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NAVIGATING NAIROBI Digital Innovation in Urban Transport and Logistics in Kenya Anisha Baghudana Julia Leis
CONTENTS
About 4
Credits 5
Executive Summary 6
Context 8
Pressures of Rapid Urbanization 10
Research Design 12
Findings 16
A Day in the Life of Nairobi’s Commuters 22
Drivers of Demand 26
Discussion 30
Appendix 1: Definitions and Acronyms 34
Appendix 2: Nairobi Transport Infrastructure Projects 35
Appendix 3: References 36
Acknowledgments 39
2 NAVIGATING NAIROBI UNDERSTANDING THE KENYAN MARKET FOR DIGITAL MOBILITY SERVICES 3
ABOUT CREDITS
The Institute IBGC-MasterCard Authors Advisory Team
for Business in the Fellowship Anisha Baghudana Julia Leis Christopher Tunnard
Global Context Since 2009, the Institute for Business in the Professor of Practice of International
Anisha is pursuing a Master’s in Julia completed her Master’s in Law and
Global Contest at The Fletcher School and Business, The Fletcher School
International Business at The Fletcher Diplomacy at The Fletcher School at
MasterCard’s Center for Inclusive Growth School at Tufts University in Boston. Tufts University in Boston in May 2014,
have collaborated to pioneer new models and Jamilah Welch
Before embarking on graduate studies, specializing in urbanization and
experiential learning in international business Institute of Business in the Global Context
she managed healthcare and beauty development. Her capstone project
through collaborative research projects. brands at Procter and Gamble across addressed the effectiveness of scenario
The Fletcher School’s Institute for Business Melita Sawyer
The IBGC-MasterCard Research Fellowship India, Greater China, ASEAN and planning in Nairobi and its potential in
in the Global Context (IBGC) was founded Ph.D. Candidate, The Fletcher School
in Inclusive Growth offers the unique Australasia. supporting urban disaster risk reduction.
in recognition of the need for a new
approach to the study of international opportunity to engage exceptional Master’s She is passionate about in technology Julia has prior experience living in Africa,
business and capital markets—one that candidates in cutting-edge research in and entrepreneurship in emerging first in Dakar, Senegal, and most recently
prepares global business leaders with frontier markets, on issues related to inclusive markets. She has worked in Africa in Ouagadougou, Burkina Faso, with
essential “contextual intelligence.” growth and business. This program supports previously as a Business Teaching Fellow Millennium Challenge Corporation as a
research innovation, allowing students to at the Meltwater Entrepreneurial School graduate intern working on diversified
Through four core activities—research, push beyond the scope of traditional market of Technology, Ghana. She has also agricultural activities. She is passionate
dialogue, education, and lab—the Institute research by engaging high-touch, in-field researched and published a paper on the about grassroots approaches to social
provides an interdisciplinary lens through methods to uncover important aspects of role of information and communications and economic change and the power of
which global markets and the underlying industry or economic development in the technology for growth of ICT to transform the base of the pyramid.
drivers of change can be understood. IBGC’s emerging and frontier economies. microenterprises in Indonesia. She now works for an international relief
Inclusive Growth Initiative aims to explore
This report is the result of this innovative and development organization.
the potential trade-offs and innovations
needed to disrupt classical business and collaboration.
economic frameworks and create truly
sustainable prosperity for individuals,
communities, and private enterprise.
MasterCard Center for
Inclusive Growth
The MasterCard Center for Inclusive Growth
was created to foster collaborative
relationships between academia,
governments, nonprofits, the social design
community, and the private sector. Through
the advancement of research and strategic
philanthropic investments, the Center will
support and enable those historically
excluded from financial services and serve
as a catalyst for change.
4 NAVIGATING NAIROBI UNDERSTANDING THE KENYAN MARKET FOR DIGITAL MOBILITY SERVICES 5
Image: Matatus near Kibera
EXECUTIVE
Government action to improve urban TFT startups played a unique role vis-à- Our research also showed that the
transport infrastructure, planning, and vis government and other private sector benefit of digital mobility services was
regulation remains inadequate in players by plugging information gaps restricted to high-income consumers
meeting the rising demand for inexpensively. Their frugal innovations with quality access to Internet, especially
SUMMARY
transportation and logistics services. helped commuters and consumers of via smartphones. Looking to further
Well-funded corporate initiatives too logistics services to work around the understand consumers of transport and
have struggled to make an impact. In inefficiencies in the transport system. logistics services, we built typologies of
contrast, technology startups have the three kinds of commuters in Nairobi
The value of information generated
developed services that are alleviating – taxi users, matatu users, and walkers.
by TFT startups had varying impact,
pain points in urban transportation. The typologies shed light on commuters’
captured in a framework called the
pain points and unmet needs, pointing to
Our team interviewed 65 key informants ‘impact pyramid’. On a scale of low
Nairobi, the capital of Kenya, is facing critical transportation and completed 16 observations in Nairobi to high impact, innovations ranged
potential business opportunity.
challenges. Traffic-related congestion, high road fatality rates in June-August 2014 to understand the
role of startup innovation in improving
from knowledge creators, to decision
enhancers, to trust builders. Startups
Recommendations are made to state
actors and the innovation ecosystem to
and an unregulated mass transit network have been critical transport and logistics. We found 30
technology-for-transport (TFT) startups
had to address the large trust deficit
among Kenyans to create high-impact
make the enable more ‘inclusive design’
of digital mobility services. Inclusive
issues for a long time in East Africa’s most populous city. Rapid with creative innovative services in the
taxi market, in cashless payment systems
innovations. For this, they were
adopting different approaches, from
innovation can transform the role of
tech-for-transport startups from
urbanization has aggravated these problems, resulting for public transport, in last-mile delivery, building capacity to leveraging providing symptomatic relief to
and a host of other areas. community networks. sustainably bettering transportation in
in a highly inefficient and inequitable transport system. the long term.
6 NAVIGATING NAIROBI UNDERSTANDING THE KENYAN MARKET FOR DIGITAL MOBILITY SERVICES 7
CONTEXT
Multilateral agencies and non-profits Rising Challenges in Figure 1: How Do People
have served East Africa for many years Transportation Commute in Nairobi?
from Nairobi. Now, many multinational
companies, technology startups, and With increased people and goods
social enterprises are setting up movement, Nairobi has become one of
operations and research labs in Africa’s the most congested cities globally (IBM 9%
‘Silicon Savannah’. Nairobi’s economic Global Commuter Pain Survey, 2011).
