400 Nairobi Matatus have unveiled a new matatu system just weeks after the government initiated changes in the sector.
The matatus from various Saccos in Nairobi's Eastlands area signed a deal with Safaricom to offer an M-Pesa fare collection solution to commuters in Nairobi.
Saccos that entered the partnership on Thursday, February 4, include Forward Travelers whose 70 vehicles ply Juja Road, Kangundo Road and Malaa Routes.
Safaricom was part of the 29 companies that were awarded a tender by the state to develop an app that can be used to implement a cashless matatu system countrywide.
“M-PESA is increasingly becoming a preferred way to pay and collect fare for commuters and matatus. It has therefore become necessary to partner with the matatu sector to provide them with solutions that make it easy to collect and reconcile payments empowering them to efficiently run their businesses,” noted Safaricom CEO Peter Ndegwa.
The service is powered by Simple Fare, a mobile and financial integration technology developed by Netcen Interactives.
Simple Fare provides matatu owners with a daily report on fares collected and enables the withdrawal of funds to their M-PESA accounts. The service works across all phones and is equally available on an online portal.
On Tuesday, January 5, the National Transport and Safety Authority (NTSA) licensed 29 companies to develop software that will transform the industry into a fully cashless system.
The development was in line with NTSA's plan to abolish the use of cash on all matatus in the country.
The other licensed companies included Kenya Commercial Bank (KCB) and NCBA which were tasked with creating the software as well as web applications to regulate the Ksh420 billion industry.
The industry is estimated to have over 200,000 vehicles.
This is the second time the state has attempted to introduce a cashless system in the matatu industry after the first trial in November 2014.
At the time, the launch was largely opposed by the matatu operators who claimed that the system was only aimed at monitoring the transport system for taxation purposes.
The state, however, argued that the system was aimed at kicking out cartels that have infiltrated the industry as well as curb employee fraud.
