Over the past few weeks, there have been reports on attacks on Uber drivers in Kenya by independent taxi operators, whether the attackers are actual members of the Kenya Taxi Cab Association is yet to be established. The method largely deployed, as evidenced by communication shared widely on social channels, has been to lure the Uber service operators with a faux pickup request from the customer app and to then proceed to carry out their premeditated crime. Yesterday in a well publicized press briefing, the association promised mass action in days if Uber and its operatives are not hounded out of the market.
These independent operatives and also those under associations must wake up to the reality of disruption. Their current actions have them blind to the reality on the ground and they do not see what it is about these on-demand services that makes them appealing. It is not just that technology that makes them leaner and more efficient operations but the whole process of service delivery from selection, training, rating, customer and driver incentives, and customer service which are “offline” things. The standardization of expectation and service especially so for Uber has gone a long way in building customer confidence and driving uptake.
How should they really be looking at this?
The old dogs of industry (and I am not taking about those with radio call and dispatch centers) are probably seated on their hoods drinking a cup of hot porridge from mama tembeza (the roving tea or food lady…yet another model of on-demand services…hehehe) while reading the newspaper and waiting for me to walk over so they can say “Unajua wewe ndio umefungua bishara, hii change tutafanya aje” loosely translated to “You are my first customer today, and I don’t have loose cash for change. What shall we do?” when I reach my destination, after paying an exorbitant fee that if itemized would cover the porridge, the newspaper, today’s lunch and a hardship or better still lack of business allowance.
The tech that powers the on-demand economy is readily available and there are a number of companies that provide a blueprint, off which one can easily customize their own experience. The key areas covered by these blueprints are: resource allocation, matching, tracking, scheduling, notifications, payments, incentives and ratings, which are best build off a micro services architecture for seamless scale. For their numbers, incumbents should unlock a lower total cost of ownership that then deals with their technology crutch. Cities like Chicago are trying to get all their 12,700 licensed taxi drivers onto one of two pre-selected on demand apps – Arro or Verifone’s Curb.
Who said that only people need to be moved from point A to point B? There are so many other segments that can be opened up by leveraging technology and on ground numbers that would make good use of all the inventory available on their network. Uber rebranded less than 48 hours ago signaling the deliberate diversification of their business into a vast number of new segments while honoring the cultures of some of the countries where they operate. The convergence of “the bit” and “the atom” driving this new look.
What good is an association if it can not deliver tangible business value for its membership? Better negotiating power is a no brainer! Instead of crying foul that their current vehicles do not make the cut for a third party service, how about exploring a deal with a local assembler and financier to ensure members access new cars under lease or purchase scheme? Easy Taxi is getting its driver’s access to Ksh. 1 billion for vehicle upgrades averaging Ksh 1 million with payments deductible from daily collections. They have also locked down a Ksh. 4 discount on petrol pump price per liter plus access to other services at all Total stations.
Our business model is unique in the sense that it encourages our drivers to become digital entrepreneurs. By offering them this facility, we empower them to harness their entrepreneurship opportunities and increase their capacity by using modern technology in streamlining the transport sector in Kenya.We enable our drivers not only digitize & professionalize their trade, but also enhance credibility among both our corporate and individual clients – Paul Ndichu , Easy Taxi Kenya – Managing Director/CEO
MaraMoja, a local player in the same space has shown that there is more than one way to play this game, leveraging trusted social networks to position driver recommendations. This means other towns are open for business too! The model publicized by Uber and Easy Taxi are not cast in stone and can be evolved to get market fit and ecosystem balance.
At its most basic, idle time and not taxes is what drives up unit costs for the traditional players, you make money when in motion and just like in the matatu industry, the number of “squads” (full transit circuits) made actually forms part of the KPI . At the end of the day, the customer makes the choice. The on demand economy is here and ride hailing + ride sharing ecosystems are just the start of it, incumbent taxi associations and indie drivers are best advised to adapt or die.