virus in at least three East African nations and the need for more effective touch tracing activities have prompted governments to reconsider the public transport network.
Early last month, the Kampala Capital City Authority (KCCA) Ministry of Uganda proposed new boda-boda (commercial motorcycles) rules and taxi operations in the nation’s capital city. Such new regulations are to become part of the economic plans of the country after the lifting of its COVID-19-enforced lockdown.
According to the Daily Monitor, the Lord Mayor of Kampala, Erias Lukwago, citing the Ministry ‘s guidelines, confirmed that all boda-bodas must operate under digital companies using applications such as SafeBoda, Uber, and Bolt.
In Rwanda, the pronouncements that eased the lockdown early in May came with a warning that motorcycle operators in the country would no longer be doing business as usual.
ITANGAZO rirebana n'isubukurwa rya serivisi zo gutwara abagenzi kuri Moto.
_________ANNOUNCEMENT regarding the resumption of moto taxi transport services.#RwOT pic.twitter.com/5kUFqqGGm9
— Rwanda Utilities Regulatory Authority – RURA (@RURA_RWANDA) May 27, 2020
According to an announcement made on Wednesday May 27 by the Rwanda Utilities Regulatory Authority (RURA), commercial motorcycle operators in the country are now only required to accept cashless payments from passengers.
“All motorcyclists in Kigali are required to use meters and cashless payments such as MTN MoMo or Airtel Money,” the directive said. Drivers and passengers should carry hand-sanitizers but they must wear face masks.
There are up to 37,000 motorcycle taxi drivers in Rwanda and 60 per cent of those drivers work in the country’s capital, Kigali. The new cashless regulation entered into force on June 1, but at a later date the requirement for meters will be expanded to other provinces other than Kigali.
Recently, Kenya was in the news when the National Transport and Safety Authority (NTSA) announced plans to implement a cashless payment system in public transport. The authority also called for tech companies’ bids to install mobile matatus software nationwide.
Once approved, the digital fare collection system would allow passengers to use their phones to pay the fare, which will not only assist in checking spread but will also assist in contact tracing initiatives. Quite a laudable and plausible move, given that mobile payments are so common in Kenya that almost half of the country’s GDP in 2018 was moved through mobile money.
It’s a beautiful design on paper-all of it. In addition to the COVID-19 side of the matter, making cashless payments compulsory in the public transport sector would weed out inefficiency, corruption and the culture of bribery, hooliganism and notoriety for which the sector is known.
The Issue? History isn’t friends with this plan; it’s a previously failed experiment and there’s no way to tell it won’t stumble and fall again.
In 2013, Kenya tried its hands to digitalize its public buses, or “matatus.” The cashless matatu initiative was a government policy push to clean up the industry through the Ministry of Transport.
The proposed rules were put out in a legal notice released in September 2013 entitled the National Transport and Safety Authority (Operation of Public Service Vehicles), with a deadline set for June 2014.
Under the new regulations, cash payments in the matatu industry in the country were effectively to become a thing of the past which is believed to generate up to KES 205 Bn in annual revenue.
Safaricom, Mastercard, Family Bank, KCB Bank, Equity Bank, and Google were all in line to facilitate the cashless matatu scheme and rake in annual fees up to KES 2 Bn.
Nevertheless, the cashless scheme never really took off before it died out just a year and a half after it was rolled out.
What put it to death? And, who did kill it? Well, it depends on who you ask but the most common explanation is that the system failed because of a lack of support from matatu operators, touts, and the people who generally do the grunt work — all of whom were alienated by the policy.
StandardMedia in Kenya also announced that the cashless program denied extra cash to matatu operators that would otherwise not be remitted to the matatu owners. Consequently the policy has been sabotaged.
Similarly, in April 2019, Rwanda tried to go down the same path when its Transportation Ministry announced a deadline of July 1 for moto-taxi operators to go digital by installing meters or to be ejected.
The authorities at the time related the decision to the need to boost transport access, track reckless driving and end price haggling.
That deadline has since passed without recording much progress. The deadline for May was reset in February this year but the coronavirus outbreak compelled the country to shelve those plans. Whether the new Directive would do any better remains to be seen.