The ride-hailing industry in Kenya has experienced tremendous growth in recent years, with companies like Uber and Bolt dominating the market. As such, many people have been attracted to the idea of venturing into this business to make a profit.
However, there are several reasons why you should reconsider joining the Uber and Bolt business in Kenya. Some of these reasons include the following:
Saturation of the market
The Kenyan ride-hailing market is highly saturated, with several players already in the market. Uber and Bolt are the dominant players, but there are other companies like Little, Mondo Ride, and Swvl, among others.
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This means the competition is very high, and it can be challenging to stand out and attract customers. As a result, the chances of making a significant profit are relatively low, and the cost of acquiring and maintaining customers can be very high.
High costs of operation
Running a ride-hailing business in Kenya can be costly, and the high operation costs can eat into your profits. To start with, you will need to purchase or lease a vehicle, which can be expensive.
Additionally, you will need to pay for insurance, fuel, maintenance, and other operational costs, which can quickly add up. You may also have to pay for parking fees, tolls, and other expenses that can eat into your earnings.
Unpredictable regulatory environment
The regulatory environment for ride-hailing companies in Kenya is unpredictable and can change at any time. This can make it challenging to plan and make long-term decisions for your business.
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For instance, in 2018, the government introduced new regulations that required ride-hailing companies to obtain a license and pay a fee. The regulations also required the companies to have a physical office in Kenya, which added to their operational costs. Such changes can affect your business operations, and you may find it challenging to keep up with the changing regulations.
Safety concerns
One of the biggest concerns for customers using ride-hailing services is safety. Unfortunately, there have been several cases of riders being robbed, assaulted, or even killed by drivers posing as ride-hail drivers.
Such incidents can tarnish the reputation of your business and make it challenging to attract and retain customers. Additionally, as a ride-hailing operator, you will have to deal with safety concerns from riders and drivers, which can be challenging.
Dependence on technology
Ride-hailing businesses rely heavily on technology, which can be both a blessing and a curse. While technology has made it easier to connect riders with drivers and manage your business operations, it also means that any technical glitch can disrupt your operations.
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For instance, if your app is down or your website is experiencing technical difficulties, you may not be able to connect with customers or manage your business effectively. This can lead to lost revenue and might damage your reputation.
Legal liability
As a ride-hailing operator, you will have to deal with legal liability issues, which can be challenging and costly. For instance, if one of your drivers gets into an accident, you may be held liable for any damages or injuries that occur.
Similarly, you may also be held liable if a customer is injured while using your services. Such liabilities can be costly, and you may need to hire legal counsel to help you navigate the legal landscape.
Bottom Line
In conclusion, while the ride-hailing business in Kenya may seem lucrative, there are several reasons why you should reconsider venturing into it. The market is highly saturated, the operation costs are high, the regulatory environment is unpredictable, and there are safety concerns, legal liabilities, and dependence on technology.