Home to the mobile payments revolution, Nairobi, growth has been accompanied by a Traffic costs the city $570,000 a day in
15%
lost productivity (Bloomberg, 2014).
the capital of Kenya, is one of the most promising surge in urbanization and consumer
demand. One sector that has been Nearly half the population is unable to
47%
frontier markets in the world. profoundly impacted by these changes is
transportation.
afford motorized transport and only a
third use matatus (ITDP, 2013) despite
70 percent having access to them
(Nyasetia, 2013). Traffic-related road
29%
accidents are the third leading cause of
death after malaria and HIV/AIDS
(Nyasetia, 2013).
WALK PRIVATE VEHICLES
MATATUS MISCELLANEOUS
(BODA-BODAS
AND BICYCLES)
Source: ITDP, 2013
8 NAVIGATING NAIROBI UNDERSTANDING THE KENYAN MARKET FOR DIGITAL MOBILITY SERVICES 9
URBANIZATION, TRANSPORT,
AND DIGITAL INNOVATION
Kenya’s urban population is growing much faster than the global
and African averages, putting pressure on the transport systems.
Weaknesses in Public to lower socioeconomic classes, are incubators, innovation and research labs,
Transport System forced to travel long distances, putting seed capital, and startup competitions
matatu commutes beyond their range of have become ubiquitous. In more
The matatu industry has struggled with affordability. Documented accounts developed markets, technology startups
regulatory failures and wide-spread show thousands of workers from Kibera such as Uber and Ola have created
corruption. The $2 billion industry has no walk up to 20 kilometers to work every discernible consumer benefit without
state ownership, as it began as an day (Kenya National Assembly Official any systemic change in transport
informal commute service. While it Report, 1985; ITDP, 2013). infrastructure, policy, or planning. In fact,
accounts for 5 percent of Kenya’s GDP their popularity has sparked regulatory
(Nyasetia, 2013) and employs 300,000 Additionally, transport infrastructure changes, and the data they generate
Kenyans as drivers, fare collectors, and development differs by the level of
show potential to improve policy and
bus stop attendants, among other roles affluence of neighborhoods. Roads in
planning.
(OBG, 2014), it has been difficult to low-income neighborhoods like
regulate and systemize. Several reasons, Eastleigh, where majority Somali Could transportation innovations create
such as the clout of private owners, populations reside, are of much poorer value for consumers in a frontier market
complex gangs like the Mungiki that quality than roads in suburban like Nairobi? Could benefits to consumer
extract “protection” fees, failure of neighborhoods like Lavington, Karen and transcend socioeconomic classes? Could
commuter-friendly Michuki rules, ill- Kilimani. these innovations address a spectrum of
planned policies, lack of political will, and transportation challenges? Could they
corruption at all levels have all played a achieve scale and longevity? Could they
hand in stymieing systemization. As a Digital Innovation in effect change in policymaking and
planning for transport? This led to the
result, the public has suffered from Transportation central question of our research.
unreliable and unaffordable service.
See Appendix I. As of June 2014, Internet penetration in
Can technology-for-transport startups in
Kenya was 47.3 percent (Internet World
Nairobi create discernible consumer benefit
Stats, 2014) and mobile phone
without underlying change in transport
penetration reached 79.2 percent
Disadvantaged Bottom (Capital FM, 2014). Mobile data
infrastructure, policy or planning?
In 2010-2015, Kenya’s population grew by its urban population will more than Inadequate Urban Road of the Pyramid accounted for 99 percent of all Internet
2.7 percent annually. In the same time quadruple (World Bank, 2011). Infrastructure subscriptions, and broadband
In many ways, low-income and even
period, urban population grew by 4.4
As the economic and political capital of
Despite the proactive attitude of middle class Nairobi residents face acute subscriptions accounted for one-fifth of
percent, twice the rural population growth 14 million Internet subscriptions (Capital
the country, Nairobi sees a large influx of disadvantages in the urban transport
rate (UN Data, 2015). This was greater policymakers, improvements in FM, 2014). Smartphone sales registered
immigrants and great increases in system. 60 to 70 percent of Nairobi’s
than the world and African average of 2 infrastructure have been slower than the
population. While the permanent home
rate of urbanization. Projects for population lives in informal settlements, explosive growth: 67 percent of phones
percent and 3.6 percent, respectively. As a sold by Safaricom in 2013 were
of 3.3 million people, the city has a which have been pushed to the city’s
result of this rapid growth, 25 percent of transport corridors linking highways,
daytime population of 4.1 million (World
new roads and by-passes, metro railway peripheries – occupying only five percent smartphones (HumanIPO, 2014), with
the population, or 12 million Kenyans, now sales expected to double by 2016
Bank, 2012; French Embassy in Nairobi, of the city’s land area – as real estate in
reside in urban areas. (UN Data, 2015) lines, a bus rapid transit, and new bus (Techweez, 2014).
2012; Ottichilo, 2010) due to incoming the CBD and suburban areas has
and matatu terminals have not started
By 2033, it is expected that half of workers from peripheral villages. This become increasingly expensive (APHRC, These trends have catalyzed the growth
on schedule or have very long lead
Kenya’s population will be living in cities has put immense pressure on the urban 2014; Mutiga, 2014). Residents of of technology startups and the
times. See Appendix II.
(Bloomberg, 2014). By 2045, Kenya’s transport system. informal settlements, largely belonging innovation ecosystem. Business
population is expected to double while
10 NAVIGATING NAIROBI UNDERSTANDING THE KENYAN MARKET FOR DIGITAL MOBILITY SERVICES 11
RESEARCH
Methodology business context for developing digital urban mobility. Participants were asked
innovation for urban mobility in Nairobi. about their customers, end users and
In-depth qualitative interviews with a Questions revolved around key vendors.
structured interview guide were macroeconomic and sociocultural
conducted. They helped us to draw
DESIGN
changes in the last five years that had
meaningful conclusions based on influenced the nature of innovation.
standard questions while allowing us Sampling Procedures
to explore new themes raised by Cluster II: Opportunities and Close to two-thirds of the participants
participants to draw unique insight. challenges in technology-for-transport were chosen from tech-for-transport
Observations supplemented the startups and micro-enterprises.
interviews and helped us gain an unbiased This examined pain points and unmet
Participants from tech-for-transport
needs in the movement of people and
Methodology. understanding of several themes.
goods in Nairobi. The objective was
startups ranged between ages 21 and 39.
The remaining participants were in the
Observations included events and
Interview Guide. conferences such as Tech4Africa,
two-fold. Firstly, we wanted to learn
what opportunities arose as a result of
age group of 21-49 years. Gender was
VC4Africa, Kenya Internet Governance not a criterion for recruitment. Having
Sampling Procedures. Forum, FailFaire and Google’s
gaps in the transportation and logistics
sector. Secondly, we wanted to
said that, over 75 percent of participants
#40Forward Women in Tech series. We were male.
