How to tame the rogue Matatu Industry in Kenya and create millions of Jobs

If there is a sector in Kenya that mints billions of shillings everyday but goes unregulated is the Matatu Industry in Kenya – PSV.

Truth be said, the Matatu Industry employs hundred of thousand if not millions of jobs in Kenya but both the National and County Governments gets a meager fraction of the taxes and rates they deserve.

It was hoped that after streamlining the Matatu Industry in Kenya into saccos, sanity would start to prevail, but nothing is further from the truth. Lawlessness, anarchy and extortion reigns supreme here.

The biggest setback to the noble idea of matatus operating under the sacco umbrella emerged when the sector players and the government erroneously agreed that these saccos will operate with vehicles owned by individuals as opposed to the vehicles being exclusively owned by the sacco. In this arrangement major decisions are made by the individual matatu owners as opposed to the sacco which was the intended decision maker. This is why the police and county government askaris still shamelessly extort and terrorize the matatu crew. This goes on because the police know that the sacco officials do not have the powers to act on behalf of the matatu owners and therefore the fate of the PSV vehicle is left to the Matatu crew and the owner.

This state of affair has to change. But it will not change through coercion and intimidation by the government, it will change after the government makes it very attractive to have the investor put his/her money as shares in a particular matatu sacco rather than buying the vehicle separately then joining the sacco later.

The operating environment for the matatu sacco should be made so easy, convenient and lucrative such that any person would rather invest in sacco shares as opposed to the way the arrangement is right now. As I have pointed out earlier, the biggest beneficiaries would be the government, financial institutions, passengers and the Matatu owners. The biggest setback to this arrangement is usually the Matatu crew. They usually want to handle the cash so that they can have their cut.

How can the governments achieve this?

Having known that the matatu crew is the biggest obstacles to this development, the government and the matatu saccos should first make it prestigious and desirable to be called a matatu driver and conductor. How?

1. The matatu crew should be made employees of the sacco
2. Their terms of service should be made permanent, pensionable and able to join a trade union.
3. Their salaries should be made mouth watering such that a temptation to misuse the vehicles is minimized.

Secondly, the matatu saccos should be given some benefits like partial or full tax waiver while purchasing the rolling stock. The government knows very well that they will recover this very fast when the vehicles start operating.

Thirdly, the investor in the matatu sacco should be granted an online portal that will be showing how his/her money is growing. Transparency will be key on the part of the investor.

The benefits that will accrue from this noble development will be

1. The mode of payment for the fares by the passengers will easily be changed to digital payment and compliance to this on the part of the passenger is well explained HERE
2. The government will be able to seal the loopholes where revenue leaks sufficed.
3. Financial institutions will have enough liquidly to advance loans to businesses.
4. The investors will be unburdened the headache of managing the hard-knock matatu crews on their own.
5. Compliance on government’s laws, rules and regulations on the roads will be enhanced.
6. Extortion and harassment of the matatu crew by the police will be eliminated because it will be hard for the police to extort from the saccos.
7. Lawlessness on the part of the matatu crew will also be eliminated because they will be answerable to the sacco management.
8. More white-collar jobs will be created in the sacco offices.

Unless there are any other reasons why the Matatu Industry in Kenya cannot be reformed in this way, then the government has no otherwise but give us Kenyans a working public transport system which will also greatly benefit them in terms of revenue collection.

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