Kenya: Gearing Up for Change in the Matatu Sector
When the government cracked the whip last year and ordered matatu operators to change their way of doing business and trade under savings and credit co-operative societies (saccos), many people in the multi-billion industry were caught by surprise.
Most operators rushed to form saccos, although they did not know how to manage them, as they had previously thrived in a cartel-like environment where they fleeced investors and turned away prospective rivals.
Despite its crucial role in the transport sector, the matatu industry is associated with ruthless gangs who have little regard for the law.
Many of the cartels do not even own matatus, yet they lord it over the operators at matatu terminuses.
Long before the government’s directive on saccos, one of the leading matatu operators in Kenya had already formed a company to manage its affairs.
A mention of Molo Line Travellers in most parts of the country evokes thoughts of a well organised transport system.
In an interview, the founder and chairman of the 16-year-old Molo Line Travellers Company,Mr Njoroge Bomasu Kariuki, tells of the benefits of such saccos.
The government has ordered all matatu operators to trade under savings and credit cooperative societies. What is your take on this?
It’s a brilliant idea. This is a multi-billion industry that, if well supported by good policies, can generate millions of jobs for our youths.
The sector, if well disciplined, will make the operators and the youths responsible Kenyans. Investors will not regret putting their money in the sector.
Cartels have ruled the matatu industry for years. How will these saccos survive?
Many matatu operators have no skills to manage saccos. The government should invest in the training of sacco leaders, where they would get management tips.
The government plans to phase out 14-seater matatus and replace them with mini-buses and buses. What do you think of this?
First, the government did not consult widely. The move seems ill-advised for now. It is a foreign idea borrowed from developed countries, but I fear it may not work well here. Kenya has not reached that level of development yet.
Had the government consulted us, we would have given our views on the issue. It’s unfortunate that some matatu leaders have been “pocketed” by bus manufacturers and are now lobbying for the phasing out of the 14-seater van.
Will your company invest in the mini-buses?
During the post-election violence in 2008, a number of our buses were torched. We suffered losses running into millions of shillings. And since our vehicles were not insured against riots and uprisings, our members were not compensated. We are very cautious this time around.
Molo Line has cultivated a good name in the matatu sector. What is the secret?
Respect: We respect our passengers as they are our employers. Secondly, we were the first company to introduce police checks before the start of any long journey. This helped us win over many passengers. The police checks netted bhang, drugs, firearms, and illicit brews.
The popular Michuki Rules have literally been thrown out of the window now. What is your company doing to restore the benefits the rules introduced?
Even before the Michuki Rules came into effect in 2003, Molo Line Company was already compliant with some of the regulations. When I introduced a number of these regulations, some of the operators termed me a traitor. But when they realised the benefits, they embraced the rules wholeheartedly.
The matatu industry is very competitive and cut-throat. How has your company survived the onslaught?
We have lived to the expectations of our customers by being among the top in care and courtesy. Our drivers attend refresher courses to keep them updated on traffic rules.
What is your proudest moment as the chairman of the company?
When we were recognised by the Head of State as one of the best managed matatu companies in Kenya.
And what’s your most difficult moment as a chairman?
When rehabilitating hardcore touts. Some of them were drug addicts, drunkards, pickpockets, and thugs. Converting them to the straight and narrow is not easy. I’m happy some of them are now employers and matatus owners.
Would you advise an investor to put his money in this sector?
Yes. With the new polices by the government, such as formation of saccos, things will never be the same again. What was mainly lacking in the industry was discipline.
What legacy do you want to leave?
I want to leave an indelible mark in the transport sector. I want to be remembered as a chairman who did not compromise on discipline.
What are your expansion plans?
Molo Line has more than 400 vehicles operating daily between Nairobi and western Kenya. We have more than 170 employees on a permanent basis. We are hoping to open more booking offices to increase job opportunities.