Data Collection and Transcription. also tested the mobility apps, software
understand what considerations startups
had to think about in leveraging business Recruitment was done via a two-step
Data Analysis. and hardware whenever possible,
conducted site visits to see startups in
opportunity. process. First, pre-screening was done
based on Internet research or word-of-
Data Visualization. action, and visited corporate premises
and incubators on guided tours.
Cluster III: Engagement with mouth to find stakeholders and decision-
government and other private sector makers within target organizations. This
players applied to startups, incubators, investor,
corporate players, consulting agencies
This looked at how startups were
Interview Guide: and academia. Next, snowball sampling
engaging with evolving regulatory policy, was used to recruit other relevant
Focus of Each Cluster governance and infrastructure. We participants from technology and
The structured interview guide was sought to understand if startup-led transport sectors.
customized to different respondent digital innovation had influenced
groups. Questions fell within four regulations, governance and In the case of micro-entrepreneurs, we
clusters: infrastructural development in any way. hired a research assistant to recruit
participants via local community
Cluster 1: Trends in transportation Cluster IV: Consumers, benefit, contacts in Kibera, a large informal
and political economy value chain settlement in Nairobi.
This focused on understanding how the This delved into who was benefiting
forces of urbanization had changed the from startup-led digital innovation for
12 NAVIGATING NAIROBI UNDERSTANDING THE KENYAN MARKET FOR DIGITAL MOBILITY SERVICES 13
Table 1: Interview Participant Groups
Participant Group Total Male Female
Private Sector 49 38 11
TFT Startups 30 24 6
Corporate Players 3 3 0
Micro-Enterprises 10 7 3
Incubators 5 3 2
Investors 1 1 0
Public Sector 1 1 0
International Organizations 1 1 0
Not for Profit Organizations 3 2 1
Subject Matter Experts 11 8 3
Academia 6 4 2
Consultants 3 2 0
Bloggers 2 2 0
Total 65 50 15
Data Collection and Interviews were audio recorded with the Data Visualization
Transcription consent of participants for purposes of
transcription. Participants’ identities Data for figures and tables in the
The fieldwork was conducted in Nairobi have been kept confidential in line with following sections was coded based on
over a period of eight weeks from June the consent form. Only those who answers to open-ended questions.
15, 2014 to August 15, 2014. Interviews provided consent to be identified by They represent unaided opinions of
lasted 60-90 minutes. name and organization have been participants who thought to deliberate
quoted in this report to illustrate upon them in the course of the interview.
All interviews were conducted in English.
findings.
57 interviews were conducted in-person
in Nairobi, in public spaces or in the
participant’s workspace. One interview
was conducted via email and six were Data Analysis
conducted via phone or Skype. The
Content analysis consisted of
principal investigator introduced the
transcribing and classifying information
research topic, gained written consent
according to pre-determined themes.
for the interview after making the
Classification was done via pattern
participant aware of risks and benefits,
recognition. Comparative analysis was
and then led the questioning. The
done to trace commonalities and
interview process was piloted in the first
variations in participants’ answers, and
week of fieldwork and refined thereafter.
this generated more findings under each
pre-determined theme.
14 NAVIGATING NAIROBI UNDERSTANDING THE KENYAN MARKET FOR DIGITAL MOBILITY SERVICES 15
FINDINGS
To answer this central question private sector players to drive In terms of product type, 67 percent of
sufficiently, we broke down our analysis fundamental change in infrastructure, innovations were apps, 20 percent
into three segments: policy, or planning? software, and 13 percent hardware. The
startups were between six and 24
Abundance of Digital months old. Interviewees said that the
Mobility Services An Abundance of Digital mobility services market was exciting
and dynamic. They saw immense
Can technology-for-transport startups in Nairobi create How many innovations were directed at Mobility Services business potential in applying
resolving transportation issues, and did
discernible consumer benefit without underlying change in they address a broad range of problems?
In our research, we interviewed 30
tech-for-transport startups and found
technology to Nairobi’s transportation
woes. Furthermore, they saw
transport infrastructure, policy, or planning? Quality of Tech-for-Transport
15-20 additional digital mobility services
in market. The sheer number of
opportunities to learn from successful
digital mobility services and reapply
Innovation
innovations showed there was energy in those solutions in foreign markets. As a
What unique consumer benefit did the innovation community to find fertile testing ground for mobile
startups create, was the benefit not only solutions to transportation challenges. It payments-enabled services, successful
unique but also incremental or value- was also indicative of the market Kenyan innovations could also be taken
adding, and did a large number of potential of mobility services. to other emerging markets. These
consumers (i.e. households) of different potential synergies attracted non-
Services addressed a wide range of
socioeconomic classes benefit? Kenyans and Kenyans to work with each
transportation problems. Figure 2 on the
other. A majority of startup teams – 17 of
following page shows the breakdown of
Effect on Policymakers and Other 30 – encountered in this study had a mix
the 30 startup interviewees by the type
Private Sector of Kenyans and non-Kenyans working
of value proposition.
together. Nine startups were comprised
Did the presence of tech-for-transport
startups compel the government or
16 NAVIGATING NAIROBI UNDERSTANDING THE KENYAN MARKET FOR DIGITAL MOBILITY SERVICES 17
of all Kenyan members, while four
startups had all non-Kenyan members.
emerging cities in other parts of the
world too. Two participants said they
anticipated rise in smartphone usage
(not only ownership), wide base of
Table 2: Comparison of Roles of Government,
While most startups were yet to break
planned to explore other markets within
Africa, such as Cairo, Lagos, and
consumers accustomed to using mobile
money, presence of a large expatriate
Corporates and Startups in Mobility Services Market
even, there was great confidence that
Johannesburg. Three participants had no population with high disposable income,
they would achieve scale and
plans for expansion. and growth of e-commerce.
sustainability. Fourteen interview Sector Nature of Innovation
participants had plans to expand across Improvements in road and ICT
East African cities, notably Kampala infrastructure were the top reasons for Government • Design of infrastructure
(Uganda) and Dar-es-Salaam optimism regarding the local digital Unique Benefit to • Development of regulatory policy
(Tanzania). Eight participants had plans mobility services market. Twenty-one Consumer
to scale within Kenya, to Mombasa, startups said marked improvement in Corporate Players • Development of large-scale ‘smart’ solutions
The role of startups was considered • Development of go-to-market mechanics for infrastructure development
Kisumu, Naivasha, and Kisumu. Three road infrastructure since 2012 was a
unique as compared to that of the
participants said they would look to huge positive step forward. Sixteen
government and corporates. Startup TFT Startups • Plugging information gaps inexpensively
global markets because the problem startups mentioned advancement of ICT
innovation in transport was plugging
they were addressing was applicable to infrastructure. Other reasons included
information gaps, inexpensively.
