How Boda Boda Runners Earn Sh1 Billion Every Day

Economy

How Boda Boda Runners Earn Sh1 Billion Every Day


The boda boda sector provides one million direct jobs to cyclists who earn 1 billion shillings a day. FILE PHOTO | NMG

charlesmwaniki_img

Summary

  • C&G estimates that each cyclist earns an average of 1,000 shillings per day from an average of 15 rides, which translates to a daily income of 1 billion shillings or 365 billion shillings per year for the million of them. .
  • The Treasury also collects about 60 billion shillings a year in fuel taxes from the boda bodas, which consume an average of 300 shillings worth of gasoline each per day.
  • The motorcycle industry was thrown into the spotlight this week after bikers assaulted a motorist on Nairobi’s Wangari Maathai Road.

The boda boda sector provides one million direct jobs to motorcyclists who earn 1 billion shillings a day, according to a new study, highlighting the importance of the motorcycling sector to Kenya’s economy amid a crackdown in nationwide against operators for lack of discipline.

A study of the sector by the listed company Car & General (C&G) #ticker:CGEN – which sells motorcycles, their parts and other engineering equipment – shows that it also indirectly supports six million means of subsistence, about 10% of the country’s population.

C&G estimates that each cyclist earns an average of 1,000 shillings per day from an average of 15 rides, which translates to a daily income of 1 billion shillings or 365 billion shillings per year for the million of them. .

This is equivalent to 3.4% of GDP and almost matches the output of Kenya’s education sector, which contributes 3.8% to GDP.

The Treasury also collects about 60 billion shillings a year in fuel taxes from the boda bodas, which consume an average of 300 shillings worth of gasoline each per day.

This translates to 300 million shillings of fuel every day, of which around 163 million shillings goes to the government in the form of taxes, levies and other charges.

“There are 1.2 million cyclists in Kenya. Nine out of 10 are used for commercial purposes, which represents more than a million jobs created. Seventy-five percent are youth and six percent are women,” the C&G report said.

The motorcycle industry was thrown into the spotlight this week after bikers assaulted a motorist on Wangari Maathai Road (formerly Forest Road) in Nairobi, sparking widespread condemnation of the so-called boda boda threat.

Widely circulated video of the incident shows the woman screaming for help as she was stripped and groped. There have been arrests, convictions and calls for stricter regulation of the boda boda sector.

President Uhuru Kenyatta on Tuesday ordered a crackdown on all boda boda operators nationwide. Operators were given 60 days to obtain smart licenses and join registered saccos, which in turn will be required to maintain a digital register of their members for easier identification.

Experts support calls for stronger regulation of boda bodas, arguing that the sector has become too important economically to be left in the hands of unruly operators.

“Because of this behavior of the boda boda guys, there is good reason to come up with regulation, not necessarily using the police but rather based on economic fundamentals so that we can make the sector more competitive, efficient and responsive to the goal,” said Professor XN Iraki, an economist at the University of Nairobi.

“There are two approaches to use. The first is self-regulation by the operators themselves and the second is normal government oversight, both of which avoid stifling the industry.

The push for stricter regulations has come amid rapid growth in motorcycle registrations and increased use on public transport.

Official data shows that annual registrations have doubled over the past five years to 252,601 from 123,539 new registrations in 2016.

Motorbikes are quite affordable, selling for between 65,000 and 130 shillings, allowing many young people to acquire them for business.

The increased demand for bicycles has also attracted several companies which have set up assembly plants in Nairobi and Mombasa for completely knocked down imported units.

Apart from the popular TVS, other models on Kenyan roads are Honda from Japan, brands from Indian company Bajaj such as Boxer, Yamaha from Toyota Kenya as well as a myriad of low cost Chinese brands.

Motorcycle taxi companies like Bolt are growing in Kenya with backing from investors betting that the meteoric rise of two-wheel taxi companies in Asia can be replicated in some of the fastest growing economies in the world.

The idea of ​​booking a motorbike taxi through a company that has trained drivers and provides helmets to passengers appeals to some commuters in Kenyan cities, especially Nairobi.

Kenya, like most African countries, offers huge potential for motorcycle transport businesses due to the low number of personal car owners, rapidly expanding population and lack of efficient mass transport systems. in rapidly growing cities.

While informal motorcycle taxis have been around for years, new companies are hoping to gain market share by offering trained, responsible drivers and the convenience of booking rides through a mobile app.

According to Professor Iraki, the sector is now ripe for formalization because of the large multiplier effect it has on job creation.

“We need to broaden the thinking around boda bodas where, for example, investment in assembly would have a massive effect on manufacturing. We should be looking at improving the skills of riders, making bikes and making parts spares, etc,” he said.

[email protected]

Comments are closed.