Boda Boda, as it is commonly referred to in most East African cities(and ‘Nduthi’ in Nairobi) is an old and one of the most commonly used means of transport in East Africa. There are many reasons as to why that’s the case. One being its flexibility(it can manoeuvre in the remotest of places) and it’s very cheap. Prices start from as low as Ksh.30 where a regular cab would cost you up to highs of Ksh.300 for the same distance. While the use of Boda Boda is a century-old means, changing user needs, penetration and adoption of technology have brought a new wave to the industry.
There is the addition of the technology layer where various companies develop and run services to allow you as the user to order a Boda on-demand and within the same system, a nearby driver is dispatched and picks you from your location to your destination. This e-hailing is used to transport people and deliver luggage or over short relatively distances and has seen, massive uptake in the last few months.
The new wave
The new way to get a Boda Boda ride or deliver your product from point A-B has seen an influx of companies offering this service, all aiming for a slice of the potentially huge market. It has attracted many of them, a mix of small (but growing) local start-ups like Getboda and some huge international names like the behemoth that’s Uber. The market has officially become a battleground for the service providers and has been very active in the past few months.
It has become very common to spot branded Boda riders on the streets working for these apps with the main frontrunners being uberBoda, Safeboda, Little Boda and Bolt.
Safeboda was founded in 2014 Kampala, Uganda with the plan of offering safe bike-hailing, through thorough recruiting and training of riders. The company which started with 20 drivers, growing the fleet to 100 fully trained riders and completing 1500 rides a day in just 7 months, has expanded to Entebbe and scaled its operations to a city out of Uganda ie Nairobi, where it’s doing well according to market metrics. Safeboda has always remained tight-lipped about its funding rounds, even though it’s well knew that its venture-backed. The company(around May 2019) raised an undisclosed amount of funding led by GO-VENTURES, the venture capital arm of South Asia’s ride-hailing giant GO-JEK. Prior to this, the startup had raised the unknown amount of money, which our sources place it at between $1.2M and $1.5M. The latest funding is being used to further develop its product, expand into more markets in Africa and oversee its next growth stage.
One of the most fascinating features of Safeboda is their digital wallet which customers use to pay for rides, pushing for a cashless ecosystem and further stamping authority in its native markets. Customers have an option of getting discounts and cashback on rides if they use the wallet, eg a ride that would cost me Ksh.150 if I paid in cash costs me around Ksh.110 if I used the wallet. Its a win-win in that customers get ride subsidies while Safeboda increases the use case of their digital services, sustainably. Safeboda has been able to sell their service well and increasingly becoming a household name in East Africa. Their customer care has so far been impressive and we hope they maintain the same going forward.
The phenomenal ride-hailing giant Uber, launched uberBoda, a product to enable riders to get Boda on a tap of a button. The service was launched in November 2018 in cities such as Kampala and Nairobi. Just like you guessed, the service is accessible via the normal Uber app hence the users don’t have to download a standalone app for that. On its launch, Uber sold its new service along the lines of “a new way to get around the city faster and more flexible”.The launch of uberBoda did not come as a surprise to the East African Tech Fraternity, given their already established international fund, heavy funding(in billions of dollars) and extremely huge networks, which makes them play “big boy” in any market product offering. It’s worth noting, however, that uberBoda hasn’t been as aggressive compared to Safeboda, on one part because BodaBoda isn’t their main, leave alone only business. It will be interesting to see how fast uberBoda grows or rather handles competition, given its history of how it counters “smaller” competitors, mainly reading from the script of acquiring them or outspending them in Marketing.
Bolt, formerly known us Taxify is an Estonian-based company which offers e-hailing services to users with product offerings ranging from cabs, electric scooters and recently entered the BodaBoda industry after their rebranding. As of February 2019, it had operations in 50 cities across 33 countries. The company,which at some point faced a backslash due to customer care issues,driver/customer conflicts from its East African users (which could have led to the rebranding) is betting on the growing BodaBoda industry and hopes to get a share of the market and has been aggressively marketing and recruiting riders even in Tier II and III towns. Its relatively early to comment on its progress on the BodaBoda arm as it’s still getting a grounding, and also because Safeboda is not giving them any chance in matters publicity especially on social media. The latest round of funding for Bolt of $67M put the company at a valuation of $1B+ as reported by Techcrunch in July 2019. Our guess is Bolt plans to leverage on its global tech team and funding to take on its rivals and capture the Boda industry.
The Nairobi based ride-hailing firm, Little is also, as expected in the Boda industry after months of piloting. The firm which started as a cab-hailing a little over 2 years ago has been trying various verticals in the push to become a super app. It has the cab-hailing, food delivery(Little Treats in Kampala) and now Little Boda. As opposed to the Safeboda, uberBoda, Taxify Boda which use the motorbike network mainly for human transportation, Little Boda started by offering both courier and human transportation on their network from the word go after the pilot. The company which yes to be the “Uber For Africa” hasn’t let a lot of its fundraising details in public but as far as we know it has $13m in funding ($10m from its parent company Craft Silicon and other stakeholders plus $3m it got from a sale of 10% stake to an Indian firm for pan African expansion.)It will be interesting to see how homegrown Little Boda tackles its rivals for a market share.
Every one of the four companies has a chance and a differential factor that could propel it to success. Safeboda started by a laser-sharp focus on the BodaBoda industry alone, unlike its competitors who are offering BodaBoda as an extra service. It also has the advantage of being homegrown hence it understands the market way better than Uber and Bolt. It has what we think is enough financial and technological backing with the latest entrant in investment(GO-VENTURES) bring extra value in its fin-tech and insurance verticals.
Uber has money, not that the others don’t have but the kind of cash they have is that if they wanted they can outspend anyone in the market, leverage on its global tech team and finally engage anyone in a pricing war that could result to some casualties.
Bolt and Little Boda still have some homework to do and in all honesty, they are playing catch up to Safeboda and Uber, though they have their unique advantages as discussed that can add to their war chests.
As earlier stated, its just the beginning of the game and we can’t quite tell who will win what share or how the market will turn out to be in the coming few years, but it is definitely an interesting war that The Jujamaica Tech Team will closely follow, analyse and get you detailed reports. Stay put.