Five Public services vehicles (PSV) Savings and Credit Co-operative Societies (SACCOs) with more than 250 vehicles plying Nairobi’s Jogoo road route have tied with technology company Fibre Space Ltd to use its cash-light fare system known as‘MY1963’ to end cash payments for Matatu fares. ROG SACCO leading the way, saying it will refuse to accept cash fares from the first day of February 2015.
The change to impose the cash-light fare system is as result of revenue losses that owners say amount to over 30 per cent of their daily earnings.
The owners claim the government’s relaxation on the implementation of the cash-light system. It has pushed them to self-implement, in a campaign that is now targeting over 100,000 passengers on one of the busiest roads in the city, blaming SACCOs for not being ready to embrace fare payment technology.
In a bid to return order to the matatu business and blend the PSV operations with estimated $2bn revenue, the government last year introduced a raft of measures including moving all matatus into SACCOs and switching to cashless payments to increase transparency and reduce cases of corruption on the roads.
The government of Kenya has cited Corruption as the biggest culprit in the flouting of traffic rules and, ultimately, deaths on Kenyan roads.
However, the cashless switchover has been moving in a slow pace, with government’s initial deadline of July extended by six months to December 2014. The second deadline, adoption has been minimal and the government has gone slow on implementation.
Now matatu owners through big SACCOs along the Jogoo Road route, after a series of meetings cited continued losses of income have decided to quicken the cash-light system enforcement, in partnership with technology company Fiber Space, using ‘MY1963’ card.
“The matatu owners, we have provided point of sale terminals and technical support to approached us to work together to fast track adoption of the cards by passengers, since the owners were still recording losses of revenue on their vehicles,” said Mr. Mwakio Ngale, General Manager of Fiber Space Limited.
The five SACCOs, with some of the largest fleets along the Jogoo Road route, include Ummoiner with 100 matatus, Cibet with 40, Compliant with 40, ROG with 38, and Oma with 32.
Under the partnership, More than 40 youth selling the ‘MY1963’ cards, were employed since Monday last week, during rush hours at selected bus terminals in Nairobi, including the Ronald Ngala where the Ummoiner SACCO bus stationed.
Mwakio says that while matatu owners fully understand the need for the cash-light fare system, majority of passengers are still shy from embracing them due to limited information. He added that with the partnership their activators would be in bus terminals explaining the details to passengers.
Campaign is targeting Nairobi’s working class along Jogoo road, students, estate traders, and mama mbogas (women selling vegetables), who are first to use matatus from the estates to city markets like Wakulima Market, where they buy the produce to later sell to dwellers of estates along Jogoo Road.
The card sellers, well known as activators, start by giving the passengers the cards free of charge, then explain to them how the card works through the self-care option They also give additional leaflets. Registration of the card is free with passengers needing only a national identification card (ID), a valid phone number and date of birth information to create individual accounts. Users are then able to load money through M-PESA at no additional cost, thanks to a partnership with Safaricom.
“This creates a smooth flow of the entire system. While we have offered the technical support to the matatu operators through training their members, making sure that the gadgets are available and back end systems are tested and working, it follows naturally that the next thing is to target the passengers with sensitization, which is what this entire week is about,” said Mwakio.
While the SACCOs use the exercise to test the waters on the adoption of the cards, some, like ROG, standing for River of God and led by young men below 30 years are taking cash-light fare system seriously. They have set up the first day of February 2015, as the last day any of their matatus will receive any cash payment from any passenger. They will automatically go fully cash-light.
A one-year-old SACCO whose matatus ply CBD through Jogoo Road via Landhes Road into Bahati Estate, Kimathi, Jerusalem, Uhuru, Buruburu phase 1, Outer Ring and Civil Servants Estate insists that it would rather lose passengers than remain stuck in the age-old cash system.
“The emerging trend where Matatu owners are taking it upon themselves to accelerate adoption of the cards without waiting for government means that the switchover will be fast, smooth and definitely a new job creating platform,” said Mwakio.
The ‘MY1963’ card, gives passengers loyalty points to get free fares and offers fare credit facilities, has created over 2,000 jobs in distributing the cards. It is also seeing both drivers and touts put onto formal salaries, with health benefits and credit facilities.