Elaborating on this, participants made
Figure 2: Digital Mobility Services: Value Proposition
two points. ‘Impact Pyramid’—From Therefore, such innovations also have Tackling the Trust Deficit
Low to High-Impact greater impact. Innovations such as taxi
Firstly, a host of transportation Trust building was an imperative for scaling
apps that provide price information and
challenges arose from the lack of sustainably. Participants spoke about the
GOODS DELIVERY 7 The impact of mobility services varied as allow the user to book the taxi with the
information. For instance, information on deep sense of mistrust Kenyan consumers
they scaled. This is captured in a lowest quote enhance decision-making.
4 traffic conditions could help drivers plan shared regarding transportation services.
TAXI HAILING framework called the ‘impact pyramid’,
their travel routes and times better. At the peak are innovations that are trust News media illustrate this point. Nairobi is
based on participants’ perceptions.
3 Pricing information, especially in real builders. These innovations go beyond often notoriously referred to as
GEOLOCATING Impact was conceptualized as a multiple
time, could help commuters choose the knowledge creators and decision ‘Nairobbery’ (South China Morning Post,
of scale (i.e. profitability) and
TRAVEL AGENCY /
3 best taxi operator. Information on geo- enhancers because they are able to gain 2014; UrbanAfrica, 2014; AlJazeera, 2013;
TICKETING sustainability (i.e. long-term relevance in
locating destinations could help courier consumers’ trust. Thereby, they become The Economist, 2002). On average, the
market).
CASHLESS PAYMENTS 2 companies optimize time and effort. not only scalable but also sustainable. city witnesses three car-jackings a day
Therefore, tremendous business At the base of the ‘impact pyramid’ are These innovations are high-impact and (SCMP, 2014).
FLEET MANAGEMENT 2 opportunity for startups existed in innovations that are knowledge creators. transformative.
providing data and analytics. Information they provide makes
TRANSIT ADVERTISING
2 consumers more aware and enables
AND SURVEYING Secondly, startups lacked access to
them to communicate better.
capital due to low investor presence in
COURIER FINDING
1 Innovations such as apps that provide
SERVICE Nairobi. Hence, startups developed LOW NUMBER
real-time information to a courier TRUST OF STARTUPS
low-cost solutions. For instance, a
ROAD SAFETY 1 company about its fleet’s whereabouts BUILDERS
successful local app called Ma3Route
are at this level. A great number of
INVESTMENT AND INSURANCE provided information about road
1 innovations were expected to be at the
FOR VEHICLES congestion via crowd-sourcing. This was
base of the impact pyramid, i.e. plentiful DECISION ENHANCERS
more economical than the offering from MAJORITY
TRAFFIC INFORMATION 1 in number but lowest in impact.
a project with similar intentions, IBM’s OF
Twende Twende. At the next level are innovations that are STARTUPS
TRANSIT INTERNET 1 decision enhancers. The key difference KNOWLEDGE CREATORS
between knowledge creators and
TRAVEL INFORMATION 1 decision enhancers is that the ability to
act upon information provided by the
VEHICLE RESELLING 1 Impact of Startup Innovations in Transport in Nairobi
innovation is greater with the latter.
18 NAVIGATING NAIROBI UNDERSTANDING THE KENYAN MARKET FOR DIGITAL MOBILITY SERVICES 19As one participant termed it: “There is a
huge trust deficit among Nairobi’s “We know how important community is to Kenyans.
commuters and logistics’ consumers. It is
built over years of thefts, accidents, fraud Our marketing model is therefore built around
and petty lies when it comes to
community relationships. We are just slipping
transportation services.” – Bryan Kariuki,
Country Manager of East Africa, TravelStart technology into how the traditional taxi sharing system
The trust deficit manifests itself in works in Nairobi society, rather than changing their
different ways. One taxi startup
described facing operational glitches as
cultural habits.” – Interview Participant (Startup)
neither the drivers nor the passengers
trusted strangers on the road. Another
startup faced issues of untrustworthy
staff. Their drivers, when equipped with Figure 3: Digital Mobility Services: Target Market
smartphones or given valuable products According to Startups and Other Interviewees
for delivery, could not be trusted to
safeguard the assets. In extreme cases,
some had stolen the products.
Startups experimented with a few
approaches to reduce the trust deficit.
The first approach was to leverage
M-PESA since it was a trusted brand.
The second approach was to build
‘offline’ capabilities to support the
‘online’ value proposition. Participants
were training partners and contract staff
to provide quality customer service.
For instance, an e-ticketing agency had
set up retail operations so that
customers could visit and feel confident
about doing online transactions with HIGH INCOME MIDDLE CLASS LOWER INCOME
them. The third approach leveraged
72% 28% 0%
community networks.
56% 39% 6%
ENTREPRENEURS OTHER INTERVIEWEES
Who’s Benefiting?
Digital mobility services were targeted Innovations were not only limited to not enjoy smartphone data access were
mainly at high-income and upwardly high-income consumers, but were also getting left behind, as were consumers
mobile consumers, as Figure 3 shows. limited to those with quality access to who ‘walked’ to work and lived in low-
internet. Access to internet is defined as income settlements. Internet access and
Entrepreneurs were more likely to see
quantity (driven by affordability and disposable income were positively
low- and middle-income consumers as
availability of internet) and quality (fast, correlated, creating and even greater
part of their target demographic than
steady and via a smartphone vs. low, vacuum among those low-income,
other interviewees, but most still
intermittent and limited to a feature low-access consumers.
targeted the wealthiest group.
phone or desktop). Consumers who did
20 NAVIGATING NAIROBI UNDERSTANDING THE KENYAN MARKET FOR DIGITAL MOBILITY SERVICES 21A DAY IN THE LIFE OF WAMBUI: THE TAXI USER
NAIROBI’S COMMUTERS
Wambui is 28 years old, and works for a
multilateral agency. She is single and
earns in the high-income bracket. She
owns a high-end Android-based
smartphone and is a regular user of
Facebook, Twitter, and Whatsapp.
For her, commuting and getting products
delivered need to be hassle-free. She
wants commute and delivery decisions
to be made easy, involving minimal effort.
