For decades, Uganda’s transport system has been so informal and a chaotic experience for most commuters especially those working in the busy central business district of Kampala and nearby territories such as Entebbe, Mukono and Wakiso.
Not until recent years, that ride-hailing apps such as SafeBoda, Uber, Taxify and Easy Matatu sprung into existence. These and several other online transport-focused solutions are slowly but surely transforming the transport sector in Uganda – to the benefit of the millions of passengers.
The combined effect of these multiple digital platforms is massive and is revolutionizing the entire transport sector by creating new employment opportunities for drivers and riders that never existed before.
The average number of commercial commuter riders in Uganda is between 800,000 to 1.2 million boda bodas. These are dominantly congested in the Kampala city all targeting the bustling urban population of 3 million who earn a living in the central business district and the nearby trading centres.
These prominent commercial riders who are spread out everywhere in city centres begun in the mid-1990s. But at the turn of the century, more boda boda riders embraced this lucrative trade which has since swollen to become one of the key employers of youths mostly consisting of young men aged between 21 to 35, this sector is only rivalled by the agriculture sector which is the backbone of the country.
These rising numbers have led to a large informal economy and ecosystem, which is estimated to account for about between 5% to 15% of the national Gross Domestic Product.
The majority of the motorcycles that commercial transporters rely on for their daily bread majorly are imported from India, and the two most popular brands are Bajaj and TVS.
Kampala’s booming boda-boda sector explains why it is the poster city despite Uganda’s local tech ecosystem being much smaller than neighbouring Kenya’s. Kampala has emerged as a forte and as a reliable testing zone for digitizing public transport services with motorbikes and commuter taxis as well as buses which other tech players across Africa can emulate and replicate to suit their countries.
One of the topmost tech players in Uganda’s transport sector, Safeboda has been a pivotal force in the country’s efforts to digitize the informal transport ecosystem as is the trend across the rest of the continent in Africa.
Safeboda was launched in 2015. After its emergence on the market, its mission was to convert the multitudes of Kampala’s boda boda riders and pool them into one digital platform under their guidance.
Safeboda’s app is quite similar to the ride-hailing models that were launched earlier in other parts of the world like Uber, only championed by motorcycles as opposed to cars.
During its peak, Safeboda had enrolled 25,000 drivers or riders under its digital wings. In conformity to its brand name, the app’s unique selling point during its early days of inception was safety – and still is the app’s alluring factor until present day.
The app’s promise to its mostly corporate passengers or market base is their ability to supply professionally-trained riders. Safeboda goes an extra mile to enforce the wearing of helmets by all their riders or drivers as a safety measure aimed at reducing accidents that are synonymous with bodaboda riders in Kampala and Uganda at large.
Ricky Rapa Thompson, Safeboda’s co-founder also emphasises that their company makes an effort to register all their drivers and has built a database to manage their riders’ identities which helps in curbing crime and following up on their wellbeing in case of an accident.
“This also provides a new layer of security and safety that was initially absent from the predominantly informal and chaotic market,” says Ricky whose company recently added safecar to their offering – a digital solution on 4 wheels.
Yinka Adegoke in his journal titled How Uganda became Africa’s digital transport hub intimates that, “even before SafeBoda, there was Tugende, which is an asset finance enterprise that was launched in 2012.
Since its inception, Tugende has funded about 65,000 transactions. With its core product being a lease-to-own package for motorcycle taxi drivers in both Kenya and Uganda.
Tugende has singlehandedly raised over $50 million in equity and debt financing since it was launched.
The efforts by the two tech players in Uganda’s transport system, Tugende and SafeBoda have inspired multiple others to join the thriving industry with several tech startups cropping up in other sectors such as agriculture technology as well as financial technology or fintechs like Xente, others innovators have since emerged in the mobility industry.
“There’s been a lot of interest from investors in the tech space, People want to succeed where others are succeeding,” says SafeBoda co-founder Rapa.
According to Tom Courtright, a transportation researcher who specializes in East Africa, SafeBoda has helped raise awareness about Uganda’s tech potential.
“SafeBoda definitely had a real role to play in the local ecosystem development with drivers, technicians, and engineers, some of whom have gone on to join Google and others,” says Tom adding that:
“They put Uganda on the map for investor types and that helped spur money going into other start-ups.”
Ricky in an interview with Adegoke admits that “succeeding” hasn’t quite been the story for the last two years for the boda boda sector.
During the peak of Covid-19, Uganda had imposed a lengthy lockdown which is arguably one of Africa’s toughest measures in a bid to curb the global pandemic. It lasted for close to two years almost 24 months of no economic activity – this was among the most trying moments for most of these commercial motorcycle riders who earn on a daily basis to sustain their livelihood.
The toughest measure that hurt the boda boda operators, among the presidential directives was the traffic rule, “to prevent boda bodas from carrying passengers.”
“The economy was already struggling before Covid-19 and then it got a lot worse,” said Michael Wilkerson, founder of Tugende.
In the earlier days of the lockdown, Tugende was put in a precarious position of having to support its drivers who couldn’t earn a living, by sending Shs25,000 which is approximately $6.50 to each driver or rider to help them survive through that tough season, this enabled most of their affiliated riders to buy food and other vital supplies that can sustain life.
According to Wilkerson, this was a tough time for the company, as some of those drivers were unable to make the regular (daily or weekly) loan repayments on their motorcycles.
But even the president lifted most of the lockdown restrictions, another mega challenge emerged in the form of inflation, which has pushed fuel prices up to nearly 85% of the original pump price.
“Our customers are at the bleeding edge of the economic downturn here,” says Wilkerson.
