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Ride-hailing startups like SafeBoda and Easy Matatu are changing the semi-informal transport ecosystems. But can the platform effect bring order and healthy profits to a chaotic commuter system?
How Uganda became Africa’s digital transport hub
It was only my second day in Kampala when I witnessed a commercial motorcyclist and his passenger swerve off the road near a busy city junction and tumble, almost in slow motion, into a street stall selling mobile phone cards. Fortunately, no one appeared hurt as they both quickly got up and brushed themselves down.
What was perhaps most surprising is that I only saw this one crash, given the sheer number of motorcycles — known locally as boda boda – which traverse Kampala’s congested roads — many times going in the wrong direction on busy streets. Depending on who you speak to, there’s anywhere between 800,000 to 1.2 million boda bodas in Uganda. It’s easy to believe, as they seemed to fill every crevice of traffic and side roads in this city of 3 million.
The flourishing boda boda sector explains why even though Uganda’s local tech ecosystem is much smaller than neighboring Kenya’s, Kampala is a bit of a niche as a test bed for digitizing public transport services with motorbikes and matatus (buses) among Africa’s tech ecosystems.
Since the mid-1990s, the East African country has seen the boda boda industry swell to become one of the most important employers of young men between the ages of 21 and 35, after agriculture. It has also led to a large informal economy and ecosystem, which is estimated to account for anywhere between 5% to 15% of the national GDP. Most of the bikes are imported from India, and dominated by two brands: TVS and Bajaj.
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SafeBoda has been at the forefront of the push to digitize the mostly semi-informal transport ecosystems in most of Africa’s large cities. Launched in 2015, it set out to convert thousands of Kampala’s Boda Boda riders onto one digital platform, with a largely similar model to the ride-hailing models launched earlier in the West, but with motorcycles. At its peak, it had 25,000 drivers registered. As the name suggests, one of its unique early selling points was safety. By promising well-trained drivers, enforcing helmets to be worn, and registering drivers and their identities, it provided a new layer of security and safety that was absent from the predominantly informal and chaotic market.
But even before SafeBoda, there was Tugende, an asset finance startup that launched in 2012, and has funded about 65,000 transactions. It’s the core product: a lease-to-own package for motorcycle taxi drivers in Uganda and Kenya. Tugende has raised over $50 million in equity and debt financing since the launch.
SafeBoda and Tugende’s early moves have encouraged different types of tech startups in sectors like fintech and agritech, but also others in the mobility space. “There’s been a lot of interest from investors in the space,” SafeBoda co-founder Ricky Papa Thomson told me in a meeting. “People want to succeed where others are succeeding.”
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