Matatu investment..

Matatu is a name associated with Kenya public transport sector referring mostly to the low capacity public service vehicles. Over the years, this sector has remained chaotic and mismanaged and many investors have kept a distance. But since public transport is more of a basic requirement, and people need to move from one point to another, the demand for public means of transport has continuously increased and provision of the same has remained one of the most rewarding investments in terms of returns to those already in the business.
The Government is in the process facing-out lower capacity public service vehicles {14 seater Vans} in all urban centers especially in the capital Nairobi- it has been a continuing program for the last Eight years- investors are now going for minibuses with a capacity of 25- 29-33 and 47 seaters respectively.
Different vehicle Manufactures have come up with several models to fill the gap, ISUZU — MITSUBISH -TOYOTA DYNA — HINO — TATA — HYUDAI – Nissan UD {Swara} — FOTON etc.
ISUZU NQR remains the biggest contender in the minibus category especially the 25—29 and 33 seater capacity. General Motors the manufactures of Isuzu has been selling buses across the country for many years and their different modes have worked for Kenyan roads. The availability of genuine and affordable spare parts is also an added advantage to buyers.
Hino is making a grand comeback in the passengers transport services. The 33 seater Hino minibus is giving Isuzu quite a worthy challenge especially in the Manyanga {soaped up} category. With the fancy bodies, it is hard to tell the difference between an Isuzu and a Hino. Although there is still room for improvement, this model has most of the important features that are ideal for Matatu business.
To own either of the two popular minibuses, you need an estimated capital of 5 million Kenya shillings. You can pay cash or get finance through lenders either a bank or savings and credit cooperative societies.
For cash buyers- the requirements are as follows.
 Chassis/ cabin. =sh 3,502,000
 Manyanga body. = ksh.1.2 {depending in features}
 Registration number plate= ksh15, 000.
 Advance tax @ksh, 720 per seat= ksh 23,760.
 Comprehensive insurance cover = ksh 450,000.
 Music system advanced = ksh. 150,000.
 Sacco registration & tlb license.= ksh. 20,000.00
TOTA L. =Ksh. 5,360,760.

The fare from Rongai to Nairobi is 100 peaks and 50 off peaks- on average the minibus makes six return trips to and from Nairobi. The average income per trip is between 3300— 4000 shillings; for six return trips the crew will collect sh 19,800,00
 Fuel is equivalent to 1000 per return trip—in a day a total of Ksh 6,000 will go to fuel.
 Salaries for the driver and conductor rage between 3,000—- 4000 shillings depending on terms of employment.
 Other expenses are; parking
 car wash
 Sacco contribution-= 500— 1000. Depending on the sacco.
 On average a 33 seater manyanga makes a net income of between 9,000—10,000 per day i.e. after all expenses have been deducted from the gross income including fueling & salaries.
 Most drivers work six days a week and rest on Sunday on average the minibus works for 27 days in a month and makes 270,000.
Monthly expenses include INSURANCE, PARKING FEE and SERVICING.

A brand new minibus is more productive in the first three years- during that period it can maintain the target of 9000 Kenya shillings per day; but the income drops in the fourth year by slight margin- of between Ksh.7,000- 8,000. Despite the drop on returns this bus can and will give you service for a minimum 7 years.
A Matatu owner has the right to employ a trustee/ manager of his choice to run the daily affairs of the van; it is however recommended that investors seek the services of qualified managers/ management agencies. This helps in setting a target which is sustainable and eases the burden for the owner.
1. The agency maintains control and costs incurred by each of the managed vehicle and must record / report to the owner of any malfunction or mechanical problem noticed on any vehicle.
2. It is the duty of the fleet manager to see to it that a file is kept containing all documents related to each vehicle such as Accidents reports, insurance, repair charts, and road licenses.
For those who want to go it alone, there is of-cause the protection fee. This last bit is necessitated by corruption in the traffic department. It would be unwise not to have a contact person at the police station especially those that man your route of operation. It is hard to survive in this business however you may hate corruption; even when your Matatu has complied with all government requirements. The traffic police department is the regulator and most of them see the industry as their cash cow; there are police officers who will look for reasons or even obscure offense and place it on your crew and this will cost you dearly. It is therefore important to bear in mind that they also have a share of your cake and this might have a very significant role in the success or failure of your investment.
For more information..
To book an appointment call: Irene– +254 721 400 403

