By Japheth Ogila
Published August 11, 2014
An attempt by the Government of Kenya to reform the public transport sector that is marred by chaos, extortion and road carnage has, once again, stalled.
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Like another attempt in 2004 that had been aimed at ending road carnage through mandatory installation of speed governors and safety seat belts in Public Service Vehicles (PSVs), the 2014 order that was to have come into effect on July 1, 2014 was to have seen paying of fare in PSVs replaced by a cashless system using smart cards to stamp out corruption and tax evasion. But no sooner had the deadline for the system come into operation in Nairobi on July 1, 2014 reached than it was suspended.
Through the National Transport and Safety Authority (NTSA), the government had cautioned that any PSV operator who failed to comply with the directive risked a fine, jail or revocation of their operation licenses. But the deadline was postponed indefinitely as PSVs and travellers were yet to comply given the Kenyans’ habit of last minute rush of complying with any government regulation.
The NTSA regulation required all passengers using PSVs to pay their fares using prepaid electronic smart cards, PSVs were to be registered under companies or Savings and Credit Cooperative Organisations (SACCOs), PSV owners to provide evidence of compliance and drivers to have identification stickers to ensure adherence to their routes and timetables.
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Among the cards to be used were BebaPay, Abiria, MY1963, MasterCard, PesaPrint, Visa and M-Pesa.
The adoption of this cashless fare system would have come with its own merits for smart cards are portable and can be reloaded through mobile banking technology.
By formalising the public transport system would have brought the PSV staff from informal sector and thus enabling the government to collect tax from them as their salaries would have been paid through the formal banking system. What is more, the cashless payment system would have limited extortion or corruption as it would have limited loose cash in the pockets of matatu staff that is often used in bribing traffic police officers to get away with road offenses.
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A survey by Institute of Policy Analysis and Research (IPAR) of Nairobi had indicated that the cost of operating PSVs is costly as the PSV conductors pocket the cash collected or use it to bribe police. IPAR had estimated that it costs Sh3 361 (about US$40) to operate an 18-seater matatu (minivan) and Sh3 882 (about US$46) to run a 25-seater PSV per day. Operating buses is even more costly with a larger share of expenses going to bribes, fuel and wages as the rest disappears into the pockets of conductors, loaders and drivers. This loss would have been minimised had the cashless fare system come into force as envisaged.
But it is unlikely that matatu staff would have accepted the change without a fight as it would have cut the supply of money in the hands as all the payment would have gone directly to PSV owners.
And what share of blame does the government bear in the noble but difficult to implement reforms?
There was lack of public awareness that the public transport system was to go cashless. It was also unclear who was to bear the cost of installing card readers in PSVS and matatu staff in their operation
Also of concern was the privacy and security of card holders; besides losing money to fraudsters, it was unclear what measures the government had put in place to unauthorised access to one’s personal information. So were the cards to be protected by passwords, fingerprint encryption or secret personal identification numbers (PIN) to ensure that only the holders use them?
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Another glaring shortcoming of the system was non-availability of a universal payment system that would have been used by holders across all payment platforms; would the travellers have been forced to acquire all the smart cards in the market to board any vehicle of their choice? And how would travelers have been compensates whenever a PSV broke down as conductors would no longer have had the money with which to refund fares?
