How city cartel rakes in billions from matatu owners

By Edwin Okoth, @Edwincowino January 5th, 2017 2 min read

Matatus that ply the City Center-Umoja on Ronald Ngala Street. PHOTOS | FRANCIS NDERITU

Kenya’s public transport industry loses at least Sh47 billion every year to a network of cartels that run the sector — including organised criminal gangs, rogue traffic police officers, county askaris and touts.
Public service vehicle (PSV) owners, who do not bow to this brutally ravenous cartel, are either pushed out of business or forced off lucrative routes.

As a result, Kenya Bus Service Management managing director Edwins Mukabanah says, the cartel has pushed PSV owners to the periphery of the business income, with many opting out as others remain hostage to the syndicate.
“If you add up all the money we lose to the cartel and the lengthy compliance requirements that come with running a matatu, you can see why even the oldest operators have never grown to become multinationals despite the fact that this is a multi-billion-shilling industry that is always lucrative,” said Mr Mukabanah.
“Our crews are under siege and matatu owners are left with almost nothing, not even enough to properly maintain the buses. That is why many quit.”
Rogue traffic police officers and county askaris, illegal gangs and route cartels make the deepest cuts into the PSVs’ revenues, with each group collecting at least Sh200 from the 120,000 matatus daily.
This means each group pockets some Sh7.2 billion a year, although stakeholders believe the figures could be much higher as some routes pay charges running into thousands of shillings.
So normalised is this theft and extortion that new vehicle owners often have no qualms paying a ‘fee’ to join a route or be allowed to pick up passengers from a designated terminus.
Investigations by the Nation showed that bus owners part with between Sh30,000 and Sh100,000 to launch operations on a route.
Gangs on some routes — such as No. 102 to Dagoretti and Kikuyu — demand the new vehicle for their exclusive use for some time before the owner can start earning from it. They also dictate who will be part of the crew of a vehicle before sanctioning its operations.
Matatu Owners Association (MOA) chairman Samuel Kimutai said the extortion ring runs deep in the sector and the crews are usually caught up in the web, cooperating to save their lives as those who fail to comply are harassed out of business or even killed.
He, however, refuted claims that PSV operators are responsible for feeding the cartel, which has given the business a bad name.
“Who wants to just give money for free?” Mr Kimutai asked. “Even the crew would rather keep it for themselves, but they are compelled by the system of extortionists backed by the police.
“They are helpless. Otherwise, how do you explain the role of idle men at a terminus?
“As a matatu owner, I would not just gamble with a Sh5 million investment. But I can tell you for a fact that they have totally diluted the business. We are left with the major expenses such as insurance and repairs, while the bulk of the harvest is scattered across the extortion ring.”

The cartel has disrupted order in the public transport system, encouraging lawlessness and providing protection to law-breaking crew at the various terminuses and bus stops.

This guy is the biggest cartel face in that industry. Tembea hizi bus stops majioni ujue.

Just a few men esp hapo GPO who take everyone hostage dictating the fares.

WaKenya wakiamka ujinga zingine zitaisha. For now though, #TanoTerror

Mungic in different colour

He is a billionaire am sure


That’s why I shake my head when I read of people here asking for advice on starting a matatu business. Kama ni pesa mingi zakusumbua nunua Tbills na utulie.

Matatu is the last thing that I can invest in

NTSA wameban little cabs mats…

nimeona swvl zikioperate bado

only change can bring sanity.

This week I’ve been SWVLing and tell you what, the cartels aren’t happy.

At one stop, a drunk guy dressed in a mat uniform just came out of nowhere and attacked the driver verbally asking him to go tell the mHindi ajitoe kwa hiyo biz.

Ni kama kanawaka tu pole pole kwa hii mat industry…

Izi zinapigwa Vita juu y accountability, zikishika znaeza smoke out hao cartels

Had a matatu once. I would never put my money in it unless I am the one driving it. Kama ni Van ya biashara nataka I just make it for hire. Ikitoka asubuhi nalipwa na jioni imerudi