Egypt-based matatu-hailing service SWVL has defied the transport regulator who had ordered it to stop operations on the grounds that it lacked a public service permit.
The app-run shuttle service, which operates a time and distance-based billing service anchored on the same concept as taxi-hailing apps, is still operating on some routes within the city despite the October 1 order by the National Transport and Safety Authority (NTSA).
Tuesday, NTSA said it had asked the police to impound SWVL vehicles and charge its crew and owners.
The regulator accused the firm of using a tour service license for public service operations, which requires a different permit.
“What they are doing is illegal,” NTSA Director-General Francis Meja said in a phone interview yesterday.
“We had reported the matter to the police and if they have not been arrested, it’s very unfortunate.”
The NTSA order also affected Little shuttles, one of SWVL’s competitors, which suspended operations after the order. Both services were popular with the working class looking for comfort and who were keen to avoid the chaos associated with matatus. Tuesday, SWVL remained guarded on the regulatory breach.
“While we may not be able to share any specific details yet, we are happy with the progress we have made so far,” the firm said in response to an inquiry from the Business Daily. NTSA maintains that the digital matatus remain suspended until they acquire Public Service Vehicle (PSV) permits or seek exemption from the authority.
“Let them just follow the law so that we can facilitate them to do business in Kenya,” Mr Meja said. “Let them come to us… We are open for discussions. It’s a fact that you cannot do business in Kenya without a proper license”.
SWVL says it has 150 buses on 100 city routes. It operates between the centre centre and Westlands, Thika Road, Eastern Bypass, Tatu City and Embakasi routes.
The Egyptian start-up in August said it had secured Sh1.5 billion funding to finance an aggressive route expansion plan in Nairobi. It had set a target to grow its network to 500 routes served by 1,000 buses.
The tech company leases the vehicles that currently include 11-seater and 14-seater vans as well as 22-seater shuttles at a daily rate of $70 (Sh7,000) and $150 (Sh15,000) to ply the various routes.
It tops up the daily collection if the earnings for the day are less than the daily leasing amount but collects any income above the agreed rate.
The service currently charges a flat rate of Sh200 but has plans to offer a distance-based pricing model at the end of 2019 or early next year.