Commute Patterns
Wambui takes taxis to work and when She usually pays in cash immediately cash out of his M-PESA account. This
she goes out with friends. She has a after the ride or in the next ride. The makes the taxi fare expensive. I wish there
regular taxi driver that her office has driver is accommodating of rolling was a better way to pay the taxi guy even
contracted. Every day, Wambui “pays in accounts. There are times when he when I run out of cash.”
paper,” i.e. she signs a paper receipt after needs payment immediately, so if
the ride. The taxi driver submits the Wambui does not have cash, she pays Trial Barriers
paper sheets to Wambui’s employer at through M-PESA. Each time she does
the end of the month to get paid. Being a savvy smartphone user, Wambui
this, the driver asks her to transfer an
is aware of some of the taxi apps
Wambui uses the same taxi driver after amount equal to the fare plus the fee
available locally – EasyTaxi, Maramoja
work hours too. She has negotiated Safaricom charges to draw cash out from
and SasaCabs. She has tried a couple of
lower fares than the ones charged his M-PESA account. Therefore, Wambui
them. She remembers being given a free
officially to her “international” agency. prefers to pay in cash over M-PESA.
EasyTaxi voucher at some public event.
She trusts the driver as she has traveled Overall, she is satisfied with this system
with him often. She is confident of her Overall, she prefers to use her taxi driver
of commuting. However, she wishes a
safety with him and does not really care over these taxi apps because:
few improvements could be possible.
to know his credentials such as past
• Ill-designed mobile sites make her
driving record or license. Pain Points and Unmet Needs apprehensive to trust the service.
Wambui calls him whenever she wants to “Sometimes, my driver takes time to come • Her experience using the taxi apps
go out—without much advance. If he is and pick me up, because he is on another has not been great. Once, when she
available, he picks her up. When he is not,
Who are the consumers of mobility services in Nairobi? he sends a relative or friend to drive her.
job. The wait time can be up to half an hour.
I wish I didn’t have to wait that long.”
tried booking a driver through an app,
he did not come to pick her up at all.
Wambui does not negotiate the taxi fare Another time, the taxi driver was
“When I use a driver for a long time, his
This question, looking into which consumers are really each time. Since she promises ‘repeat’ service invariably becomes sloppy because
unfamiliar with how to use a
business to the taxi driver, she knows he smartphone and could not find her for
benefiting, led us to seek a better understanding those who will give her a competitive price. At the
he knows I am dependent on him. He fails
to arrive on time, or does not pick up his
a long time. When he arrived finally,
same time, she realizes that he Wambui did not feel entirely
use mobility services in the city. The typologies described here, sometimes charges her more than the
phone, or starts to mark-up fares more
often. I wish I had other trustworthy taxi
comfortable traveling with someone
usual mark-up, but lets it go because she she did not know.
help illustrate how commuters experience transport and values the convenience of a regular,
drivers to choose from,, so that I am not at
the mercy of one driver.” • She did not know any friends or family
logistics services, and what motivations influence their use trusted driver who picks her up when she
wants him to, and waits for her when she “When I pay with M-PESA, I have to pay
members who were using such apps too.
of transport innovations. is running late, much like a chauffeur. the drive the extra Safaricom fee to take
22 NAVIGATING NAIROBI UNDERSTANDING THE KENYAN MARKET FOR DIGITAL MOBILITY SERVICES 23JOHN: THE MATATU USER OTIENO: THE WALKER
John is 33. He is a fruit shop owner in Commute Patterns Otieno is 26. He works in the industrial
the City Park fresh produce market in area and lives in Kibera. Daily, he walks
Parklands, a posh neighborhood close John leaves very early every day to take to work. He uses a basic phone. He uses
to Westlands in Nairobi. The market is a matatu to work. He tries to avoid the Facebook on it. For him, price is the
visited by a large number of well-to-do morning peak hour when fares are all-important factor in considering any
Indians who live in that area. John lives higher. If he gets SMS notifications from service that improves his commute.
in Kibera, about ten kilometers away. Ma3Route that traffic is bad on his route,
He lives with his wife and three year-old he either takes a boda-boda or walks, Pain Points and Unmet Needs
child. John moved from a village in depending on how far from the market
he is. “I wish I could get to work faster without
western Kenya to Nairobi when he was
spending as much as a matatu ride costs.”
still a teenager to live with a relative If he can, he walks instead of taking a
in Kibera. He did many odd jobs while boda-boda because the latter is “I wish I could know when matatu prices
growing up, before starting to run expensive. He is used to switching his dip so that I can take a matatu on days that
his own shop. mode of transport often. I can afford it.”
John commutes via a matatu for a fair On the matatu, he usually has no way of “I wish I could utilize my time better when I
distance from Kibera, before walking the predicting the fare on a given day. It walking to work.”
rest of the way to the City Park market changes depending on the traffic and
which is not served by any matatu route. weather. Traffic worsens in a lot of Trial Barriers
Until recently, he used to walk to work. situations - when schools reopen, when
Commuters like Otieno are a largely
He has had a G-TIDE smartphone for there is an event in the city center, when
underserved segment of the population.
quite some time. He uses it mostly for the President is taking out an entourage,
Without any digital services being
calling. He uses data sparingly, and and so on.
converts airtime to data in small Trial Barriers created to make their commute better,
He has little reason to commute outside the following trial barriers are foreseen:
amounts such as 10 KES and 20 KES John is not aware of any digital services
when he needs it. of work. His wife and child stay at home,
that address his pain points. He has • Resistant to shift to any new digital
and barring rare circumstances such as
heard of a way to pay in matatus without service without the promise of cost
He is also aware of Whatsapp because when they visit their village, there is not
cash, but has not used it. He does not savings.
his wife likes to see picture messages of much travel to do.
new fashion clothes through the app. He know what this system is for.
• Lack of awareness of new digital
does not use any other app much. He Pain Points and Unmet Needs Cashless payment systems can help service due to low data usage.
really likes Ma3Route, but knows of it standardize fares to address John’s first
only as an information service delivered “I wish the matatu fare were standard • Potentially, low levels of airtime
pain point, but have faced several design
by Safaricom through SMS. so that I would not have to think every usage too.
issues in recent past that their
single day whether to walk instead of
For John, timely journeys are important. awareness and trial is low by the likes of
taking the matatu.”
He cannot afford to reach the market John. Poor design has made registering
late or he will lose business. Therefore, “Commuting takes up so much time for the service difficult.
he needs to know that a commute can because of the distance and traffic. I wish I
For instance, certain cashless cards
be made on time, and in a safe manner. could get to work faster and reach home
(there are seven in operation in Nairobi)
He would like to be well-informed in real faster so that I can run my shop better and
require the creation of a new email
time about the status of the journey, and spend more time with my family.”
address when in fact a lot of matatu
therefore seeks as much information as “When I am compelled to take a boda- commuters do not use email at all.
possible. Having information makes him boda, I am scared because it is unsafe. I Another such issue is that some
believe that he can make a better wish there was a safer way to travel while cashless cards require a minimum
decision. having the speed of a boda-boda.” amount of deposit to be used, which is
too high for matatu commuters.
