Ride-hailing firms bet big on motorbikes

This story has significance for readers across Kenya and beyond.

Traffic congestion, demand for affordable transport and the rise of online shopping are turning Kenya's motorcycle taxi business into a great opportunity.

For years, ride-hailing firms built their businesses around cars, offering passengers a convenient option to taxis and public transport. As traffic congestion worsens and consumers demand faster and cheaper ways to move around, boda bodas have become a crucial part of digital mobility.

Motorcycles can weave through congested streets, reach destinations that are difficult for vehicles to access and cost less to operate.

Days ago, Rwandan ride-hailing firm Yego entered Kenya's motorcycle ride-hailing market. The firm says it has onboarded more than 4,000 electric boda bodas to serve Nairobi and plans to expand to other major towns.

"We plan to launch our services in Eldoret, Kisumu, Mombasa and other towns in two months," said Yego Mobility Kenya Director Alok Srivastava.

One of the company's key features is combining the convenience of traditional boda boda services with the pricing of an app-based ride. One can use the Yego passenger app, a pairing feature to connect with a rider or hail a Yego rider.

In the latter case, the rider activates the trip using a digital meter on the company's app. The fare is then calculated, based on the distance and time, eliminating price negotiations. Riders will also pick up passengers without having to remain parked while waiting for an app request.

Bolt has in recent days expanded parcel delivery service in Mombasa to include motorcycles. The ‘Bolt Send’, was launched in Mombasa using cars early this year. The Estonian company says the addition of motorbikes targets movement of small parcels.

This comes in handy for retailers, restaurants, pharmacies, offices and online sellers who do not have in-house fleets to dispatch goods to customers.

Bolt also targets businesses moving documents between offices or individuals sending items across town.

"For a small business, a delayed delivery can mean a delayed sale, a missed customer or an unnecessary operating cost," Bolt's Senior General Manager for Rides in East Africa, Dimmy Kanyankole, said.

"We are making it easier to move smaller parcels using infrastructure that people already know and use."

Customers can request "Bolt Send" through the Bolt app, get an upfront price estimate and track their parcels in real time.

The expansion comes as Kenya's e-commerce market continues to develop, creating a parallel opportunity for companies providing the logistics that underpin online shopping.

The pandemic accelerated the shift towards online purchases, with retailers like Quickmart, Carrefour and Naivas investing in mobile apps.

Online marketplaces, including Jiji, Kilimall and Jumia, have also helped establish delivery of items, while smaller sellers have increasingly turned to TikTok, WhatsApp and Instagram to sell goods and other items directly to consumers.

The widespread use of mobile money has made it easier for these social-commerce businesses to receive payments without maintaining physical shops.

While delivery costs are one of the biggest obstacles to the growth of online commerce, motorcycles offer an avenue for lowering that cost while shortening delivery times.

Companies like Uber, Bolt and Little have expanded beyond traditional passenger transport into parcel delivery, competing in a market where platforms such as Glovo have established motorcycle-based delivery networks.

Last month, the government introduced a 10-year Courier Hailing Service Provider permit for digital delivery platforms, separating the licensing requirements for app-based delivery services from those governing traditional courier operators.

The permit is over three times more expensive – a Sh100,000 licence fee and a similar annual operating fee – as the government seeks to grow revenue from the rapidly expanding sector.

Reporting originally appeared via Business Daily. Read the full source for additional context.