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Manage your Matatu with ease.

The biggest obstacle affecting Matatu business venture today is routes and vehicles management. This involves the regulators i.e NTSA & traffic police, Sacco’s / transport management companies and individual vehicle owners. The reason why Matatu business has become one of the most risky investments so far has everything to do with the three regulators for failing to come up with sustainable ways of Addressing comprehensively’ issues affecting the industry.

The government institutions (NTSA and the police) must first of all take it as a crucial responsibility to protect citizens from unnecessary deaths and injuries caused by road accidents. One way of doing this is by ensuring that only qualified and competent drivers are allowed on the roads. The failure by this two main regulators has trickles down to Sacco managements especially town service routes, where we have seen companies operating without ‘ Codes of conducts thus, no internal mechanism for disciplining employees (drivers and conductors).

This has greatly affected routes management, forcing individual vehicles owners to incur extra costs by hiring workers privately( at their own term) and additional managers to monitor their fleet. Most of the current Existing saccos are just but cartels only being useful when renewing Road Service license (RSL) or paying parking fee. Vehicle owners have been left to deal with the police, pay court fines or bailout drivers even when they are caught breaking traffic rules, abide by the terms set by stage managers and even allow his/her vehicle to be driven by “others” and still paying compulsory daily Management fee and other hidden charges to Sacco’s where they are members.

But this is not to mean that there are no solutions: viable solutions based on facts that have been tested and proven.

For the last 3 years, I’ve been working with a team of economics researchers from a US universities who have been in the country researching on public transport and road safety in Kenya. “I’m only allowed to share what is in the public domain, so probably the ministry can somehow get access to the full report”.During the said period, the team conducted intensive research ‘using various modern technology, gadgets and scientific investigations’ and the findings might perhaps set the basis to finding a lasting solution to reducing road carnage especially in the Matatu sector.

Accidents and the aftermath, has left many investors, drivers, passengers and other motorists counting losses, handicapped, indebted, hospitalised and others doing time in jail. None of the said misfortunes can be said to be of lesser consequences, for at the end of the day, it affects all of us but in different ways.

During our research that covered over 250 town service vehicles operating in Thika, kiambu, kajiado, kibra , south B, Banana and Dandora, the team was able to track all movements, speed, off-road and off-route driving, acceleration rate, vehicle location at all times and ignition details, driving behaviours among others.

For three years, the team monitored and relayed the findings of the investigations/research to participating owners and drivers alike and what came forth could be the breakthrough in creating a sustainable management structure that can be adopted by Matatu saccos to improve safety and proper fleet management.

For many would-be investors, the transport industry appears to present a business mode that has guaranteed returns judging by the demand for this services across the country. But for the insiders (those already in the business), this is not the case. Majority are suffering in silence, straggling to pay back loans to lenders, keeping the vehicle on the road, borrowing to a point where they are forced to source financing from other ventures to pay instalments or risk loosing their vehicles to auctioneers. This can be attributed to hidden pitfalls and lack of reliable guidelines in the management of matatu saccos.

Lack of credible data/information concerning the day to day running of Matatu business is one of the reasons we see many failing to get good returns from the transport market. By credible data, I want to emphasise on the five areas that are most important in ensuring smooth running of this entities.

1- The condition of the vehicles

2- Maintenance record

3- Driving pattern or behaviours

4- Accounting and

5-legal requirements.

Poorly maintained and un-roadworthy vehicles are a major contributor to road accidents and low returns in Matatu business. Brake failures, tire burst, poor suspension, poor vision (lights,mirrors and screens) and other factors that are considered lesser and are mostly overlooked contribute to most of the road clashes. A stalled motor vehicle on the middle of a busy road is a danger to other road users and this is mostly a result of poor maintainance. Although some of the accidents might not be fatal or injury causing, they still require money and time if repairs are needed.

One thing I noted from the research is that: most of the vehicles that were not in very good condition during the installation of the tracking devices had the most breakdowns and we’re spending more time at the garage especially during the normal working hours and recorded very low income to both the crew and the owner and replaced drivers very often compared to those which were in good condition at installation despite belonging /operating on the same route.

A well maintained vehicle is not determined by passing the mandatory government inspection test conducted by NTSA. ..A very big NOT.. This could be, and is supposed to be the case, but corruption by officers in this institution has seen many unroadworthy vehicles getting legal NB. legal not illegal licenses to operate. On the contrary a vehicle in good condition has to have the following–

A- Good working brake system

B- Good suspension that ensures stability of the vehicle

C- Well treaded tyres / not worn- out

D- functioning speed regulator/ governor

E- Recommended seats, windows and mirrors

F- Properly insured.