24 NAVIGATING NAIROBI UNDERSTANDING THE KENYAN MARKET FOR DIGITAL MOBILITY SERVICES 25DRIVERS OF DEMAND
Expatriates E-Commerce for purposes of communication and
information) and disappeared.
The presence of a sizable expatriate Tthe growth of e-commerce fuelled the
population encouraged the growth demand for logistics services. Another serious challenge was in making
of taxi and delivery services. It led timely deliveries, as Nairobi had a
A key driver for logistics services in rudimentary physical addressing system
to the evolution of the mobility
Nairobi was the growth of digital which made last-mile geo-locating
services market.
commerce businesses, especially in problematic. As a result, e-commerce
A large number of mzungus or foreigners fashion and electronics. Some startups were still trying to figure out
reside in Nairobi, working with e-commerce startups had even set up how to deliver on promises of same-day
multilateral agencies, non-profit their own in-house logistics services. delivery or delivery within the time they
organizations and social enterprises Others had employed and trained a fleet ‘guaranteed’.
(Businessweek, 2014). They drove of boda-bodas or taxis. Digital services
demand for transport and logistics had come up around these operational The third challenge that several
services in Nairobi, based on their prior models to help manage fleet, ensure participants mentioned was that couriers
exposure to innovative digital services in safety of boda-boda drivers, monitor often could not read maps or use
other countries. drivers real-time to hold them informative apps on smartphones. In all,
accountable, help manage supply chain, the logistics space for digital commerce
The actual and perceived lack of safety had a lot of business opportunity that
help rate couriers, and help source
on Nairobi’s roads drove many foreigners could be leveraged by startups.
couriers.
to use taxis. Various taxi apps have
arguably come up to cater to their needs There was still plenty of scope to design
(Savannah Fund, 2014), that included innovations in this space. Interview
transparent prices to eliminate participants spoke of pain points that Innovation Ecosystem
negotiating with drivers, more choice of none of the existing innovations The nascent state of the innovation
taxi drivers, and preference for familiar addressed satisfactorily. One of the main ecosystem promoted building of value
services from home countries. challenges that several participants chains, which drove growth of
observed was that their couriers – who transport and logistics innovation.
Similarly, delivery of food and groceries
were often contract staff that worked
was popular among foreigners. As the Nairobi has become the technological
part-time or on hourly basis – stole
cost of delivery services could be hub of East Africa. The iHub on Ngong
products or smartphones (given to them
recouped only by top restaurants and
large grocery stores – which operated on
premium, first-world pricing structures
– only foreigners and high-income or
wealthy Kenyans could afford them.
Therefore, expatriates, repatriates and
high-income locals created demand that
showed some signs of trickling down to
the middle class. It was interesting to
note that two of three taxi apps, three of
three food delivery startups, and a
last-mile delivery startup we interviewed
were all led by expatriate founders or
CEOs.
26 NAVIGATING NAIROBI UNDERSTANDING THE KENYAN MARKET FOR DIGITAL MOBILITY SERVICES 27payback due to government interest and Smartphones in 2014 were available for
investment in making cashless payments as low as US $40 in Nairobi. Safaricom
a reality, it is a competitive space. More management has said on various
than seven kinds of cashless payment occasions that they expect more and
systems were being piloted, from more Kenyan consumers to trade up to
Google’s BebaPay to Kenya Bus Service’s smartphones.
Abiria.
Interview participants shared the
As entrepreneurs were realizing, a sound optimism, albeit cautiously so, that the
cashless payment system could be future of digital innovation in Kenya lay
enforced across the transport network. in designing for the smartphone. Rapid
Beyond matatus, parking spaces in malls adoption of smartphones had allowed
Road houses three incubators and a tech and office complexes have also startups to provide advanced transport
community space, as do several other introduced cashless payments due to the services. Indirectly too, smartphone use
business incubators in the Greater desperate need to expand parking had driven up e-commerce (through
Nairobi Area. The innovation ecosystem revenues and improve management. apps like Whatsapp) which drove
is growing, on the strength of ambitious Again, there is strong government demand for logistics services.
support for this given their aim to rein in Safaricom had created innovative data matatu industry, the map helped visualize need for “ground-truthing” initiatives to
tech enthusiasts and entrepreneurs.
Accessibility to low-cost data had also packages for as low as 10 KES and 20 the network of routes and matatu stops in ensure they work for the local context.
informal activity and boost tax collection
At the same time, the ecosystem is in a improved. Free wireless internet was KES, and sold them at street stalls Greater Nairobi. It was completed
(Nairobi City Council, 2014). As major players Google and Equity Bank
nascent stage of growth. Local increasingly available in cafes, university alongside similarly priced loose cigarettes, January 2014 and unofficially adopted by
campuses, mall complexes, and other designed a cashless payment system for
incubators have to collectively still put shampoo sachets and newspapers. This the government, as per interview
public spaces. Google’s partnership with matatus called Bebapay, the government
out the first generation of successful too helped increase demand for digital participants. However, rich learnings from
startups. As entrepreneurs develop Smartphone Prices internet service provider Wananchi Group transport and logistics services. the project on improving coverage density
took interest in adopting the system.
had created Wazi Wi-fi, a high-speed Other than standardizing passenger fares
innovations, they have realized the more Falling prices of smartphones and and planning new routes and terminals
wireless broadband network in Nairobi. and providing safe, reliable service, it
innovation is required to create strong increasingly accessibility of low-cost remain untapped so far.
Its hotspots provide free internet access could also help boost tax revenue to
value chains, and close gaps in data promoted use of digital transport
for the first ten minutes, and then charge
EFFECT ON The energy in the innovation ecosystem improve regulation of the transportation
operational capabilities and supply innovations. It also led to reverse
chain. a nominal fee (Computer World, 2011). POLICYMAKING AND has generated interest among large sector. Bebapay did not find success, as
adoption of innovations on basic
mobile phones.
OTHER PRIVATE private sector players to solve problems commuters and matatu operators have
Transport and logistics startups are in transport. IBM’s Research Lab in resisted adopting cashless payments
SECTOR PLAYERS
catering to this demand, making useful Nairobi – which has a team devoted to (Shanghai Daily, 2014), and the service
innovations for startups in different By and large, startups chose not to understanding and improving ‘human was recently withdrawn.
sectors ranging from water to engage with government and mobility’ – implemented a technology
Despite a lack of clear success in
agriculture, education to sanitation, policymakers, as they were seen as initiative with Internet service provider
creating underlying change, the effect of
health to financial services. bureaucratic and difficult to work with. Access Kenya called ‘Twende Twende’
tech-for-transport startups in generating
Several startup participants had tried but (“Let’s go, let’s go” in Swahili) in 2012.
interest among public and private sector
been unable to build a relationship with thirty-six cameras installed on roads
actors is commendable.