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Posted by on November 28, 2015 in Its life, Matatu matters


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Bring Back “NYAYO BUSES’

The Matatu industry has for many years been associated with road accidents, recklessness-corruption and lawlessness. It is an industry that is most citied for lack of management and no procedures. These include no schedules, poor working conditions for workers, fluctuating fares, undesignated stops, cartels, and harassment.
Despite all this, Matatu industry is a major Economy booster; creating direct and indirect employment to thousands of diverse vehicle owners, Matatu Saccos, management companies, drivers, touts, route managers, mechanic; and a source of livelihood and investment opportunity for hundreds of Kenyans working in insurance companies, Tracking Companies and spare parts dealers among others.
Today we have a more improved road network. The demand for transport has increased tremendously with mass movement to urban areas. But the current state of transport system in Kenya is still wanting;
• What is lacking ?
What we are yet to see is the GoK coming in as investors; owning and operating public service transport. It is very possible. The idea was tested During the Nyayo Era- Earlier in late 80’s {1988 to be precise.} President Moi in an effort to create cheaper alternative for the commuting population started a state owned bus service (Nyayo Bus Service Corporation). Under the umbrella of the National Youth Service {currently led by CS for Devolution} the Government of the day imported buses from Italy and Belgium and in under a year they were controlling a fleet of over 300 buses Serving in most of the city routes. This venture went down; not because it wasn’t resourceful, but because of mismanagement and corruption.
What the National government can do to tame the market is bring in state owned buses”. They will Charge lower fares than the competitors and still make lots of profit, because (1) they {NYS} have subsidies in fuel and (2) they can easily import spare parts for the buses in an environment of foreign exchange restrictions. (3) they have availability of manpower; drivers and conductors will be sourced from the institution at no extra expense. And (3) All the buses will operate on NYS logo and this will mean more disciplined/ trained PSV operators. Since it will be run by a government institution we are likely to see an end to corruption on the road.
An estimated 70% or more of the Kenyan work force live in the outskirts of the capital and use public service vehicles to go to work and vice versa. These include colleges and universities students {since most of these learning institutions are located in the cities or have branches in the capital.} Also majority of small scale traders buy their merchandise in the capital and sell in rural areas. Farmers too rely on public transport to get their produce to the market. The only available alternative means of public transport is Motor cycles, salon cars /taxi, and bicycles which takes care of only a small percent leaving most of the passengers to the matatus.

The current transport market is still dominated by 14 seater vans. Although there has not been any new 14 seater licensed for town service in the last 8 years since the Government restricted licensing; Many of those that were licensed in that year going back are still in operation. The average Matatu is 8—9yrs old. {This is not the year of manufacture since most of these vehicles are second hand imported from Dubai and Japan.}
Most of the 33 seater minibuses are newer; but they are mostly on town service routes. We have some routes that have brand new vehicles registered as early as this year. In most urban town centers we have new and locally assembled Matatu joining the industry; there are those that are fitted with spacious seats, powerful music systems, CCTVand wi-fi ; they are locally referred to as “manyanga”.
Passengers pay more for these new buses even when the cheaper ones are available. Newer buses are modern, which means they are more advanced in-terms of comfort, speed and safety.

Recent changes in government institutions that engage with operators in the Matatu sector has brought about renewed hope of finding a lasting solution to the public transport problem that is common in most urban towns in Kenya. By bringing together various government institutions under the National Transport and Safety Authority {NTSA}, the Government intended to make it easier to monitor and regulate public transport in the country.
The fragmentation that existed before, did not allow room for accountability. Thus, creating points of collusion where individuals who are employed by the regulatory agencies {especially police officers} joined the industry and own vehicles, which operate at an advantage. This is what causes tension among operators and increases the level of noncompliance to rules and regulations paving the way for lawlessness and corruption.


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Posted by on October 20, 2015 in Its life, Matatu matters


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What can we do to fix traffic congestion in Nairobi? Matatu driver’s perspective…

The Kenya National Chamber of Commerce & Industry {KNCCI}, Nairobi County in partnership with EventUs Africa Ltd have organized the CITY TRANSPORT CONFERENCE & EXPO. {CITRA} ; scheduled for 24th to 26th September 2015 at Kasarani Sports Stadia indoor Arena, off Thika road.