It is the duty of any willing investor who is determined to succeed in public transport to make sure that the vehicle they are bringing on the road meets the above.

Once the vehicle is in good condition, the next step is to start keeping a record for any expenses that goes toward maintaining the vehicle in that condition. Income and expenses

This must include parts replacement, dates and mileage for normal servicing ( oil change, brake pads/ linings, greasing, transmission fluids etc). To enable you to get factual/ credible figures on wear and tear, you’ll be required to find a way of calculating distance covered in a specific period. You can do this manually by noting down the odometer readings before the start of every working day and deducting the kilometers covered from the reading at the close of business: This will enable the owner monitor expenses and can easily tell if the business is making profit or loses. Alternatively, you can install a tracking device and get all this information on your Android phone or a computer.

Matatu owners must fill the void created by the regulators by ensuring proper and documented management of their vehicles and the behaviours of their employees on the roads to avoid making heavy losses. Also, they must be in touch with the day to day running of their business and not leave everything to Sacco’s and or management companies. At the end, it is the owner who suffers the most since most of this Sacco’s don’t own any of the fleet they manage.

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NTSA Versus ONGATALINE. The blame game..

Ongataline has been in the news for all the wrong reasons. The company has been trending in all media avenues, local and international televisions, print and the social media platforms. This came after a grisly road accident that claimed the lives of five passengers and left more than six injured.

It was a tragic moment that we would prefer to forget but the memories of the young souls whose lives were cut short will forever remain with us. The board of directors and the management of ONGATALINE TRANSPORTERS extends our deepest condolences.

The loss of just one promising young life is devastating, but the scale of this tragedy has deeply affect hundreds of parents, relatives, friends and the community at large. Our thoughts are now with the victims and their families.” We will never forget their demise and it marks the turning point for the change that all Matatu operators will from now adopt to ensure safety on our roads. Although no words can really help to ease the loss, our prayers are that those affected will find comfort at this difficult moment.

The company .

Ongataline transporters limited entered into the Matatu business six years ago as a privately owned company that manages public service vehicle in one of the Nairobi routes. It was founded out of necessity after the government passed the law that all passenger service vehicles must operate under an umbrella body:either a limited company or a savings and credit cooperative (Sacco)

This law was passed by parliament in 2003 and implemented the following year under the then minister of transport hon. John Michuki who is remembered for his famous “Michuki rules” There was law and order during his tenure and a good number of people saw this as an opportunity to invest in the this highly competitive transport market. When Michuki left the helm, those who succeded him did not continue in his footsteps and the sector slowly relapsed to its old ways. later the goverment introduced a constitutional body NTSA (National transport and safety authority)which was mandated to manage and regulate transport across the country.

NTSA was a noble idea but due to failure by those in charge, Impunity and corruption returned in full force. As time went by, officials became corrupt and grossly misused their newly aquired powers. NTSA became the law by itself and pushed corruption to a new level. Unlike the traffic police who would impound your vehicle and take you to court, this new outfit had the powers to sermon any Matatu sacco from any corner of the country, impound cars and even revoke licenses without a fair hearing or a notice to appear in court.

This resulted in strained relationship between some transport management companies and the regulators. Investors started lossing millions of shillings through unfair business practices. Most Sacco’s collapsed internally and cartel like groups were registered and given licenses to operate.

Matatu owners who had been in this business for long and those who had invested heavly came together to see how they could come up with a sustainable way of surviving in the transport business. Ongataline was one such company. It started with 20 fourteen seaters vans, seven minibuses and four buses. Today six years later the company has grown to a fleet of over 70 mini buses valued at over 400 million Kenya shillings close to 5 million US dollars . This vehicles are owned by various individuals and institutions we also have over ten buses owned by Kenyans working abroad.

Ongataline transporters ltd as agents for road transport came to the scene with the aim of improving productivity and helping investors maximize on their earnings and at the same time provide reliable public transportation that is sustainable. in the last 2years the company has invested heavily in science and technology in finding innovative ways to improve in areas that contribute to major losses.

Addressing road safety.

The company has been engaging private developers, designers and researchers from local and international universities in finding lasting solutions to ensure safety on the roads. Most of our vehicles are already fitted with tracking device which is able to :

1)track the location of the vehicle in real time

2)Distance covered and also tell the speed at which the vehicle is traveling at any given time and can also keeps records for all events from the time it was installed.

This has been a millstone in improving safe driving and easy monitoring of the vehicle which has shown positive impact in management and improvement of productivity. Ongataline transporters intends to have all vehicles fitted with sensor technology once it is available in the market to be able to monitor all their fleet.

