Ugandan motorcycle ride-hailing company SafeBoda plans to terminate operations in Kenya at the end of the month, rendering hundreds of motorcycle riders and call centre operators jobless.
In a statement it announced that it will cease operations in Kenya from November 27 after only two years in the country, citing the negative impact of Covid-19 on business.
SafeBoda, however, will continue to operate in Uganda and Nigeria -- a market it entered in May this year.
The Ugandan firm ventured into the Kenyan market in 2018 with operations in Nairobi, expanding to Mombasa last year.
“While Nairobi is seeing some economic recovery from Covid-19, boda transportation has been hit hard. This has meant our business cannot sustainably operate in this environment and unfortunately the timeline for a full recovery is not certain,” said SafeBoda in a statement.
Meanwhile, motorcycle riders are also feeling the pressure of tightened regulations to contain an industry that is largely seen to have gone rogue amidst rising competition that has seen earnings plummet.
Motorcycles emerged as a main means of transport in Africa with a report by TechSci Research showing the two-wheeler market in the continent forecast to cross $9 billion by 2021.
South Africa, Nigeria and Tanzania are the largest two-wheeler markets in Africa, followed by Kenya, Algeria, Uganda, Egypt, Morocco, Angola and Ethiopia.
In Kenya, a taskforce has come up with a report of the challenges in the sector and a raft of recommendations, some of which operators say will increase their cost of doing business.