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Economy

State plans pre-paid commuter fares

Matatu Owners Association chairman Simon Kimutai at a recent meeting on road safety and regulations in Nairobi. Photo/Salaton Njau
Matatu Owners Association chairman Simon Kimutai at a recent meeting on road safety and regulations in Nairobi. Photo/Salaton Njau 

Passengers could soon be required to pay fares upfront in measures aimed at reducing graft involving public service vehicles that has been blamed for increased road carnage.

Transport Principal Secretary Nduva Muli said that pre-paid cards would be introduced by mid-next year if draft regulations to be put before stakeholders from Tuesday are adopted.

“We plan by July next year to have cashless transactions in all public service vehicles (PSVs),” he said in an interview adding that the new technology would stem corruption between matatu operators and highway code enforcers.

Mr Muli said that the swiping would involve vehicles serving urban estates and those travelling long distances with the exception of bus companies where bookings and payments are made directly at specified outlets.

The State hopes cashless travel would help the PSV industry “self-regulate” as operators would be less motivated to engage in traffic offences in a dash for more cash.

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Public transport drivers routinely breach speed limits to increase the number of trips made or carry more commuters than the vehicle’s recommended capacity. This has seen the crews grease the palms of some traffic officers to cover up for the offences.

In a tap-to-pay regime, passengers swipe their commuter cards either on a special phone or a card reader with fare deducted from the card holder’s pre-paid account.

The funds then go straight to the vehicle owner’s account held by the service provider, mostly banks with deposits reflected in real time effectively solving the accountability puzzle among matatu operators.

Use of cards would also ensure fixed fares as opposed to matatu operators inflating fares depending on demand.

Matatu Owners Association (MOA) chairman Simon Kimutai said that pre-paid fare cards would help bring order on Kenyan roads.

“A cashless system will slice corruption on roads by between 60 and 70 per cent. That is for sure, if not more,” he said in a telephone interview.

“Matatu crews will no longer have extra cash to redeem themselves out of petty offences.”

He added that the move would allow vehicle owners keep track of cash flow.

Mr Kimutai, a director at the MOA Compliant fleet said that each bus belonging to the sacco pays five per cent of the gross amount collected per day to Equity Bank which has partnered with Google, the developer of the BebaPay card technology. MOA has a fleet of 90 buses.

Citi Hoppa and Star Bus that ply Nairobi routes are also giving commuters the option of electronic payment.

The Matatu Welfare Association (MWA) said the proposed system should be given at least a year before implementation.

“Adequate timeline is critical in the success of the project,” chairman Dickson Mbugua said adding that the seven months looked overly ambitious.

There are about 60,000 commuter service vehicles in Kenya.

The new payment could come with higher fares on some routes with the Kenya Bus Service Management (KBS) saying it was conducting a trial of smart cards use that would involve card readers.

The company outsourced the technology from a Hong Kong-based firm, Advanced Cards Systems Ltd.

KBS managing director Edwin Mkabana said the prepaid card-based system would go live early next year.

“It costs about Sh25,000 to fix a single smart card reader,” he said adding that the extra cost would be passed over to commuters.

Travellers would receive the cards for free and be required to top them up with at least Sh100.

Mr Mkabana said that the key challenge in pre-paid cards lay in systems failures because there would be no mechanism to refund fares.

In developed countries, cities develop one card that is used across all service providers. South Africa and Nigeria are also moving towards pre-paid fares.

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