In case you have never been to Kenya, SafeBoda is a company that sought out to formalise the otherwise informal Motorcycle industry present in the country. Where in the past citizens would have had an unsafe and inconsistent experience, but with SafeBoda, that would soon come to change.
3 years in the game, on 27th November 2020, SafeBoda announced that they’ve made the difficult decision to pause Rides and Send services until further notice. Given the business disruption seen as a result of the global pandemic, one can’t say that this is completely unexpected.
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The news of SafeBoda exiting the Kenyan market was unexpected and also untimely in the wake of the economic recovery from the aftermath of COVID-19. When Safeboda was launched in Kenya it revolutionised the way the sector worked. Suddenly we had boda riders concentrating on customer service, giving you reflective jackets and also hair nets because people were concerned about the hygiene levels of the shared helmets. They also changed the perception of how safe the boda bodas were since many accidents and incidents of careless riding were attributed to the industry. Suddenly the customer could ask the rider to be more careful, they were also able to be more in charge of their own safety by wearing the provided jackets and helmets and the passengers had a general sense of safety. They quickly became popular, but most importantly they created a blueprint that enabled other boda companies to work on their customer service as well as safety measures to keep up with the competition.
Safeboda has been key in creating jobs as we know it, around 4000 riders in Nairobi alone have been beneficiaries. They have been instrumental in increasing trust in the sector knowing that trust is a currency of business. They have also made it easier for the supply chain and logistical side of small businesses to thrive by delivering packages from vendors to customers with ease and at the touch of a button. This was especially useful for the e-commerce industry at the onset of the initial lockdown that saw many afraid of leaving their homes but still in need of various goods.
With the traffic and movement in Nairobi, spending hours stuck in traffic has become the norm and a nightmare. The boda industry has been key in ensuring that there is the ease of movement for those that need a quick and efficient way of getting to their destinations. Some have been saved from being late for critical interviews and client meetings and students have been saved from constantly facing the anxiety of getting to class late and being locked out. Some young people have also benefited greatly through using their influence in their social circles to promote the brand thus earning an income on the side.
This exit will not only impact the lives and jobs of those directly employed by the company, it will also indirectly affect the small businesses and clients at large.
Link: Ashley Mutiso
Motorcycle ride-hailing company which saw its origin from Uganda has now paused its operations from the Kenyan market. This move will affect the community negatively especially the motor riders who rely solely on the business. For our economy which also fetched some income tax, the effect of the giant business in the motorcycle exit will be felt in that there will be no corporation tax and income tax to be paid from the said company and employees respectively.
In my opinion, the government through the relevant offices who have a responsibility to make sure that business continuity is working during these uncertain times of COVID-19 pandemic, a waiver maybe in corporation tax for such online businesses ought to be put at a very low percentage. Yes the government has already waived corporation taxes from 30% to 25% but still for these online businesses like Safe Boda, the tax ought to be lower than 25% which applies to others.
This exit will affect businesses which use Safeboda online delivery like online bars, restaurants, cosmetic shops, grocery shops among many others whose operations have been doing well via online platforms. Their profit margin will be reduced, the employees of those restaurants or bars will also feel the pain of this exit as some of their services will be rendered redundant.
Safe Boda used to get a great competition from their competitors like Taxify, Uber, Little cab among others and the restrictions these boda guys got from the government like no entry into the Nairobi business centre since some riders have made a bad reputation for the boda riders by going against the traffic rules. Could this be one of the reasons why they had to pause their operations? If we can add the effects of the pandemic to this business and the restrictions they had to ensure, I think that was too much for the company.
Link: Robert Warui
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