An initiative that is set to reduce traffic congestion in Nairobi and its environs. I feel honored to be among the invited stakeholders for this forum. I wish to take this opportunity to extend my invitation to all those who read my blog. Come attend the inaugural City Transport conference and expo; let us reason together and seek the way forward to decongesting the city.
From my perspective as a Matatu driver and investor; there are solutions but they will require a lot of cooperation by concerned institutions. The objective should be to reduce traffic and not accommodate traffic. A reduction of traffic brings with it added positives – cleaner air, less noise, less stress-related disorders.
Promoting public transport is a necessary tool for achieving a reduction in traffic. The Government must spend its money incentivizing travel by public transport, increasing inter-connectivity of the various modes of public transport, increasing the number of trips, making them safe and “attractive” to every strata of society
When it is not safe for people to walk even over short distances, they result to using public transport. Many trips over these distances are undertaken by vehicles not as a choice but by force of circumstance. The largely avoidable use of vehicles for short-distance trips, which account for a significant proportion of all urban trips increases congestion, energy consumption and emissions, and renders walking, cycling, and public transit even more unviable. In short, planning for vehicles to the exclusion of other modes leads to even more motor vehicle activity and impacts.
We need to find a way of improving public transport services. We can do this if we make it sustainable and dependable.
If we build infrastructures that accommodate public service vehicles needs like bus stops, special lines for public service vehicles and easy access to bus stations, I believe we can make public transport a preferred and cheaper mode of mass transport.
The county governments of Nairobi can save taxpayers millions of shillings wasted in fuel, parking fee and medical care if they can use some of the large unutilized spaces within the CBD. Come up with A new plan, relocate some institutions and buildings to pave way for modern bus stations and build extra lanes for buses and Matatu in general.

 For instance, Kenya Railways occupies a large portion of unutilized/idle land: from Muthurwa all the way to Nairobi railways club on Ngong Road. The land extends to Uhuru highway near Nyayo stadium round about. On the Jogoo road side, we have Muthurwa bus park- but the access roads are poorly designed and never maintained.
 With proper planning, this land can provide link roads for PSVs to get to the city and to bus stations; we can absorb all matatus coming from Industry-area, Mombasa road- Langata Road- Ngong Road- Enterprise Road and Jogoo Road in to the train station; without interfering with the CBD.
.= The Ministry of transport must ensure that infrastructure and facilities for pedestrians (and cyclists) are incorporated as an essential component of all urban transport projects. Doing so would minimize the need for, and curb rapid growth in, motor vehicle activity, enhance the effectiveness of public transit and help achieve an urban transport system that is safe, cost-effective and that benefits all, including vehicle users.
= What is required for the core city is a comprehensive mobility plan which should be a combination of roads, public transport system, parking space, and pedestrians walk paths and introduction of alternative transport systems.
= Also, we need to come up with new training programs for drivers to educate them on driving skills and traffic regulations. Failure to observe traffic laws – over lapping- blocking exits/ entrances contribute to the congestion.
With the introduction of speed limiters/governors, we have seen fewer accidents and less fatal injuries in PSV sector; but the numbers have increased for non motorized road users. Groups such as young children, the elderly, the disabled, and the urban poor, who often have no choice but to walk or cycle, are particularly disadvantaged and at serious risk of being hurt or killed in accidents. Lack of pedestrian accessibility affects all, since everyone, including vehicle users, is a pedestrian at some point.

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Posted by on July 16, 2015 in Matatu matters


To own your dream car,,It’s all about knowing the right people..

IMG_20150616_135029[1]  IMG_20150616_135050[1]

First you need to buy a van.  it might not be the one you dream of owning- but if at all you really want to own one, you must first get one.

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Get a good mechanic. take it apart…. remove all the worn-out parts…

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The engine is the most important part of any car. give it a new life..over whole if necessary…

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visit the panel beater,,- watch as the van is dismantled..

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reinforce the support frame work.

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it’s now time to put it back together..

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Replace the control unit.. stability is key

IMG_20150620_125216[1]   IMG_20150624_141341[1]

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Comfort and style….


Add flavor….


Now you have your dream car….

