Little cab business in Kenya

[Roland.O]

Transport is a major economic activity in Kenya and besides the positive return on investment, it employs thousands of people. Given the chaotic nature of public transport in Kenya and more so in urban transport, many people are turning away from the madness of matatus to more sober alternative means of transport .

We have seen the rapid emergence of technology driven companies such as Uber, Bolt(Taxify), Little cab who are tapping into this lucrative market. For the technology to work, they obviously need cars and for that, they have to partner with private entities. Part of being savvy is buying the right car that will give you the best service and highest return on investment. This is a purely business decision and you need to remove your personal preferences from it.

How to start the business

1. Develop a strategy - Starting any business is a recipe for failure and Little cab business is no different. Before starting the business, set out your short term and long term goals. This will include things like how to finance the business(seed capital) and long term growth plans(expansion)
2. How to Finance the business - You will need capital to buy a car or cars and this is the most crucial part of the business. Whether from personal savings or loan, capital is an important ingredient and without it, you cannot start. Start small and avoid over-exposure to debt - only go for what you can manage.
3. Get a trusted driver - If you plan to employ or partner with a driver, then trust is key otherwise you will be investing for someone else to reap from you.
4. Etiquette - Little cab is a hospitality business and the etiquette of the driver determines the long term success of the business. The driver must be presentable, polite, eloquent, clean and intelligent. This factors determine good rating from customers and the better rated drivers get more customers.
5. Expand the business - If you need to build a fairly profitable business, you need to own a fleet of cars. Plan to scale your business as you gain experience.

The major things to consider when buying a car for Little cab business are;

1. Fuel Efficiency - It needs to be as fuel efficient as possible. More fuel savings translate to more profit. Find here our List of 10 most fuel efficient cars to buy in Kenya
2. Affordable to buy - You need to keep your cost of investment low so go for affordable cars
3. Cheap to maintain - Consider things like the cost of spares parts, availability of mechanics and frequency of service. This needs to be kept as minimum as possible without compromising on the quality of the car.
4. Reliability - Look for the most reliable car, some cars are more reliable than others so you need to choose wisely. This is an important factor that will determine whether the business will turn a profit or not. Some investors never turn a profit due to unreliable cars that break down more frequently.
5. Resale value - This is very important because as a business you need your asset to hold as much value as possible over time. You also need a car that you can sell quickly in case you need to upgrade or pivot to another venture.
6. Adaptability - The car needs to be adaptable for various uses such as a family car on weekends and for long distance travel.

If you have any questions or comments, feel free to share in the thread below.