Accountability

The other grey area is money transactions between passengers, conductors and the owners where issues to do with security, accountability and transparency is concerned

In 2014 NTSA passed a law that all Matatu must buy a specific cashlite machine from certain banks and other private companies. This was one brilliant idea that could have brought accountability but due to corruption in the regulating authority it turned out to be a fraud.

As a private company, this issue had to be addressed and in this regard, We have been conducting training workshops and sensitisation programs for all our drivers and crew to train them on application of new innovative technologies.

The system we are currently testing is designed to allow users/passengers the option to choose which Matatu they want to board, pre-book a seat and pay via mpesa. This reduces waiting time at bus stops since the system is able to give you a list of all buses and their locations, the fare being charged and also the estimated time it will reach your picking point or stage. The system is able to record all transactions making it easy for Matatu owners/sacco to monitor the number of trips and the amount collected from passengers. This has worked well with our management system and the issue of setting high targets was addressed thus reducing competition on the road and helping us to control our earnings.

Before the tragic accident on that fateful Sunday afternoon, the company had been voted the best transport management company in kajiado and also the fastest growing in the region. We had improved our relationship with financial institutions which had helped many investors acquire loans to buy more buses.

The decision by the regulators to deregister Ongataline came as a shock to us and to the institutions we had signed business contracts with and also to our passengers who had come to rely on our services. Despite our close cooperation with the regulators, the accident attracted a lot of media attention and public outcry which overwhelmed NTSA and they reacted aggressively ignoring all the gains that the company had made in improving road safety among other benefits.

Banning Ongataline to me is a setback to improved public service provision. And I also believe the decision was very unprofessional and was not done in line with the law but to suit some individuals and swift blames.

 
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Posted by on October 6, 2016 in Its life, matatu investment, Matatu matters

 

Beware of pickpockets!!!

When evil fights back.

It’s painful especially for me who calls himself a veteran in the Matatu industry, to feel, firsthand, what passengers feel losing variables in the hands of criminals who are well known to most Matatu crews. I have known this gang for years, I never allowed them to board my matatu. Majority of Matatu touts especially those operating along Langata Road, Bomas, st Mary, Rongai and karen for long, might have encountered them sometime in the line of duty.

They comprises A group of about 6 well built men mostly carrying backpacks or large envelopes. They boards as passengers and take strategic position inside, they mostly prefer a near empty Matatu where there is scuffle to get seats, once seated, they find a way to create confusion. ‘Fungeni belts, police wako na operation!!. Or they may choose to alight when most of the passengers are getting in robbing them as the squeeze it the small space between the seats. They may even pick a fight with one passenger and go physical, passengers starts leaving the nearby seats calling for the driver to stop. In the ensuring commotion everyone gets confused and they never knows when their laptops, wallets and phone left their bags.

A big number of conductors have been arrested after passengers reports to the police but that’s as far as it goes. Most of these crew don’t allow them in their buses ever again. The problem with this complains is because the police locks the crew at the station for a few hours but since there is no evidence that they have the stolen properties, they are later released.

Earlier today, we lost very important data in the hands of this pickpockets In one of Rongai matatu., “it so happens that, most often we don’t feel the pain when someone else is being victimized. We know it is wrong but we choose to ignore it. Not until we are the next victim” Today I felt the pain and I hope our security agents in Langata Nairobi area will do something.

For sevaral months now, I’ve been burning midnight oil together with a group of four US students who have been in and out the country several times working on a pilot project for the milion dollar idea that will completely change how we deal with cash in the public transport sector.

Unfortunately, the angry side of public transport in Nairobi came hunting and two of the founders of this great technology were robbed in one of the flashy Rongai Matatu. A laptop that contains months of research, photos, important drafts and loads of crucial info.

I cannot imagine this thieves selling this laptop to a back street dealer and all our months of work wiped in a touch of a button. This guys are well known and many passengers can relate to similar situation, it’s painful to feel hopeless and lose valuables daily in our matatus by people who can be identified because we lack ways of apprehending six healthy, gym going, ordinary gang. And no way of proving our complains.

Is their anything in the police training for this kind of crime?

Do we have anyone qualified to be posted at Langata to solve this problem we have lived with for many years?

 
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Posted by on September 11, 2016 in Its life, matatu investment, Matatu matters

 

Cost of owning a 33 seater minibus in Nairobi.

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.
WHICH MODEL IS THE BEST?

The Government has been 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 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. SANYO DIGITAL CAMERAThe 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.

CAPITAL,

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.

RETURNS
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.

DURABILITY.
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.

MANAGEMENT.
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.

SURVIVAL IN THIS BUSINESS
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.. wambururu@gmail.com
To book an appointment call: +254 724 384 676

 
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Posted by on December 8, 2015 in Its life, matatu investment, Matatu matters

 

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