Cashless Payment the government, either as partners, with high traffic fed real-time
clients, or key stakeholders in the welfare information about traffic to a central
Government support for cashless of the transport system. control office, which was tasked with
payment systems on matatus is also disseminating it to the general public
an important demand driver. One exception was the Digital Matatus
(Stanford Graduate School of Business,
map, a result of a collaborative effort in
The market for cashless payment 2013). The initiative failed as cameras
geo-mapping between researchers from
systems is currently very small due to got stolen and sensors did not work as
the University of Nairobi and
resistance from matatu operators and predicted, according to interview
Massachusetts Institute of Technology.
commuters to stop using cash on the participants. Like IBM, several
For the first time in the history of the
minibuses.Yet, given the potential technology companies are realizing the
28 NAVIGATING NAIROBI UNDERSTANDING THE KENYAN MARKET FOR DIGITAL MOBILITY SERVICES 29DISCUSSION
Digital mobility services have been
innovative, reliable, and cost effective, “It takes money, and confidence, for a middle class
offering answers to a wide range of
problems. While it is too early to individual aspiring to become an entrepreneur to walk
quantify their impact in a meaningful
into one of the incubators on Ngong Road.”
way, there is no doubt that they are
bringing about positive change. —Interview Participant (Blogger)
Within just five years of significant changes in the political
This report identified the unique place of
economy – devolution of governance, drafting of a new tech-for-transport startups in the trust, it is important that startup government’s goal of boosting tax
system, and proposed how to think marketing models engage the collection, startups need to develop
constitution, laying of undersea fiber optic cables— about the nature of their impact. It must community as Nairobi is a city where the value propositions to make pricing
be reiterated that these startups play a stakeholders are numerous. affordable and transparent for the
a profusion of startups have made remarkable strides in valuable role by providing information consumer while creating profitability for
The typologies show that there is still a
inexpensively, which helps commuters
identifying and addressing transportation challenges. and consumers of logistics services
lot of room to design solutions better.
matatu owners and operators. Once
again, community buy-in is important as
The taxi user may have several digital
enjoy better awareness, make better there are many stakeholders in the
innovations targeted at her today, but
decisions, and transform their habits. matatu business model. Startups also
few are close to understanding what will
need to help commuters travel safely
Indeed, startups must lay emphasis on add most value to her. On the other
and save time traveling, two issues that
building trust through their innovations hand, startups are paying no heed to the
cashless payment systems – primary
and operations, so that they can run matatu user’s needs in their misplaced
innovation for matatus – are not
sustainably and truly have impact on enthusiasm to design cashless payment
equipped to address. Finally, startups are
changing how transportation works in a systems. Instead of focusing only on
not designing for the ‘walker’ today.
rapidly urbanizing city. To engender ‘smart’ systems that align with the
30 NAVIGATING NAIROBI UNDERSTANDING THE KENYAN MARKET FOR DIGITAL MOBILITY SERVICES 31smartphones or data. Simple solutions
“We operate a simple SMS-based taxi booking system are convenient to use, reliable and
inexpensive.
MUCHATHA because even today, not all smartphone owners use
KAHAWA SOUTH • Design operational and marketing
internet to order a cab. SMS and calling is simple, and models that engender trust among
many of our patrons prefer these tools to using the customers. Invest in contract staff by
WANGIGE providing training and benefits so that
internet and smartphone.” – Founder, GariSMS a culture of trust is developed.
KASARANI
HIGHRIDGE “Those who are not willing to design for feature phone Recommendations
for Government
users and walkers are simply being lazy.”
• Invest in solving transportation
EASTLEIGH – Mark Kamau, Lead, UX:Lab at the iHub challenges of ‘walkers’ – how to
KAWANGWARE NORTH
KILIMANI improve walkability, and/or help them
– came from the middle class. Mapping optimism for smartphone adoption does trade up to motorized pubic transport.
the physical locations of startup not capture the fate of these basic phone • Consider transportation challenges of
EMBAKASI incubators in Nairobi (Figure 4), we see users. As one interview participant said: matatu users in a wholesome manner
NAIROBI SOUTH how they are concentrated in affluent to help implement cashless payment
“Those who are not willing to design for
neighborhoods like Kilimani and systems. Extend support to problems
feature phone users and walkers are simply
Westlands. Ngong Road, with its of variable pricing, changing matatu
being lazy.” – Mark Kamu, Lead, UX:Lab at
Figure 4: Startup Incubators in Nairobi concentration of incubators, has become routes and schedules, and matatu
the iHub
a converging point for innovators and safety.
entrepreneurs. Yet, incubators remain out Another interview participant warned
This segment represents 47 percent of wealthy consumers, referred to as the and overlooked the local context. For of reach for a number of local against misinterpreting rising smartphone • Guide new and existing incubators to
Nairobi’s population or nearly 22 million “creating class” by an interview instance, some innovations banked on entrepreneurs. ownership for rising data usage: ensure their services are more
people who are being left behind in this participant. people to read and understand maps, accessible and affordable to the
Drivers like e-commerce growth too middle class. Engage donors and
‘innovation divide’. Considering that this whereas most people in Nairobi only
The “creating class” turned into steer logistics innovations towards impact investors to make this a
demographic largely belongs to the used landmarks.
entrepreneurs, but was suited to design consumers with high disposable income. Recommendations criterion in providing funding to
lower socioeconomic classes that
expend a greater fraction of their
only for that group. This is because Very few entrepreneurs in our study Government support for cashless for Startups incubators.
people of the “creating class” reapplied – which comprehensively covered payment systems on matatus and in
resources – time, effort and money – to • Develop value propositions that truly
innovations from their home countries, transport and logistics startups in Nairobi parking spaces also ignores the ‘walker’
gain work opportunities, the utter lack of address the pain points and unmet
innovation for them will only perpetuate
demographic. The fact that its support “We operate a simple SMS-
needs of taxi users and matatu users.
