MarketPlace

Small towns rev up growth of local taxi-hailing brands

tuk-tuk-tuk

Three-wheeler tuk-tuks, a popular means of transport on the Coast, wait for passengers outside the Mombasa Law Courts on March 31, 2021. PHOTO | KEVIN ODIT | NMG

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Summary

  • Craft Silicon recently announced it is going for Mombasa with its Little Cab platform targeting motorised rickshaws, Tuk Tuks for the expansion.
  • Chief executive Kamal Budhabatti has been trying to expand his transport and logistic business, which offers Little Basic for smaller-sized cars, Little Boda, and Little Parcel — available to both retail and corporate clients in East Africa.

As customers and drivers clog their phones with multiple taxi-hailing applications in Nairobi, smaller towns are offering room for the rise of more homegrown solutions to take on the global tech giants.

Craft Silicon recently announced it is going for Mombasa with its Little Cab platform targeting motorised rickshaws, Tuk Tuks for the expansion.

Chief executive Kamal Budhabatti has been trying to expand his transport and logistic business, which offers Little Basic for smaller-sized cars, Little Boda, and Little Parcel — available to both retail and corporate clients in East Africa.

The firm has also expanded into Addis-Ababa, Ethiopia targeting one of Africa’s populous cities.

“We currently have Basic, Ladybug, Comfort, and Comfort Plus. Our new addition, Tuk Tuk, will be in the economy category,” said Mr Kamal.

Nairobi has been the most attractive market for taxi-hailing operators, especially international players like San Francisco-based Uber Technologies and Estonian taxi-hailing platform Taxify that rebranded itself as Bolt looking for sufficient traffic to justify the deployment of the business.

The big players fight for the future of urban transport is slowly shifting to providing on-demand services including food and grocery delivery beyond ride-hailing.

They have spurred a race for food delivery businesses including Bolt Food, Jumia Food, Uber Eats and Glovo.

But smaller towns are offering room for growth, especially for local businesses that are not afraid to take the risk, especially on growing smartphone penetration.

Safaricom recently said they have 16.7 million smartphones linked to their network with 8.5 million connected to high-speed Internet partly through their Lipa Mdogo Mdogo campaign that targets rural areas.

But the expansion to rural areas comes with challenges of lower volume of available cars and stiff competition from local players.

Little Cab entry into Mombasa is targeting Tuk Tuks for this very reason being a very popular means of movement in the coastal city.

Tuk Tuks are also very popular in Kisumu and Nakuru due to their affordability, reliability and flexibility in accessing interior parts of the towns.

Bolt Kenya also says it is set to launch an e-scooter rental business in other markets and expand to smaller towns and peri-urban centres on the back of billions of shillings raised from a US private equity firm.

Competition from locally operated taxi solutions has also been unrelenting.

The business has low barriers of entry and can easily be downloaded on Google App stores, taking advantage of the wide Internet network coverage.

Some of the prominent local players that have joined the ride-hailing business include Dango Cabs, Wasili Cabs, Safiri Cabs, Bomba Cabs, Flexxy Cabs, An-Nisa Taxi and Mtaani Cabs.

Vitalis Owiny, Kennedy Ochieng and Julius Miyumo launched Dango Cab in the lake-side city of Kisumu.

Aside from Kisumu, they also target other towns such as Kakamega and Kisii, towns under-served by cab-hailing services.

Businessman Mark Njagi and computer science graduate Tim Kamanga from Nakuru Shabab Estate started Wasili Cabs, which has become very popular in the western region.

“After seeing the success of cab-hailing services in towns such as Nakuru, Nairobi, Mombasa and Eldoret, we were motivated to take the service to the western part of the country as there were no major players,” said Mr Owiny.

They have furled vehicle ownership, especially with relatively lower consumption of fuel to enable drivers to get more earnings.

This has also led to an array of transport options beyond cars to include boda bodas and Tuk Tuks, incorporating parcel deliveries and logistics.

“Dango is an innovative, modernised ride-share application that enables you to schedule travel with a transport option of your choice — car, tuk-tuk or boda-boda taxi,” said Mr Owiny.

The spread of taxi-hailing apps is indicative the industry is here to stay despite resistance from the local taxis and unregulated marketplace, which mean everybody comes up with their own set of rules.

Its expansion outside the major city will disrupt transportation to the most remote village in Kenya as the digital revolution expands.

It is no wonder when the Kenya National Bureau of Statistics rebased the Kenya economy it found the transport sector was higher by 2.8 points to make up 10.8 percent of the gross domestic product.