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Navigating Uganda’s Public Transport: The Role of Taxis

By Philippa Nantamu & Ian Ortega

In Uganda the public transport system is primarily dominated by road transport with taxis and motor bikes playing the most prevalent role especially in urban areas like Kampala and the big city towns around the country.

Uganda’s road infrastructure is underdeveloped with a large portion consisting of unpaved roads and alternate under-utilized modes of transport such as train or water due to poor maintenance and inaccessibility to majority of the citizens and or visitors. With exception of the massive highways which have been recently constructed such as the northern bypass, the kampala-entebbe express way, and some out of town highways, majority of the roads in Kampala are filled with potholes and regular maintenance works happening throughout the busy day, therefore the public access is greatly affected and is a headache to navigate.

In the case of boda bodas, here is where they come in most handy and maybe why their sense of entitlement is great, because of their size and flexibility, they are able to circumvent most challenges experienced on the many city roads, and in doing so create even more headaches for the poor sods who are driving on the very same roads. People always claim that boda bodas are a necessary evil for the country’s economy because of their size, mobility and flexibility, maybe that is true, however, how is it okay to ignore their insistence on not following the traffic rules and frustration to other road users? Story for another time.

Our focus, is the big brother/sister to the seemingly small boda boda, who even given the size, is able to try and emulate the same behaviors and characteristics of the boda bodas on the same challenging roads in our country amidst other road users.

History

Back in the day, two bus companies – the Uganda Transport Company (UTC) and the Peoples Transport Company (PTC) – provided public transport services in the 1970s and 1980s before their demise in the early 1990s which led to the public transport system in Uganda today, an informal privately run public system.

Uganda Taxi Operators and Drivers Association, UTODA in this instance is a self regulated, self organised association which has failed to drive an improvement in the quality of service provided to passengers, to control the number of taxis operating in the country, and to control fair and similar route fares across the board.  

System Overview

In Uganda, taxis operate on no timetables and the organization is only around designated places such as the assigned government taxi parks and one mustn’t forget the parks they themselves create on busy highways, such as at Busega round about as you head to Mityana road,  the forever exisisting park at Shell City Square and wherever they see fit on the narrow roads of CBD.

From the designated parks and unofficial “illegal” parking spaces, the taxis are filled on a first come basis in a designated area of neighboring villages, towns, or regions. In this format, the taxis once full, often follow each other when joining the road to begin the journey to whatever area using a semi-permanent route of travel. During peak hours, meeting other road users especially private driven cars on the road and boda bodas, it creates a traffic holdup which is then increased by the random drop-offs and pick-ups of passengers along the travelled routes.

Around Uganda, taxis are many and they are mainly privately owned either by individuals or groups of individuals and not the government which in a way exposes the confusion where this is an informal transport option for the vast number of Ugandans, reportedly carrying approximately 83% of the commuters in Kampala division per a 2016 KCCA study.

For the owners, control is mainly through the purchasing of the vehicle and hiring a driver and maybe a conductor who will be in charge of day to day running of the vehicle. That’s where it stops. Taxi fares, the randomised pick-up and drop-off of passengers, “except from the parks”, the downtime of the cars during off-peak hours, uncontrollable police stop checks are all handled by the drivers and conductors, in a way, carpe diem to them but not to the owners. 

This should be considered an investment, however, with the informality of the system, the randomness of the day-day operations, how are these transport cars beneficial to the investors?

New taxis are majorly purchased for the longer journeys from Kampala to the big region cities, i.e. Gulu Town, Mbale, Mbarara, Hoima, etc, and the transport fares reflect this. As you move backwards to Kampala City, the lifespan of the available taxis increases, hence the owners who purchase cars for these areas will spend less capital initially but will face challenges in maintenance, and will also have less control in day to day operations because of the short distances driven (<25km) one way and monitoring.

The tiered ownership of the taxis provides an opportunity for flipping cars for profit where the owners can sell them off at a certain amount after recouping their investment back in fares.

