A cold war is raging between the existing providers of public transport organisations and the emerging tech companies seeking to provide futuristic transport services.
This is the economic war popularised by Karl Marx as his theory of innovation and business cycle. Marx identified it as a process of decline and renew in capitalism as it entailed the “linked processes of the accumulation and annihilation of wealth under capitalism.”
Austrian economist Joseph Schumpeter saw Marx’s concept differently and referred to it as creative destruction, mostly known as Schumpeter’s gale.
He described the concept as the “process of industrial mutation that incessantly revolutionises the economic structure from within, incessantly destroying the old one, incessantly creating a new one”.
We have seen this happen in taxi services, hotel and accommodation, retail, communication and media. More sectors are under pressure to live up to the emerging fourth industrial revolution. Whether the transport sector results to violence to protect their turf, change is inevitable.
Like the old proverb says, “if you can’t beat them, join them,” the transport industry in Kenya should rethink about its future. As it is at the moment, the industry has many problems that commuters are simply tolerating.
What perhaps they don’t know is the fact that problems are the basis of an entrepreneur’s opportunity.
The government too would celebrate a more structured transport sector. In spite of the fact that media has highlighted that the industry is infested by networks of cartels including criminal gangs, not much has been done to reform the sector. President Uhuru Kenyatta recently weighed in on the public transport sector issue, warning rogue police officers to choose between their jobs and running matatu businesses but it has been business as usual.
It is an open secret that most of the corruption proceeds are “cleaned” through the industry.
Many investors in the sector hardly pay tax. Unless the government deals firmly with the criminals in the sector that has put off investment into a formal organized transport for the country, it will fail in its investment in the proposed Bus Rapid Transit (BRT) in Nairobi.
An opportunity has now been provided by technology to radically transform the transport sector and enable investors to escape the criminal trap, increase tax collection, minimize corruption and accord customers the security and dignity that they deserve.
New technologies make it possible to change revenue and business models. The change in revenue model for example will increase the passenger numbers and lower the cost. Transport, therefore, is key to economic development of the country and can attract investment. More investments mean greater formal employment.
A good public transport system discourages private vehicles on the road and helps to decongest cities. The proposed measures to decongest Nairobi have been tested in Lagos and failed.
The outcome has been a chaotic transport system that instead of facilitating economic growth, ends in draining the economy through endless traffic jams.
In my view, there is need for a comprehensive policy on public transport system in major African cities that incorporates aspects of smart cities concept (leverages data from sensors to provide information which is used to manage assets and resources efficiently in cities).
The problem, however, is that some of the policy makers are conflicted in benefiting from the corruption and opportunities for money laundering that make chaos the norm rather than the exception.In Nairobi, for example, top county leadership owns the largest fleet of matatus (informal transport) making any form of reform impossible.
Hence the sense of urgency to allow new models of transportation that guarantees citizens peace in their daily travels, a clean and sustainable enterprise.
Application of smart solutions in the transport sector is long overdue. The government therefore should act with speed to protect innocent investors whose motives are to drive out the problems that afflict the transport sector in Kenya.
The writer is an associate professor at the University of Nairobi’s School of Business.
The views expressed in this article are of the author.