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Posted by on June 30, 2015 in Matatu matters



Mrs. Brown is a Kenyan living and working in United Kingdom; she has plans to return home and settle here in the country sometimes in the near future. Despite owning a home here in the country, She feels the income she is getting from her rental houses in Nakuru is not enough to sustain her once she decides to come home. That’s where the idea of investing in the transport industry came to her mind.
She called our office around February and requested that i assist her in getting into the matatu business. she had made up her mind that she would try the transport sector. A week after she landed in the country, we began the search by visiting car bazaars to shopping for the right van. We sized quite a few, some good ones here and there, the price sounded right but they needed lots of paper work before the vans could be registered. There was not much time to go through all the process required for a matatu to get licensed by NTSA.

We opted to go for one already on the road. one advantage of buying a van already in the route is because It was easier to tell the condition of the vehicle and also what to expect based on what the owner is taking home. Another advantage  was the fact that the vehicle is already registered and certified by the National Transport Licensing Board it would only be a matter of transfer and renewal.

We were racing against time since she was to be in the country for under a month by which time we had to get the vehicle, comply with the entire legal requirements including transfer of ownership, Sacco registration, inspection and refurbishing the van. On the third day of our search- we found one van that fitted our budget and also had the features we were looking for- the negations started and a date was set for the change of hands. We had our mechanic at hand all during the search; he assured us that the van was maintainable

When the day finally came, payment was made, we bought the van during it normal daily routine. Our first stop was at the garage. Being a second hand van- we had set aside a certain amount out of the initial capital, to renew the vehicle. What we were looking for was the right image. The van was due for inspection in three months. Despite having a nice appearance we were not very sure about the mechanical state. 200k had been prepared for this task.
On the advice of our trusted mechanic, we bought a complete suspension system- steering, ball joints- shocks absorbers- brake system from the master cylinder to brake pads- idle arms, hand brake cable and finally brand new tires. Satisfied with the front parts, we turn to the rear suspension- the shocks were okay- we serviced the deferential, changed the transmission fluids- replaced the brakes lining and hydraulic cylinders and adjusters- leaf springs bushes, and again another set of brand new tires. It was now time for computerized inspection; this is where the vehicle is placed on various computerized machine that checks vehicle’s stability and wheels alignments-etc. most of the parts were new by now and that bridge we crossed.
We turned to the electrician- replaced broken lenses- bought new clips and connectors- rewired the dashboard to revive all signals and indicators. The next step was to check the safety requirements; we replaced broken seatbelts- bought a new first aid box and fire extinguisher – and reinforced the seats. We turned to the doors; serviced the locks, replaced worn out rubbers, bushes and winding machines. There was a small leakage at the rear end which allowed water to drip inside during heavy down pours; we decided to replace the entire boot door.
By now the van had acquired a new look and stability. It was time to check the engine; we had settled for this particular vehicle because our trusted mechanic had assured us that the engine was in sound working condition, nevertheless, we decided to give it new life. We changed engine oil, replaced air, oil and diesel filters, cleaned the radiator, added coolants and finally serviced the gear box system and added the required level of the transmission fluid. Now the van was ready to start providing transport services to the great people of republic of Kenya.
Only two things remained and these are the most import for our venture to be successful. The choice of the matatu Sacco and the crew; The Sacco provides the assistance acquired for a license from the Transport Licensing Board which allows one to operate in the route of choice. We had settled for route 125 Rongai- to – Nairobi. This route has five different Sacco societies. We visit three Sacco weighing out the advantages and what they had to offer in line with our business plan. We settled for the one with the widest coverage and better accountability. We paid the registration fee, bought cashless machines, paid taxes as required by the Traffic act, paid for change of TLB license and we were issued with the franchise to operate.
her flight back to work in UK was in a weeks time. for Seven days she watched her matatu competing for passengers in the busy Nairobi streets.

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Posted by on June 24, 2015 in Its life, Matatu matters


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Using ICT to address employment and safety in the matatu sector.