has made cashless payment systems a based taxi booking system
more income inequality and systemic Tap into community networks and
competitive and innovative space shows
inequities. “The creating class is those everyday consumers and deliver value-add to all stakeholders because even today, not all
that similar support can invigorate
to create scalable innovation. smartphone owners use
As the drivers of demand show, there are earnest individuals who want to expand their ability to innovation that improves walkability or
internet to order a cab. SMS
a few different reasons why ‘walkers’ are enables trade-up to motorized transport. • Incorporate human-centered design
getting left behind, unable to even trade
secure best value for their hard-earned money and However, the government is not playing
and calling is simple, and
based on an understanding of trial
up to matatus (which are accessible to provide opportunity to benefit as sellers from that same this role currently. barriers. Particularly, consider that not
many of our patrons prefer
70 percent of the population but all transport innovation is necessarily these tools to using the
affordable to only 30 percent). With marketplace.” Lastly, at least one-fourth of Nairobi’s
effective using ‘smart’ systems like internet and smartphone.”
population still used basic or feature
expatriates driving demand, digital —Elias Schulze, former Africa CEO, Kaymu.com phones, and presumably a sizable cashless payment systems or – Interview Participant
solutions are limited to high-income and advanced technological use such as (Startup)
fraction were low-income ‘walkers’. The
32 NAVIGATING NAIROBI UNDERSTANDING THE KENYAN MARKET FOR DIGITAL MOBILITY SERVICES 33APPENDIX 1 APPENDIX 2
DEFINITIONS AND ACRONYMS NAIROBI TRANSPORT
INFRASTRUCTURE PROJECTS
Definitions List of Acronyms and Abbreviations National Integrated Urban Nairobi Outer Ring Road The Uhuru Highway
Development Master Plan (NIUDMP)
Boda-boda AIDS Acquired Immunodeficiency Syndrome Major transport corridors linking with the Other major projects are under way.
APHRC African Population and Health Research Center Formulated in 2014 after 40 years of Thika highway, Mombasa Road and newly The Uhuru Highway, or Jomo Kenyatta
Motorcycle taxis that are able to weave
B2B Business-to-business operation under the policies and built by-passes; new bus and matatu International Airport-Rironi project
their way in and out of traffic. They
B2C Business-to-consumer guidelines of the Nairobi Metropolitan terminals and a network of metro railway includes construction of a highway
supplement the city’s public transport
CAK The Communication Authority of Kenya Growth Strategy, which was inaugurated lines are supposed to operate in the city overpass and southern bypass linking
vehicles. Known for their speed, boda-
CBD Central Business District in 1973, and updated in 1984-88, 1993 by 2030. The Nairobi Outer Ring Road, JKIA to metro Nairobi as part of a
boda rides typically cost more than
GDP Gross Domestic Product and 2000 (Urban Africa, 2014). The for example, which serves as a major 30-year concession to be financed by
matatu rides. Boda-bodas have been the
HIV Human Immunodeficiency Virus 2014 plan specifically addresses arterial road for the city’s northern and tolls (OBG, 2015).
cause of a large number of road
GOK Government of Kenya transportation challenges. It recognizes eastern districts, is set to be upgraded to
accidents due to rash driving and unsafe
ICT Information and Communications Technology the need to develop infrastructure and a dual carriageway, raising the road’s Lamu Port and Lamu-Southern
habits like overloading passengers.
ITDP Institute for Transportation and Development Policy new planning guidelines for a fast average journey speed of 12 km to 15 km Sudan-Ethiopia Transport
JICA Japan International Cooperation Agency urbanizing Nairobi. per hour. The project was expected to
Matatu The enacting of the Public-Private
JKIA Jomo Kenyatta International Airport start in October 2014 (OBG, 2015).
Partnership Act in 2013 opened the door
14 to 28-seater minibuses that are KES Kenyan Shilling Decentralization of
for private investors too to help develop
Nairobi’s main form of public transport— LAPPSET Lamu Port and Lamu-Southern Sudan-Ethiopia Transport Central Business District Southern Bypass
high-profile projects like Lamu Port and
similar to the danfos of Nigeria, peseros of MNC Multinational Corporation
The plan also states the need to Nairobi’s Southern Bypass, meanwhile, Lamu-Southern Sudan-Ethiopia
Mexico, otobis of Egypt, kombis of South NFC Near Field Communications
decentralize service from the Central is now expected to be opened to Transport (LAPPSET), the standard-
Africa, and brousse in Francophone Africa. NIUDMP Nairobi Integrated Urban Development Master Plan
Business District (CBD) to ease motorists in 2015. The project entails gauge railway project (OBG, 2015)..
NMT Non-Motorized Transport
They transport 70 percent of Nairobi’s congestion (JICA, 2014), which results construction of a 28.6-km international
OBG Oxford Business Group
daytime population (Ottichillo, 2010). from the time that Nairobi was first trunk road, running from Mombasa
PSV Public Sector Vehicle
Across the country, three million Kenyans settled as a colonial outpost. Roads then Road in southern Nairobi to Limuru Road
SME Small and Medium Enterprises
use matatus every day (Mutongi, 2006). were laid to radiate out from the CBD in Kikuyu Town. The KES 17.2 billion
SMS Short Messaging Service
The two billion industry (Nyasetia, 2013) which leads to traffic from all parts of (US $196.08 million) project was
SSA Sub-Saharan Africa
contributes five percent to Kenya’s Gross the city converging in one area and awarded to the China Roads and Bridge
TFT Technology for transport, or tech-for-transport
Domestic Product (World Bank, 2014) and creating bottlenecks. From an Corporation, a major player in Kenyan
TSA Transportation and Safety Authority
generates large-scale employment. It is investment viewpoint, the government infrastructure, in 2010 and was launched
UN United Nations
the largest indigenously grown enterprise has visibly expanded expenditure on in 2012 (OBG, 2015).
UNDP United Nations Development Programme
and the only major business that does not transportation construction.
rely on foreign aid or foreign aid workers.
Matatus have contributed tremendously to
The Michuki Rules The Mungiki
the socioeconomic well-being of Kenya
and become an integral part of its ethos John Michuki was the Minister of A complex gang that emerged in the
and cultural evolution. Transportation under President Mwai 1990s, and is known to extract
Kibaki and helped pass the increased “protection” fees from matatu owners,
National ICT Master Plan regulations in 2004 on PSVs. The number drivers and fare collectors to let them ply
of traffic fatalities did decrease after on their desired routes (Klopp, 2014).
Innovations in Nairobi whose value
implementation of the rules, however,
propositions are centered on improving
enforcement of regulations was short-lived
commute or goods delivery. They are
as fare prices drastically increased after
being launched in the market through both
the decrease in number of allowable
business-to-business (B2B) and business-
passengers on a matatu.
to-consumer (B2C) models.
34 NAVIGATING NAIROBI UNDERSTANDING THE KENYAN MARKET FOR DIGITAL MOBILITY SERVICES 35You can also read