How do Taxis Actually Make Money In Uganda (Operations)

The taxi business in Uganda rotates around two models.

The first model is where taxis operate along a designated route and from a designated stage or park. This is common for all taxis plying the longer routes/journeys, often more than 25 kilometres out of Kampala. The attractiveness of this first model is driven by several external and internal factors. Externally, the demand for the upcountry routes is more predictable and organized. Passengers/riders often prefer to use these designated taxi parks when planning upcountry journeys, as there’s more reliability in the service and the rates.

The Second Model commonly known as ‘Okuvuga Ekubbo’ in Kampala taxi speak is where taxis choose to not originate at a specific point but instead drive based on the popularity of the route. This is common for the short journeys. A case in point is a taxi that operates along the Ntinda to Nakawa to Lugogo to Kampala to Wandegeya and finally back to Ntinda. In this case, taxis will operate along this ring-road, stopping sometimes at the ‘illegal stages’ where the touts are in control or choosing to keep in ‘stop-drive’ mechanism, getting on and off the road at unpredictable moments to pick and drop passengers as the need arises.

In the second model, taxis are also often franchised out or leased out for a short period by the drivers. One set of ‘driver and conductor’ may choose to take an afternoon break as other leases out for the afternoon. A lease fee is agreed for the period, but this could often get hiccupped as some of those that lease these taxis tend to drive without valid permits and thus fall on the wrong side of the traffic police.

In the first model (the ideal model), taxis must book their number on a schedule and thus will be given a time when their taxi will be loaded. Taxis must compete in getting an early scheduling as this enables them to do one or more rounds. However, there’s also an express option (often more expensive) and this is called ‘numberless’, here a taxi will be loaded whenever it arrives in the taxi park and thus won’t be limited to the formal schedule. Again, it’s a wager given that Kampala’s Road network and traffic gridlocks constrain the number of rounds a taxi can operate in each day.

The Limiting Factors in the Taxi Business Model

Several factors present themselves as limiting factors or ever-present constraints in the taxi business model. We’ve already addressed the capital or financing challenge. One must make a choice between a Capital expenditure in a new taxi (longer payback period), struggle to get assigned a route or capital expenditure in an older taxi, although relatively cheaper at acquisition, it’s expensive to keep up with repairs and maintenance, not forgetting the endless traffic fines and ‘bribes’ that come with operating a run-down taxi.

In exploring the operational limiting factors, we assess the entire value chain in a normal taxi operation.

Limiting factor number One is the road infrastructure (potholes, poor drainage during rainy seasons) and this affects both taxis operating the long journey and short journeys. Given a specific road distance (kilometres) and traffic density, most taxis on the longer routes are limited to not more than 3 trips a day. On the shorter journeys, the trips could be more than 3 but that then gets constrained by the next limiting factor.

Limiting factor number Two is the asymmetrical demand. Demand peaks in the morning (when people are commuting to work) that’s from 6am to 10am, it then goes latent throughout the afternoons, and surges back from 5pm to 9pm (as people return to work). In these times however, taxi supply doesn’t match to demand. Thus, the taxis available during this time tend to hike the prices (also common during the festive season: Easter Holidays and Christmas Holidays). However, taxis that are also limited in profiting from this demand situation by the grid-lock jams and the cut-off or blocked roads. Most junctions in Kampala are yet to be signalled thus they become bottlenecks during these high traffic movement periods. This presents a dilemma, when demand exists, taxis cannot fully profit from it by making more trips, except by hiking the prices.

Limiting factor number three is the capacity sizing of the taxi. Again, during peak demands, some taxis will overload the passengers. Instead of the usual 14 passengers, these would go to about 18 passengers. Thus, the Ugandan taxi could be re-thought with an intermediary that’s not a bus, but more than a taxi.

