New licensing rules may lock out small matatu, bus owners

14-seater matatus. Draft regulations by the Transport ministry may act as an entry barrier to the fluid PSV business by locking out small entrepreneurs. FILE 

By Gerald Andae and David Herbling

In Summary

• New rules, to be gazetted later this month, restrict the issuance of public service vehicle (PSV) licences to companies that own at least five vans.
• The rules further require PSV operators to make public their fare tariffs and issue passengers with tickets.
• The new ‘Kamau’ rules, though fashioned to rein in the messy matatu sector, may act as an entry barrier to the fluid PSV business by locking out small entrepreneurs.hare

Kenya’s chaotic public transport system will have no individual investors when a new set of tough rules comes into effect later in the year.

The new rules, to be gazetted later this month, restrict the issuance of public service vehicle (PSV) licences to companies that own at least five vans.

The fresh set of regulations meant to reduce road carnage also demand that matatu and bus drivers be employed on permanent and pensionable terms complete with insurance cover, annual leave and scheduled shifts.

“A corporate body desirous of operating a PSV shall be the registered owner of a minimum of five serviceable vehicles,” reads a draft legal notice titled ‘Operation of PSV Regulations 2013’ and dated September 14.

The proposed rules, published by Transport secretary Michael Kamau, further require PSV operators to make public their fare tariffs and issue passengers with tickets. Long-distance operators would be required to maintain a travellers’ manifest for each journey.

The firms will also be required to comply with labour laws and regulations, including in respect to statutory deductions, health and safety of the workplace, Work Injury Benefit Act (WIBA) insurance, statutory leave days and written contracts of employment for staff.

An operator of vehicles under a franchising model or providing management services will be required to have at least 25 vehicles. Failure to observe any of the provisions would attract a fine of Sh100,000 or up to one year in jail.

‘Kamau’ rules

The new ‘Kamau’ rules, though fashioned to rein in the messy matatu sector, may act as an entry barrier to the fluid PSV business by locking out small entrepreneurs.

This means that the multi-billion-shilling matatu industry is likely to be dominated by established players such as KBS, Citi Hoppa, City Shuttle, Metro Trans, MOA Compliant, 2NK and Molo Line.

The regulations come with strict guidelines, especially for the owners of the PSV vehicles that are supposed to operate at night. 

Matatu Owners Association chairperson Simon Kimutai welcomed the proposed PSV code noting that many accidents have been caused by drivers who fall asleep while behind the steer wheel at night.

“Having driven for long hours, these drivers get exhausted and start dosing while driving, this is how they end up causing accidents,” said Mr Kimutai.

He said having two drivers on board will help reduce accidents that occur at night.

“The passengers might be required to pay more from the new move but this will be for the good of their safety,” he noted.