E-ticketing pays off for Rwanda's public transport operators

Wednesday July 12 2017

The three bus companies that were contracted to

The three bus companies that were contracted to transport passengers in the city now hope electronic ticketing will plug one of the revenue leakages. PHOTO | CYRIL NDEGEYA | NATION 

KABONA ESIARA
By KABONA ESIARA
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Rwanda public transport operators are seeing early gains from electronic ticketing even as automated fare settlement leaves hundreds unemployed.

Fleet owners have in the past found difficulties realising revenue targets due to a combination of high operating expenses and revenues leakages to their crews.

After the entire city commuter fleet switched to the automated payment system however, owners are reporting a 50 per cent increase in daily revenues.

“Before we switched to the smartcard system, the drivers used to bring Rwf25,000 ($297) to Rwf30,000 ($357) daily.

We are now getting the targeted Rwf50,000 ($595) per commuter bus per day,” said Bishop Kihangire, the head of operations, Rwanda Federation of Transport Co-operatives.

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His colleague Deo Muvunyi, the manager for Kigali Bus Services (KBS), which pioneered the card system in Kigali, said loss of revenue was a common problem among operators because money went through many hands — the conductor, driver and the company accountant.

Big fleet operators blame the revenue leaks on collusion between the conductors, drivers and accountants, making it hard for them to pay bank loans.

Coupled with high operational costs, the revenue leaks were exacting a heavy toll, sending many into bankruptcy, explaining the high number of public transport companies that fold yearly.

“Even operators with big fleets in the city are struggling. The pressure from government to be on the road all the time, adhere to the contractual obligations imposes high cost,” said Kahangire.

The three bus companies that were contracted to transport passengers in the city have to maintain a specific number of buses on each route, not wait beyond five minutes at each stop and work even during off peak hours. But they now hope electronic ticketing will plug one of the leakages.

The smart cards and machines were developed by Kigali startup AC Group, a technology company that specialises in smart transport solutions. Under the smart card system, the money passengers load on their cards does not get to operators directly.

It is banked in an escrow account monitored by both AC Group and the operators before it is distributed according to the number of passengers. AC Group, the system vendor, earns five per cent commission off the gross revenue collection per bus.

The development has however come at the expense of conductors who have now been rendered jobless. The Rwanda Federation of Transport Co-operatives, the biggest operator laid off about 300 conductors.

“We had 300 conductors. All of them have been laid off. The buses are now fitted with the smart card systems,” said Bishop Kihangire, head of operations at Rwanda Co-operative Transport Federation (RFTC).

Other operators in the city, including Kigali Bus Services (KBS) with about 100 operational buses and Royal Express Ltd, with the same number of buses, have also laid off conductors and are now using the smart card system.

Combined, KBS and Royal Express were employing an estimated 300 conductors on the city routes.

Rwanda Today has learnt other commuter bus operators on secondary roots outside Kigali also plan to switch to the smart card system which could see more conductors in the country lose jobs.

While the exact number of conductors in the country is not known, statistics from Rwanda Utilities Regulatory Agency (RURA) shows at least 3,300 vehicles operating in public transport across the country.