Limiting factor number four is the Boda bodas. The boda bodas present themselves as a more flexible, more agile alternative to taxis during the peak moments. Boda bodas can churn out more trips, they will rarely hike prices as customers have more leverage and bargaining space even in the peak hours. Boda bodas also offer a customized solution. They can go off the main roads and drop customers at their exact locations or destinations unlike taxis. Boda bodas can also be pre-booked (most Ugandans have their own boda guy), but also boda bodas can be reserved for one’s day errands. You can use the same Boda boda to go to Ntinda, it waits for you, you use it to go Luzira. Boda bodas innovate around their customers. Boda bodas present a substitution effect on the taxis. Every year, Uganda receives more than 120,000 new units of Boda bodas.

Limiting factor number five is that there is no limit to how many taxis can be assigned to a route. This affects overall route profitability. Although this could favour the consumer, it affects the taxis that operate this route. Some taxis end up doing only one trip a day, and sometimes that will be a one-way trip and fail to garner the numbers to support a return trip. Most often the case, majority of the taxis are found clustered in groups parked along the main public roads throughout the day waiting out their turn to load up passengers or to go on route. The taxi market is an open market, the licenses are not capped. This doesn’t help the case, and one can only wonder how the investors are accounting for all this regular down time.

Limiting factor number six is that more and more Ugandans once they jump out of the lower-income rungs, many opt for their own private means of transport. Better still, ride-hailing services are also shedding off some numbers off the possible taxi demand. Private cars owners are choosing to be part of the Uber drivers during the peak hours, in the morning on their way to work and in the evening while driving back home. Although there are still many passengers that use the taxis, for many when given an option, a safer boda boda or an ability to own their own car, they choose to shift even though it’s just for an extra sense of comfort.

Where is the Growth Opportunity?

Now that we have established the history of the taxis and the constraints, we ought to think creatively around the transformation of the taxi business. How can taxi owners make the most out of this business? What would be the new way of thinking around this business model?

Growth Opportunity One is the Eco-system model. The taxi business industry in Uganda must be re-designed as an ecosystem of different multiple players and stakeholders. It must also be acknowledged that this eco-system although with different interests (often conflicting) can be redesigned to produce value. That means getting all the players on one table to outline all aspects of this ecosystem. The players here include the taxi owners, the taxi associations, the government and authorities, the passengers, the conductors and drivers, the park operators, the touts. You want to build an ecosystem that brings together a synthesized play of these interests while producing shared value for all players.

Growth Opportunity Two is adopting a capped licensing. Like the London Medallion system, the Ugandan Taxi license can become a financial instrument that can be openly traded. Instead of giving out an unlimited number of licenses, the licenses should be capped and then traded. Those who acquire new taxis will be expected to purchase a license from the Ugandan Taxi License market.

Growth Opportunity Three is Dedicated Taxi Routes and Timetables. Just as other countries have dedicated bus routes, which also encourages more people to opt for the public means of transport, the new arrangement should require future road construction in the cities and major routes in Kampala to have a dedicated taxi route given a dedicated timetable. However, this should come on the background of a resized taxi capacity. The current Ugandan taxis are under-sized. There should be an arrangement with Kiira Motor Vehicles to produce a taxi sized for the Ugandan route traffic and modalities. Case example is the Philippines Jeepney that carries up to 25 passengers.

Growth Opportunity Four is Technology Adoption. The demand and supply matching situation cannot be solved in the absence of technology. There is need for an urgent platform that puts both passengers and taxi drivers on a platform. But this should work in coordination with specified gazetted taxi stages. Thus, traffic situations can be shown during a given time, and whether taxis are on the way (so that passengers waiting do not have to opt for other means). But again, this technology must be built on top of some fundamentals/basics such as a proper road network, compliance to the taxi stages, a medallion system to mention but a few.

Growth Opportunity Four is for Modular Taxis. In this case, during moments of low demand, taxis can be re-purposed as delivery vans. Instead of a DHL owning parcel fleet, a Ugandan taxi could be remodelled to also implement this logistical duty. Ugandan taxis can also be enlisted as city tour vans. For tourists and travellers that want to explore Kampala, Ugandan taxis should be designed in such a way that they can easily take on this purpose.