I’ve always wondered how thousands of cab drivers organize themselves in a chaotic place like the Nairobi Central Business District. So I did a small research on my own. The sample size is 1, David my awesome cab-driver.
The story is that if you want to be a cab driver anywhere in town you must become a member of the taxi-drivers association in charge of that area. The association where David works controls the Nakumatt Lifestyle area, the Tuskys Supermarket area (that’s where David is always parked) and the street in front of Uchumi supermarket. Membership comes at a cost of 5000 KSh per year (about $60).
For the first three years, you are obliged to rent a car from the association at a fixed cost of 1500KSh per day (about $20) and a variable cost based on mileage. You cannot own the car you use for work. This means that some rental cars are available only at night time, others only during the day time. David prefers the daytime shift but for more than two years he was forced to work at night -all the cars were already taken during the day. Only a couple of months ago he was able to change, but he says that “traffic is horrible” during the day. So sometimes he works both day and night.
If you’ve been loyal to the association, after three years you become a senior member and you’re allowed to buy your own car. The cost for a car in Kenya is very high – second hand cars go from KSh 400,000 to 600.000 (about $5000 to $7000). And that is for a 10-years old basic model. You can easily spend KSh 1 million ($12,000) if you want a slightly newer or fancier car. If you own more than one car, you can rent one of them to the association’s junior members.
Owning your car instead of renting it means higher profits, as well as higher risks and maintenance costs. Most people would rather own their vehicle anyway, but only a few are able to obtain a bank loan or borrow from family or friends. David will become a senior member in 6 months and his plan is apply for a loan at Equity bank and buy a Toyota for about KSh 450,00. He says that Toyota cars never break and spare parts are cheaper and easier to find in Nairobi. His main worry is that he’ll get carjacked again.