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XINHUA NEWS SERVICE REPORTS FROM THE AFRICAN CONTINENT

 

Kenya motorcycle taxi operators decry
proposed mandatory Insurance Cover

by Robert Manyara NAKURU (Xinhua) -- Kenya’s fast growing motorcycle taxi (boda boda) industry, which has become an easier means of income for thousands of unemployed youth, would be shaken should the government proceed with the introduction of a proposed third-party insurance cover, operators say.

Henry Rotich, cabinet secretary for National Treasury and Planning, during his budget presentation in parliament on June 13, proposed amendment of Insurance Motor Vehicle Third Party Risks Act to introduce a new regulation that all motorcycle taxis take a scheme that insures against damage to their motorbikes or injuries of passengers and pedestrians during an accident.

This means that boda boda operators would spend about 7,000 Kenyan shillings (70 U.S. dollars) more annually to subscribe to the cover, bringing the total to as much as 130 dollars, some boda boda owners told Xinhua on Thursday.

Cliff Nyakundi, a motorcycle taxi operator in Nakuru town, said implementation of the policy would eat into his savings as the business becomes unpredictable considering the rising number of youth joining the industry.

"I hope the government will consult us before it tables the amendment in Parliament," he said.

"Nowadays the competition for customers is stiff.

"You are lucky if you make a profit of eight dollars a day," said Nyakundi, who joined the industry in 2010.

"The insurance cover should not be punitive.

"It should be affordable to all of us.

"We are also paying monthly taxes to the county government," he said.

"For boda boda, 120 dollars is a lot of money."

Douglas Omuse, who operates a hired motorbike taxi, said he is not sure if he would continue with the business if the government indeed implement the proposed policy, adding that his earning has been falling in the past year as more motorcycle taxis appear on the roads.

"In 2018, I would work from dawn to dusk and make 30 dollars because there was a high demand of my services from parents taking their kids to school and grocers picking vegetables from the main market in Nakuru town," he said.

"But these days, we are many and located almost in every corner of this town.

"Making 10 dollars a day takes a lot of effort."

Every day, Omuse said, he has to give the owner of the motorbike three dollars for using the taxi, a target that proves challenging during the rainy season as passengers prefer covered tricycle taxis (tuk tuks).

"Sometimes you are forced to pay the owner from the savings, then try to recover the losses by working long hours when it’s not raining," he said.

"I would rather look for a job in Uganda than work without much profit, should the policy come to effect and the owner increases the daily returns to five or six dollars," Omuse said.

Tom Nyamache, an economist, sees the government’s proposition as a viable means of boosting its revenue, considering the attractiveness of the business among the many unemployed youth.

The sector now employs more than 500,000 people, most of them young people, generating a revenue of about 21 million dollars in direct taxes to the National Treasury and Planning, according to the Motorcycle Assemblers Association of Kenya.

"The business is highly unregulated in Kenya and introducing the insurance would be one way of streamlining it while earning the government a revenue," Nyamache said.

It is important that the government consider subsidizing the insurance for the youth who are starting off the business and are unable to secure the insurance, he said.

             

 

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