But the adage goes, every cloud has a silver lining, As was the case in most parts of Africa, the covid-19 imposed lockdown definitely fast-tracked the use of digital services, and as Yinka Adegoke from Rest of World has reported, as a result of this emerging global trend, SafeBoda quickly added more services to it’s menu including food delivery services, airtime purchase, cashless payments, mobile money transactions, and a savings scheme in which users are offered 10% annual interest on their savings.
In tune with the above trend, Tugende, which had originally started out by providing motorcycle financing, has come of age and has adopted more services to broaden its options to its customers.
Tugende now offers a wider range of asset financing options which includes insurance products, refrigerators, boat financing.
“We didn’t plan to go this route yet, but the situation forced this,” said Ricky, referring to Safeboda’s “super app” strategy. “Even the giants in the U.S. and elsewhere haven’t been able to make profits from ride-hailing.” Rapa says that SafeBoda’s revenue diversification strategy is strengthened by developing its own mobile money ecosystem to encourage cashless transactions.
Analysts such as Adegoke suggest that there’s still hope that digital platforms can help disrupt or, in fact, do the opposite, by helping organize and aggregate the semi-formal, privately-run public transportation options in fast-growing African urban areas.
Another tech enterprise, known as Easy Matatu, is a start-up that has been in existence for the past three years, Easy Matatu is attempting to accomplish that with a simple app which enables suburban passengers to book a seat on a local 14-seater bus (which dominate Uganda’s transport sector) that operate daily commutes to and from the busy city of Kampala.
Andrew Lema the co-founder admits that after starting out, he and his team soon realized that digitizing the service might have been the easiest part of launching their service.
Lema says that, “We had to convince both bus drivers and their bus owners to work with us, because they initially saw us as competitors,” Lema narrated to Adegoke adding that. “It took time to win them over,” Lema notes, referring to the challenges tech start-ups in the transport sector tend to encounter in digitizing this space.
But with the passage of time, these stakeholders in the transport sector eventually began to see the advantages to being able to operate their commercial passenger vans otherwise known as matatus with much more efficiency and as such began to embrace the digital solution.
“Before now, drivers were mostly working with their intuition about where and when to run their routes but we have the data for them.” They’ve even been able to create new routes, said Lema.
Lema is now working on closing EasyMatatu’s seed funding round.
It is an emerging trend in Uganda that most of the technological innovation and digital transport solutions are mostly focused on two-wheeled vehicles (motorcyles) as opposed to those on four wheels.
Uganda’s mobility sector has been hit hard by inflation as well as other global effects one key concern in recent times has been how to help build a greener transportation ecosystem, this has been further accelerated by the rising fuel costs in the country.
After having been in existence for 4 years, a start-up known as Zembo, recently partnered with riders on Safeboda.
In November 2021, Zembo recently raised $3.4 million from Toyota and CFAO Group’s Mobility 54 Investment, DOB Equity, and InfraCo Africa.
Zembo is gaining an impressive reputation. The company majorly sells electric motorcycles through its lease-to-own program.
Daniel Dreher, Zembo’s co-founder says the company currently imports the motorcycle bodies from India, and the company relies on China for its electric battery systems.
According to Adegoke who recently visited Uganda from rest of the world, “They assemble the motorcycles at the small factory I visited on the outskirts of the city, where they also refurbish electric batteries for the bikes. The start-up has built a network of solar-charging and battery-swapping stations spread through Kampala and neighbouring towns, as it strives to fully earn its “green” credentials.”
Dreher, the company’s director, says Zembo has had struggles in recent times, which emanate from the problems in the supply chain – particularly out of China. “It has been a big problem,” Dreher acknowledges.
Uber and Taxify have also had an impact on Uganda’s transport ecosystem.
Uber set up shop in Uganda in June 2016, with its UberX product in Kampala and Entebbe.
By November 2017, Uber had created over 1,000 jobs and other economic opportunities, the app had 38,000 unique users on its platform per month.
According to techjaja, “Uber has created over 1,000 economic opportunities in Uganda and registered over 48,000 riders. Of these, 38,000 are unique monthly users meaning this total at least use the app every month. Majority of the Uber drivers are 9 – 5 Jobbers according to statistic and of these, 14% are women while 8 are disabled,” the publication was quoted as saying in 2017.
Among those who see the traffic on the Uber platform include; hotels, shopping malls, bars and eateries these include Acacia Mall, Village Mall Bugolobi, Kampala Serena, Sheraton Kampala, Panamera Bar, Bubbles O’Leary among others and the peak traffic hour is 12:00 AM in the morning on Fridays and Saturdays.
Jane Kemboi Uber’s Communications Manager in charge of East Africa when asked about other pressing issues like rider safety, privacy, tax compliance, payment modes, said the app has an in-app solution to address the above concerns.
With Uber, riders can easily report erratic behaviour that they incur on the road such as bad driving, harassment or any misconduct using this feature, the tech company also vets the drivers before they are allowed to join this platform.
Kemboi says Uber’s payment modes are “non-discriminatory in that they accept all payment modes” ranging from cards to hard cash. Uber drivers found in breach of this are always penalized for their actions.
She reveals that Uber is tax compliant with all parties manning transportation, taxation, labour, among others, locally while the contractual obligations between Uber and its driver partners are addressed by Uber BV in the Netherlands which is the tech firm’s parent company which oversees their global operations.
According to Kemboi, Uber drivers are actually contractors and not employees as has been heard in various circles. In other words, these are self-employed workers who can can choose when to opt or out of the ride-hailing platform as they deem fit.
Uber’s future vision incorporates greener cities and driverless cars through the use of its services/products. On a global scale, UberPool has significantly reduced congestion and traffic jam in cities across United States of America such as San Francisco and its future plans of introducing drive-less cars.
On a national level, Uber’s future plans include possibilities of expanding beyond Kampala and Entebbe but first they have to optimize their services where they are operational.