What Entrepreneurs Can Learn from SGR Blow as Bus Operators Move to TZ, Uganda

In Inspiration, Success
SGR Station and Mtito Wandei

Innovation is not a one major breakthrough invention but a constant and daily effort towards doing things better, faster and cheaper.

Buses ferrying passengers from Nairobi to Mombasa route are experiencing losses after the introduction of the new passenger Standard Gauge Railway train service dubbed Madaraka Express.

The bus operators say they have lost close to 40 percent of their business to the train service that is now ferrying about 3000 passengers daily between Nairobi and Mombasa.

Chania Special Bus Company Accounts Manager James Makau told Capital FM Business that they have had to lower their fares to Sh700 from over Sh1, 000 in a bid to compete with the passenger train.

“We have decided to lower our charges and match those of the SGR. A time like this last year, we were charging Sh900 to Sh1,000, and the price of fuel is still the same. Overall the net income has gone down,” Makau said.

Shock on their face

Bus companies have at least been informed a few years in advance that the rail line is coming however long it takes. The shock on their face however shows that they had not planned for it. When you don’t show up in the morning looking for a new way of doing things, then your company is getting ready to die on the line.

The newspaper industry, the banking sector which are all being transformed by the internet are a testament to this. The taxi industry has already been transformed thanks to sacked CEO and founder of Uber Travis Kalanich. Many other seismic shifts and are happening.

This means that every company must innovate on a daily basis. Innovation is not just one a major invention but a daily activity. That is the difference between Google and Yahoo. Google has never settled, its always experimenting on everything including driver-less cars, flying cars, internet balloons etc.

Other operators have resulted in job cuts as they seek to stay afloat just as banks and media companies are doing.

Not making enough money

“Business has really gone down since the introduction of the SGR. Our company has had to fire people as it is currently not making enough money to sustain a huge workforce,” Hassan Hamisi, an operator at the Classic Bus Company said.

Hamisi added that the company has had days when it does not have any meaningful business, and when it does, it barely has a full house.

Some bus owners have had to adjust their operations and look elsewhere for business, as is the case for Chania and other companies. A source at Nairobi’s Tea room bus stop told Capital Business that some bus owners have bought new number plates and moved to Tanzania and Uganda.

There, however, were respondents who said that the introduction of the SGR has not affected their operations.

READ: Kenya Railways Buses to Shuttle SGR Users to CBD

“Many people say that we have been affected but for us, nothing has changed. A majority of our loyal customers come to us because of our service offering,” Bwana Rashid, an operator at Tahmeed Bus Company said.

The SGR has found favour upon many travelers having ferried 7,000 people in its first week of operations, and 75,000 passengers in its first month of operations.


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