New law on technology to transform PSV sector

PHOTO | FILE An Umoinner Sacco bus that offers BebaPay services. The government has directed all PSV owners to implement cashless payment systems by July.  NATION

In Summary

• Already, various firms have shown interest in the sector after the government published a directive requiring matatu owners implement a cashless payment system before July.
• The move has sparked a competition war with BebaPay, a product from Equity Bank and Google that was introduced in April 2013.

By John Njiru
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The public transport sector is set for a major overhaul as stakeholders move to adopt technology that is expected to restore sanity on the roads.

Already, various firms have shown interest in the sector after the government published a directive requiring matatu owners implement a cashless payment system before July.

According to a legal notice titled National Transport and Safety Authority (Operation of Public Service Vehicles), public service vehicles owners will also have to ensure they have a fleet management system and instil digital speed governors “to avoid human indiscretion and promote riddance of corruption on our roads”.

“We will achieve geo-fencing and reduce incidents of speeding because the system, which will record speed and location of a vehicle, will be available to us at any time. We don’t have to be there physically with the drivers, but we will know every time they will be speeding,” NTSA chairman Lee Kinyanjui said by phone.

Safaricom has already registered 1,300 public service vehicles (PSVs) on its Lipa na MPesa platform as it seeks to tap into the Sh205 billion-a-year industry, according to the 2013 Economic Survey.

SCRAPE CASH PAYMENTS

“We are confident that it will be accepted within the public transport sector as an alternative channel to direct cash payments,” said Nzioka Waita, the telco’s corporate affairs director.

The move has sparked a competition war with BebaPay, a product from Equity Bank and Google that was introduced in April 2013.

Google’s East and Francophone Africa communications manager Dorothy Ooko said more than 50 bus companies have adopted the payment mode since inception.

“The National Transport and Safety Authority require that all vehicles belong to a sacco or company and they own a minimum of 30 serviceable vehicles. So when we talk of bus companies, we are talking of many buses,” she said in an e-mail interview.

In the last few months commuters who have embraced the tap-to-pay technology have witnessed resistance by conductors who insist on cash.

The reason is that with cash, the bus crew can conveniently buy their way out of traffic offences and put away a portion of the daily take for themselves.

The Transport ministry plans to achieve three-pronged success with the implementation of technology services on PSVs: reduce corruption between drivers and policemen, formalise the sector to benefit the Kenya Revenue Authority with much-needed tax, and bring sanity to Kenya’s flawed transport system.

Safaricom has also introduced the Vuma Online initiative and has registered more than 1,500 PSVs in less than five months against an original target of 350 vehicles.

The Sh7 million wi-fi initiative was introduced to allow passengers access to free Internet.

“With such interest, we have reviewed our target and are now targeting 5,000 vehicles by the end March 2014.

“One of the ways we intend to achieve this is to bring on board the saccos, who administer large fleets of PSVs,” Mr Waita said.

The International Business Machines corporation (IBM), in its 2011 Commuter Pain Index, placed Nairobi fourth globally in time lost in traffic jams.

There are over 22,000 public transport vehicles in the country used by about 1.5 million passengers daily, according to estimates by Standard Investment Bank research, which offer an attractive opportunity for interested firms to broaden their technology products.

Other technology advancements will include CCTV cameras in buses and matatus as a security measure in the wake of increased muggings and terrorism activities on or in PSVs.