Running out of Data: Apps Struggle in Kampala
By Kalungi James
As boda bodas have taken over much of Uganda’s roadways over the years, causing widespread concern several boda boda apps have emerged, aiming to corner a market on digital ride-hailing and provide a more convenient and safe alternative to traditional hailing methods. While SafeBoda is by far the best known and most successful, international companies including Uber and Bolt (formerly known as Taxify) continue to operate, while a host of others have since joined, including YellowBird, Dial Jack, Lolo, PicMe, Mak Boda, SmartCabs, Sot Boda, and most recently Faras.
However, the boda boda app business in Kampala has proven to be a challenging endeavor, with many apps failing to sustain their operations. Today you may see hundreds of Bodas wearing reflector jackets and helmets branded with the name and logo of a new Boda app company on the streets of the city, and a few months later they will start to phase out, their fading jackets outlasting their digital existence. Around half of the drivers who have joined apps in Kampala have left them. It is a tough business: several apps have disappeared from market, overcome by fierce competition, riders independent mindsets, limited smartphone penetration, inadequate digital literacy, and the difficult balance of acting as fare negotiator between rider and passenger.
The streets are hot
One of the primary challenges faced by boda boda apps in Kampala is the fierce competition in the market with both fellow apps and regular boda riders. The success of SafeBoda initially encouraged ride-hailing giants like Uber and Taxify to join the market, which in turn has attracted hungry entrepreneurs to venture into boda boda apps. As a result, the market has become saturated with various apps, making it difficult for new entrants to gain a significant market share.
Competition from traditional boda bodas is a major challenge to the apps. Boda bodas have been a popular mode of transportation in Kampala for years, and many people are accustomed to hailing them directly on the street, either from stages, stopping lubyanzas, or accessing bodas they are familiar with through phone calls. Convincing customers to switch to boda boda apps is very difficult because many hailers have developed a perception that traditional methods are more convenient and/ or cheaper.
Established in late 2020, SOT Boda (Sagula Online Transporters Boda) was the first ever locally owned Boda digital platform in Uganda — but it put its operations on hold after less than a year in business. A SOT official who preferred to remain anonymous revealed to Lubyanza that one of the major challenges they faced before putting their operations on hold was a failure to get enough hailers (passengers) to install and use the SOT Boda app.
“A few people who tried to install our app were not using it to request for rides, disappointing drivers who ended up un-installing the app,” they said. They also revealed that most people would tell them that requesting for rides through the app was time consuming, compared to just getting a boda rider from the neighborhood.
Riders independence
Another challenge faced by boda boda apps is the informal nature of the industry: the motorcycle taxi industry in Kampala is largely informal characterized by free entry, while most riders operate independently without affiliation to any company. This makes it difficult for boda boda apps to establish a consistent and reliable network of drivers. “I bought my bike after saving money for seven years while working as a security guard with one of the security companies in Kampala, I don’t want some one to think for me while doing my boda job,” said Magandazi Emmanuel, a lubyanza rider who has never used any boda app since he joined the boda boda industry in 2017.
Boda ride-hailing apps usually decide on the price of the trip, which makes them negotiators or middle-men in a commercial exchange. This puts them in the difficult position of trying to balance the fare to favor both the passengers and the drivers. Drivers would always look at profit maximization, while passengers aim to reduce expenditure on transport. When the fare is too high, passengers will opt for other app companies or traditional methods — but when the fare is too low, drivers also react negatively especially if at the end of the day they count less profits.
“I can’t use the apps because actually I can still bargain with the passenger and get paid the exact amount or more than what the app would charge,” said Kizito Moses a Boda rider at Mulindwa road stage — Namungoona (Rubaga division in Kampala), “and I still enjoy more profits since am not charged any commission,” he added. This was a widespread perspective: during the July 2023 Quarterly Boda Survey, Lubyanza found out that over 40% of boda riders in Kampala who left the apps did so because they felt they could earn more offline.
Kabiliiti are enough
Another key obstacle for these companies is limited smartphone penetration: while smartphone usage is increasing in Uganda, it is still relatively low compared to other countries. This limits the potential customer base and drivers for boda boda apps, as many people do not have access to smartphones or the internet required. Recent findings by Lubyanza show that only about 43% of boda riders in Kampala have smartphones. Simultaneously, of the riders who have left apps, 15% did so because they lost their smart phones.
“I like using the SafeBoda app but I lost my smartphone and the ones that they give out on loan at the SafeBoda Academy are very expensive,” said Muhwezi Francis, a boda rider at Namungoona roundabout boda stage. “I will save till I buy a new smartphone and re-install the app,” he added. A major app in Uganda sells Samsung AO3 smartphones to riders who use their app where one has to pay an upfront of UGX 100,000/= and the balance is deducted from the driver’s account in installments of UGX 2,000/= daily. As with much of the asset financing trend currently picking up in Uganda and elsewhere in Africa, the total cost of these smartphones acquired on loan is around UGX 809,150/= ($217) yet the market price of a new Samsung AO3 in Kampala is shs. 500,000/= ($134).
However, even among smartphone users, digital literacy is limited. This makes it challenging for boda boda apps to onboard new users and ensure they can effectively use the app to request rides.
“Sincerely I don’t know how those boda digital platforms work, do I have to contact the company and they send me a rider?” asked Kintu Vincent, a tailor in Namungoona. He often uses boda bodas while moving around the city to purchase stock and make deliveries to his clients, yet he seemed to be unaware about how boda apps really work.
The cost of an app
Despite their simple outward appearance, running boda apps can be very costly as they have to pay for customer service, bonuses to get people interested, staff salaries, and much more. Companies charge commission from drivers — typically between 10–25% of each trip earnings — to sustain their operations, yet this directly affects the transport fares, hence affecting either the drivers or passengers negatively. If drivers feel they are not earning enough, or passengers feel they are paying too much, they decide to choose other options. Josephine Namukasa — a former employee at Smart Cabs Uganda, a defunct boda boda app, told Lubyanza that data management teams and software engineers are very expensive to hire since Uganda has very few experts in these fields.
Despite these challenges, some boda boda apps have managed to establish a presence and still thrive in the nation’s capital. Though it has registered a downturn since 2020, SafeBoda is one of the apps that have withstood the storm and gained popularity and trust since it’s inception in 2014. However, the overall growth and success of boda boda apps in the city remains limited, and in a sign of their difficulty in becoming profitable, SafeBoda company is now heavily promoting their SafeCar — where they can make around five times more from a trip as on a boda.