The use of new information and communications technology{ICT} has been applied in many ways in various fields to collect data, improve lifestyles and most important to avert disasters. Data collection for whatever reason is the first step to winning any warfare. We have seen modern ICT being used by our military as they battle terrorists in Somalia. The use of remote controlled drones for surveillance and even to launch missile attacks in high risk targets has become an effective tool of war with very positive result.
The same is happening in the public transport sector thanks to A group of Researchers from Nairobi university in collaborations with their counterparts in university of California at Berkeley in the US. The team has come up with a new technology that will probably provide a better approach that could be used to leverage the positive aspects of both the investors input; and workers performance; by providing reliable data that can be the key to improved safety, accessibility and efficiency.
David is a researcher from university of California at Berkeley USA and he has been in the country on several occasions for his research. I was introduced to David sometimes last year by one Professor from UON for a interview request. He wanted me to help him Access some of the stakeholders in the matatu sector for his research. When we started, David was more interested in monitoring and measuring corruption in the matatu industry. but after several meetings with drivers- conductors and managers- he soon realized, however, that the matatu industry is much more than a simple transfer of commuters.
This highly unappreciated industry is a fascinating expression of African entrepreneurship that has evolved into a multimillion investment; creating employment for more than a hundred thousand Kenyans and the only optional source of mobility {other than walking} for millions of people who rely on public transport every day. I teamed up with David and with a lot of support from university of California at Berkeley in America and our friends from university of Nairobi, we set out to clearly understand this vicious cycle that shapes the nature of public service operations in Kenya especially Nairobi.
According to our findings after numerous interviews with the stakeholders; majority of drivers complained of working long hours, and incentivized with high-revenue targets that they have to meet every single day. Lack of formal employment was also another obstacle for many workers {meaning no job security, no pay-slip, no insurance, no access to finance,} and therefore no stable career path to the middle class. They said they are rarely appreciated for their services despite doing their best.
Matatu owners on the other hand complained of driver’s recklessness and rude-mannered behaviors. Listening to majority of these owners, one would be persuaded to ask “why they even hire their vehicles to these drivers in the first place” if they don’t trust them at all. I know for a fact that this is just a myth and one that matatu owners have chosen to hold on to;since it is beneficial to them. by  avoiding taking full responsibility for their employees, they get away with paying taxable salaries and they can hire and fire them at will. Clearly, not all drivers are saints, and again not all drivers are reckless, what was lacking was prove..
David was more convinced that, the dispute; the hostility and suspicion could be addressed. We had identified miscommunication or lack of tangible facts as one of the sources of the problems. and by bridging the communication gaps; we could find a way to enhance the flow of factual information between the workers and the owners. According to him, a solution could be found with the introduction of new information and communication technology to the matatu sector.
We started out a pilot project codenamed “SMART-MATATU; where we fitted 10 Matatus {plying Rongai to Nairobi Route} with a top of the range and well supported Web- Based GPS Tracking device. This system offers wide range of Fleet Management Solutions that gives the matatu owners full control of their fleet and access to their vehicles from any location. Through a computer or smart mobile phone, the System enables the user to; know the vehicle’s real-time position by time interval, Receive alerts for off-road driving, over speeding, sudden breaking and various driving behaviors’ alerts. The system has a Geo-fenced control to regulate movement boundaries; it records the number of trips made to and from the destination and also kilometers covered at any given time.
Advantages v/s disadvantages.
Three months down the line, we have managed to sustain the project; though with lots of challenges. At the same time; we have also shared the findings and got feedback from matatu owners and drivers respectively. The project has had its casualties and beneficiaries. One driver and his conductor were fired when they were caught by police working past the hours; after lying to the owner that they had closed business. the crew abandoned the van but we were able to trace its location. This device is so unique compared to other tracking devices since it has specifically been designed to track driving behaviors; the owner can be able to tell at what time the engine starts running and when it was switched off, When a driver over speeds on speed bumps, exceed speed limits, overlapping, driving off-road or when he diverts to a different route.
On the other hand matatu owners are pleased with the device since they can now be able to know the actual number of trips the matatu makes to and from Nairobi and also compare driving style for different drivers. This will in the long run create trust and most important a better relationship between the owner and the workers. Some of the owners we interviewed told us that they would have no problem employing their drivers on permanent basis now that they know they can trust them.


Posted by on April 20, 2015 in Its life, Matatu matters


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Kenya’s matatu culture takes new shape.

The matatu industry has been the source of livelihood for hundreds of Kenyans and in different fields. The lifting of the ban on graffiti  by his excellency the president has brought out the best of local designers. Rongai is taking the lead in showcasing the best artists have to offer. here are some of our rides.


Posted by on April 16, 2015 in Its life, Matatu matters


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