Traders and commuters win big as buses, trucks go digital

What technology has radically transformed transport in Kenya is no longer news. Taxi-hailing apps such as Uber and Bolt, formerly Taxify, are now part of the daily lives of people living in cities such as Nairobi. Also, a rising number of major town has homegrown tax-hailing services.

Such technological advances that were unimaginable few years back continue to revolutionise logistics, steamrolling over traditional methods of operations.

Mobile-supported applications have now shifted to truck and bus hailing services.

Apart from the innovators, the main beneficiaries of this transformation are consumers who are not only enjoying sharp reduction in transport and commuter costs, but a high level of convenience. All they need to do is just press a button on their smartphones at the comfort of their living room and their travel or logistics needs are fulfilled.

The bus hailing apps have increased competition in the respective sectors, cutting fares and haulage fees by almost 50 percent. This disruptive trend in transport is expected to gather steam as more players jostle for a share of the innovation pie.

Eqypt-based transportation start-up SWVL, in February last year launched in the Kenyan market allowing Nairobi riders to commute on fixed fares, as well as on fixed routes and timings through booking on mobile phones.

With a fixed price of Sh200 per ride, customers enjoy lower fares, sometimes paying around Sh50 or even getting free promotional rides, incurring lower costs than those charged by public service vehicles, popularly referred to as matatus, and whose fares commonly shoot up when it rains, during peak hours and when traffic is heavy.

Some of the routes on SWVL include Westlands to Ongata Rongai, Ruiru-Westlands, Ruiru-Upperhill, Westlands-Upperhill, Westlands-Kikuyu and others going to Junction Mall, Kileleshwa and Ngong Road.

“The service has re-invented the country’s public transportation in Kenya to serve as the premium alternative,” says SWVL co-founder and chief executive officer, Mostafa Kandil in statement.

“It has fixed bus stops, fixed timings and fixed prices. We will in future roll out a dynamic pricing model so customers are charged depending on distance.”

The firm increased from four routes to 55 routes within the six months of business.

The company also operating in Cairo and Alexandria, Egypt and Lahore in Pakistan, injected $15 million (Sh1.5 billion) in September with plans to scale operations to other towns and routes.

The disruption of Nairobi’s cargo transport system came after the introduction of Lori, an e-logistics platform that connects cargo owners to transportation. It also offers fuel financing and insurance in case of delays and ensures full utilisation of trucking systems.

“Our carriage partners provide transport and give companies peace of mind through visibility and a commitment to on-time delivery, therefore revolutionising the cargo and transport value chain,” said Lori chief executive and co-founder Josh Sandler.

Mr Sandler said challenges that are faced in the industry include the cost of hiring trucks, high transportation costs and subsequent delays, partly incurred as trucks go through the process of border clearance.

“We increase the utilisation of trucking assets, all with the objective of lowering the costs of goods in Africa,” he added.

Currently, it costs between Sh80,000 and Sh100,000 to transport a 20-foot container using trucks between Mombasa and Nairobi, while it costs at least Sh50,000 to transport the same container on the Standard Gauge Railway.

Mr Sandler was inspired to form the company after working with the Kenyan government in a study on how the high cost of goods, derived from high cost of transportation in the supply chain in Africa, impacts trade.

“Technology can aid to bring down the cost of goods over time. This can happen however by eliminating pain points and achieving cost savings for cargo owners and transporters alike,” he said.

According to global property consultancy Knight Frank, the cost of transport takes up between 50 percent and 5 percent of the retail price of goods. This has made it hard for African products to compete globally.

The mobile technology currently has 6,000 trucks on its platform, and has enabled operations in Westlands, Inland Container Deport in Embakasi and Mombasa, Uganda, Tanzania, South Sudan, Ethiopia, Rwanda, and now extends to West Africa in Nigeria.