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There is probably no other business in Kenya with a shorter lifespan than that of public transport popularly known as the matatu industry.
Majority of Kenyans cannot keep up with the death of bus companies from the pioneers such as OTC, which many associate with the sprawling bus stage for upcountry buses in downtown Nairobi.
It was indeed the name given to East African Road Services, a bus service that traced its founding to the late independence activist and cabinet minister Tom Mboya.
The death of OTC set off a string of other closures by bus services, including Scandinavia Express Services Ltd, one of the first regional bus services that went into receivership in 2010 amid a multitude of debts.
Two years later, Kenya Commercial Bank auctioned the assets of the Akamba Public Road Services to recover a Sh168 million loan, marking a dramatic end to the firm’s 60-year operations.
A year later, Kampala Coach buses were auctioned to recover nearly Sh100 million owed to the Uganda Revenue Authority.
This sad state of affairs has brought to the scene a new Information Technology company, seeking to turn around fortunes of the long-suffering operators.
Voltic Kenya reckons it has the remedy to the disease that has been killing long distance buses operators in the region through technology.
Chief Executive and co-founder Fowzi Ahmed does not believe that the matatu business is unprofitable. Rather, he reckons the industry’s problems stem from poor management of cash flow.
With this in mind the firm came up with an enterprise resource planning (ERP) known as Bus Operators’ Service System (Boss) which they hope will seal all the revenue leakages and theft that have bled bus services for decades.
The system manages all operations from end-to-end – from ticketing to buying of spare parts.
Moreover, rather than try to entice workers with an inconsequential employee stock ownership plan (ESOP) as Akamba did to buy its workers’ trust, Fowzi says the system enables owners to track everything the employee does whether in the office or on the road. It also gives them the statistics for every employee.
See everything
The owner can also measure the profitability of a vehicle per route or per manager, enabling them to know whether it is the route, manager or vehicle that is the problem.
Mr Fowzi says it took five years to research and design the system. The company has now been in business for one and a half years and has recruited over 20 bus operators with over 3,000 vehicles. But this, he says, is only one per cent of Sh400 billion industry.
He says the system will go a long way in managing expenses for bus operators, noting that between 70 and 80 per cent of revenue in the business goes to expenses.
These include allowances, spare parts, fuel, rent and petty cash expenses.
“Operators go home with a small margin. This small margin has to be managed well,” says Mr Fowzi.
The owner is able to see everything that transpires real time either on a mobile app or their phone, a situation that puts them fully in charge.
“Even when an accident happens, you will know,” he says, adding that the owners of bus companies now have real data to share with the insurance company and deal with the so-called ambulance chasers.
“I think even premiums are going to go down,” says Mr Fowzi, noting that most of their clients have noted a 30 per cent increase in revenue.
Initially, there were fears by some employees that the app would end their jobs.
“This was particularly the case with those taking advantage of owners,” he says.
However, slowly but surely, they have started embracing the system.
The company believes it will be a different ball game when it synchronises Boss with another app they recently unveiled known as iAbiri.
With iAbiri, travellers will have the option of booking tickets online just like their counterparts travelling by air, thus integrating the entire value chain of bus services.
If you buy a ticket for someone, you can also track the bus to its final destination.
But just as other technology companies in the sharing economy, the firm is likely to have to address the identity crisis that bedevils the space.
“We are not a ticketing solution, we are a technology company,” says Mr Fowzi.
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