Ugandan Bicycle Service, SafeBoda announced the cessation of operations in Kenya from November 27, 2020.
In an official statement released via the company’s Twitter account, Safeboda revealed that its operations in Kenya have been limited by the economic impact of the COVID-19 pandemic in the country.
As Nairobi experiences an economic recovery from COVID-19, boda transport has been hit hard. This means that our business cannot operate sustainably in this environment and, unfortunately, the timeline for a full recovery is uncertain.
“This decision is difficult for SafeBoda to take. We know this will have a negative impact on our community of boda boda drivers, ”the statement said.
Kenya’s exit from SafeBoda comes after two years of activity in the country. The cycle tourism start-up was launched in this East African country in 2018, carrying more than 4,000 bodas and performing millions of rides.
The company has advised Kenyan customers to use up their remaining wallet balances when booking travel or delivering packages by November 26. However, SafeBoda said it will send unused wallet balances to customers. M-Pesa accounts.
Was COVID-19 Really Responsible for SafeBoda’s Release?
SafeBoda explained that his decision to leave Kenya was prompted by a hostile business climate following the COVID-19 pandemic. While this may have played its part, there are other reasons that could have forced the decision.
In early November, Kenyan authorities reimposed COVID-19 measures. This was after Kenya saw an upsurge in COVID-19 cases weeks after the initial lockdown measures were relaxed. In October alone, health officials reported 19,000 cases – half of the 38,000 cases recorded between March and September.
Although government measures may have restricted movement due to the ban on public gatherings and the application of a nighttime curfew, no lockdown has yet been imposed. SafeBoda could easily work, since it is still Nigeria and Uganda where COVID-19 is also present.
It appears the email company has not been able to generate sufficient revenue from its operations in Kenya to continue operating after COVID-19.
According to the Kenya Motorcycle Assemblers Association, there are nearly one million motorcycle operators across Kenya. This shows the scale of the Kenyan boda boda industry, therefore drawing closer scrutiny to the initiative behind the release of SafeBoda.
SafeBoda Kenya failed to replicate Ugandan success
SafeBoda appears to have been unable to meet the transport needs of a large part of motorcyclists in Kenya for two years, as it did in Uganda. Although the platform claims to have performed millions of rides, the Kenyan boda boda market is populated by several competitors including UberBODA, Bolt boda and Juu boda, which are said to have drastically reduced SafeBoda’s market share.
In Uganda, SafeBoda is a household name when it comes to making bicycle calls. With nearly 10,000 drivers on board, the company has been able to gain a substantial market share in the country, particularly in the capital Kampala where it mainly operates.
According to SafeBoda, its drivers earn around 30% more than regular boda boda drivers in the country. This led to more motorcyclists joining the platform and possibly influenced the Ugandan government directive for all commercial bicycles to join email applications in the countryside.
Even in Nigeria, SafeBoda in Ibadan is the number one cycling app for the townspeople. In the absence of crippling regulations and serious competition, SafeBoda has carved out a place for itself in Nigeria’s largest city.
It is indeed possible that SafeBoda may have halted operations due to the fact that it was not the main player in the crowded Nairobi bicycle market and therefore was not getting a commensurate return on its investment.
In terms of profitability, it’s an open secret that many email companies take a long time to make a profit. Despite being valued at around $ 90 billion, giant Uber has never made a profit since it started operations 12 years ago.
Likewise, Oride in Nigeria failed to make a profit during its short, albeit eventful, lifespan in Lagos, a development that led to its rapid demise shortly after the Lagos government took over. imposed a ban on bicycles in the state.
Although SafeBoda is a somewhat different proposition than Uber, both companies use the same aggregation model. In Kenya, SafeBoda may have encountered the inherent challenge of not realizing enough revenue to fully offset operating costs. The bike-helicopter company was probably operating at a loss.
Drivers have started taking trips offline
Similar to what some ORide drivers did before the eventual demise of the phone company, SafeBoda drivers in Kenya reportedly overcharged passengers by disconnecting.
In a Twitter chat with Technext, a Kenyan runner on Monday (original name withheld) revealed that SafeBoda drivers were clearly unhappy with what they were being paid and tried to improve their pay by carrying passengers without connecting to the SafeBoda application.
“I once requested a ride and the driver came but informed me that he will not charge according to the app but at his own price,” he said.
In March, drivers complained about low commissions they were getting on trips after SafeBoda slashed fares by 40% to attract more customers. Riders reported that many drivers canceled their orders on the app as a result of the complaints.
This would have reduced some of the company’s potential revenue, as more drivers likely neglected the app and resorted to offline travel to raise additional funds for themselves.
Monday also revealed that SafeBoda drivers do not always show up after accepting rides and said some are unprofessional in their driving.
According to him, this made a number of cyclists skeptical about booking SafeBoda rides and led them to frequent other transport services.
“In other cases you would ask, a driver accepts but does not show up. Others tend to be rowdy and even in some cases vulgar / violent.
After that, the majority began to apprehend the rides and began to opt for other modes of movement.
As a result, SafeBoda’s customer base in Kenya could have been significantly reduced.
What future for SafeBoda?
Due to the lack of detailed financial records from SafeBoda, it cannot be clearly estimated how the economic impact of COVID-19 has hampered the viability of SafeBoda in Kenya.
That said, the hail-bike company said it will continue to focus on growing in Nigeria and Uganda. Although SafeBoda primarily focuses on its bicycle and parcel delivery operations in both countries, it has already introduced a ‘Shop’ feature that allows users to order food and groceries through its platform. .
Uber Eats has been a huge success for Uber, and SafeBoda could gradually shift its focus beyond cycling and expand its online food retail offerings in Nigeria and Uganda.
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