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SafeBoda’s Kenya exit is deeper than Covid

SafeBoda’s Kenya exit is deeper than Covid
By get.Africa Weekly • Issue #46 • View online
Habari za asubuhi,
That’s “good morning” in Swahili
Nairobi is notorious for its traffic jams, locals often joke that travelling from the airport to the city centre takes longer than travelling from Kenya to a foreign country.
Personally, I haven’t experienced those killer traffic jams. My stays in the city, so far, have been long enough to witness the mayhem but short enough to not get too involved.
One thing that I got to understand fairly quickly though is that, sometimes, the quickest way to get from point A to point B is on 2-wheels. 
For a motorbike taxi startup, that right there is the problem statement for a business case. And as long as Nairobi’s streets remain congested, it’s one that will continue to remain compelling. 
Crowded field
In the short-term, however, things aren’t looking good for the mobility ecosystem
Lockdowns and curfews have restricted movement, and in early November, the authorities announced a fresh set of measures aimed at controlling the spread of Covid-19.
One way to appreciate just how impactful these measures have been on the ecosystem is through the reduction in air pollution. At one point, the air in Nairobi had gotten so clear that people reported being able to spot Mount Kenya from the city; the mountain is some 85 miles away.
That’s why when news that SafeBoda was “pausing” its Kenya operations broke, it didn’t come as a complete surprise. 
However, the company blaming all of its misfortunes on Covid doesn’t seem to tell the complete story.
Since SafeBoda entered the Kenyan market about 2 years ago, it has seen the emergence of competitors such as UberBODA, Bolt boda and Juu boda.
When compared side-by-side, SafeBoda had first-mover advantage and regional expertise, but its biggest competitors offered something that they didn’t, and that’s an alternative to motorbike rides. 
As a result, and it’s just my hunch, those companies seemed to be significantly more de-risked than SafeBoda. So by the time the movement restrictions came in, the bottom lines of each of them were affected unevenly.
Race to the bottom 
SafeBoda and its competitors have been using aggressive discounts to fight for market share, but their battles have come at the expense of the rider community; what’s that thing they say about elephants fighting and the grass suffering?
This, in turn, created friction between SafeBoda and its riders, so when the company lowered their bonuses last year, the riders protested. 
The company also tried to incentivize payments through its wallet feature, but that hasn’t proven to be as popular with riders as it has been with customers.
In recent months, some of the men and women in orange helmets have registered their displeasure with these developments by staging something of a mutiny — using the app to get passengers but collecting payments in cash outside the app thereby cutting out SafeBoda, whilst avoiding passengers whose preference is to pay with the company’s wallet feature.
This, undoubtedly, took its toll on the business.
It is worth noting that this type of rider behavior was going on before the lockdowns. 
It is also worth noting that this friction isn’t limited to SafeBoda, it afflicts nearly all ride-hailing companies, not just in Kenya but in Africa as a whole.
The potential for rider friction of this kind is so high that it must be highlighted as a significant business risk in any business case, no matter how compelling. Sometimes, the elephants suffer too.
SafeBoda says they’ll focus on Uganda and Nigeria going forward. Whatever lesson they’ve picked up from Kenya, you hope it serves them well in the future. Read more.

get.Africa is a weekly roundup of the most interesting stories in African tech. To support, follow us on Twitter, subscribe to our YouTube channel, share this issue or send us an email. You can also check our archives.
Photo by Len D. C.
Photo by Len D. C.
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Overheard on Twitter
I think there are two challenges with ride-hailing in Africa.

1. Drivers are squeezed in pricing to entice riders.
2. Allowing drivers to take cash & pay the company later puts them in debt. Recovery is done on the next cashless trip, they feel cheated when the co collects.
+ To make whiteboard animation videos like this for educational or marketing purposes, please send us an email.
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