Entrepreneurship Zone: 25 October 2022 :: Identifying a business opportunity in Kampala’s inefficient transport system

Tue Oct 25 09:20:30 CAT 2022

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Entrepreneurship Zone: 25 October 2022 ::  Identifying a business opportunity in Kampala’s inefficient transport system

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Tom Collins speaks to Andrew Lema, co-founder and CEO of minibus ridesharing service Easy Matatu.

When Andrew Lema used to take a local bus known as a ‘matatu’ to work in central Kampala, the journey would take almost twice as long as if he travelled in a car.

The old buses, often crammed full of people, would make erratic stops as the driver picked up other commuters on the way to the centre of Uganda’s busy capital.

On one of these journeys, Lema and two friends decided to create a company called Easy Matatu to make transport simpler for local commuters. “We were seated in the back of a matatu and thinking about innovation in Uganda. What struck us was that nothing has happened in the matatu space. We are still using these banged-up, unsafe and unreliable matatus. And that’s what sparked the idea.”

Turning a problem into a business

The concept is simple: users book rides on buses via an app, which allows the drivers to make pre-determined stops and enables clients to pre-book a ride. The clients can request a ride from anywhere, provided it is already on a given route. The start-up takes a cut from each ride booked on the app and the prices are roughly the same as normal matatus.

The company uses data and analytics to create optimised routes that increase efficiency.

Easy Matatu’s vehicles are refurbished and well-maintained, while some even come with refreshments and wifi. It does not own the buses. Rather, it works with existing matatu owners and drivers.

Lema says this was perhaps the biggest initial hurdle; encouraging users and drivers to download the app. The matatu industry is historically a very traditional sector and many of the drivers are sceptical about the benefits of using the service.

“It really was an issue at the beginning. We faced quite significant pushback. Many of them saw us as competitors or government agents. They suspected we were looking to eliminate them from the sector.”

The CEO reveals Easy Matatu overcame this by showing the drivers the benefits of using the service. “Their income fluctuates; a lot of them live hand to mouth. What we were offering was a better way to work, a more consistent income.”

Lema confides that one of their primary challenges is “working with often mistrustful and undereducated informal drivers”. This means the company must invest in training and incentive programmes to reform driver behaviour.

The service is available through a smartphone app and feature-phone-friendly short codes, appealing to users from various socio-economic backgrounds.

Launched in 2019, the start-up has logged more than 100,000 rides.

In terms of finding talent to develop Easy Matatu’s tech platform, Lema has taken the approach of hiring promising techies and developing them from the ground up. “I have the advantage of a software engineering background, which has helped me source talent. For most people it’s not an easy thing, but I have been able to grow talent; we don’t employ them when they are very expensive but when they are younger and more affordable.”

Easy Matatu now has more than 20 staff and it is looking to expand over the next few years.

Expansion plans

So far, the company has been funded mainly by convertible debt and grant funding but the founders are looking to raise venture capital next year to expand into other markets. They are currently looking at neighbouring East African markets like Kenya but also less developed countries like Senegal and others in West Africa.

“Dakar has always been very interesting for me,” Lema says. “There are loads of opportunities in West Africa.” The city’s tech-enabled transport options remain limited with regular taxis and buses dominating the sector. Although there are app-enabled ride-hailing services, large companies like Uber and Bolt are yet to enter the Senegalese market, signalling potential for first movers.

Despite the lack of competition in the Ugandan marketplace, there are equivalents like Kenya-based Little and Egypt-founded Swvl that are active in other African markets.

Lema expects the demand for app-enabled services – particularly in terms of transport – to increase as smartphone penetration makes steady yearly gains across the continent.

A commuter gets onto an Easy Matatu minibus.

-      Howwemadeitinafrica

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