How Much Profit Does A Matatu In Kenya Make Per Day?

A matatu business in Kenya is highly profitable. On average, one matatu makes a profit of 3,000 shillings to 5,000 shillings per day. 14-seater matatus generate more profits compared to 11-seater matatus. A 33-seater matatu makes an average profit of up to Sh.10,000 per day. With a trustworthy staff and a well-thought-out business plan, a matatu business will hardly make losses.

Matatu profits usually vary from county to county. A matatu operating in Nairobi county makes an average profit of Sh.4,000-Sh.10,000 per matatu daily. Matatus in Nairobi generates more money due to the high traffic in the city. Matatus in Kisumu and Mombasa County make an average profit of Sh.3,000-Sh.5,000 per matatu daily. The traffic in the two counties is low. Tuk-Tuks and motorbikes have affected matatu business profits in Kisumu and Mombasa County.

Matatu businesses will always be profitable for several reasons, mainly the endless demand for transportation services. Kenyans are always travelling every day to their places of work, school, rural homes, and vacations, among others. Matatu businesses use different ways to make money other than just transporting customers. We have detailedly explained how you can make profits in a matatu business.

Ways A Matatu Business Makes Profits In Kenya

1. Transportation of people

A matatu business makes the most of its profits from transporting people from one point to another. There is a steady demand for matatu transportation in the daily lives of every Kenyan. Adults use matatus to travel to their places of work. Students use matatus to travel to school. Long-distance transportation in Kenya highly depends on matatus. Whether going for a vacation or to rural homes, the mode of transport used is matatu transportation. Travelling by matatus is the most affordable means of transport in Kenya. A matatu business, therefore, always makes profits due to the endless demand for matatu transportation.

2. Delivery of parcels

A matatu business generates a percentage of its profits by delivering parcels. Years back, matatus were not trusted with unsupervised luggage. However, with the introduction of Saccos that regulate matatus, they have become the fastest way to deliver goods. You wrap your parcel tightly and write the person’s address to receive it. You then submit your parcel to the booking office. You write down your contact details and that of the receiver. After that, your parcel is weighed. The heavier your parcel, the more you will be charged. When the parcel reaches the destination, the receiver is contacted to pick it up. Matatus registered to trusted Saccos are the beneficiaries of the profits made from the delivery of parcels.

3. Matatu for hire services

A matatu business makes profits from hiring out their vehicles for private use. There are many occasions where matatus offer their services. Some occasions are funerals, school outings, work outings, wedding ceremonies, and campaigns. These occasions come occasionally, but the cost of hire is higher. Hiring a matatu for a day will make a matatu business equal to or more profits than a typical day.

How To Succeed In A Matatu Business In Kenya

1. Hire professional & trustworthy staff

Making profits in a matatu business depends highly on your staff. You have to interview your staff before hiring them. When interviewing your staff, ensure that they have the proper training. Do a background check to be sure. You should also avoid hiring persons with criminal records. Take a page from the notebook of successful matatu business owners. Mololine (Prestige) matatu company trained untrained drivers and touts before hiring them. Incompetent staff will rip off returns or, to a maximum extent, steal car parts or the car itself. You can monitor the mileage on your vehicle by installing a GPS device. It records the location of a vehicle.

2. Clear all matatu legal regulations

A matatu business has to meet a couple of regulations to be road-worthy. We have a list of the regulations below for you to go through. Follow every regulation to ensure you make maximum profits. Before starting a matatu business, research how the government wants you to operate. Be well-versed in all the documentation you need to own a matatu business. Ignoring government policies will cost you large fines in a court of law. In extreme cases, you can be barred from operating a matatu business.

3. Right choice of car

The right choice of car will help you increase your profit margin. Successful matatu business owners like North Rift Luxury Shuttle have quality cars. The seats are comfortable and well-spaced. They charge relatively higher than their competitors yet still attract more customers. Today, Kenyans prefer quality services to cheaper services. Purchasing quality cars for your matatu will bring in loyal customers. They will spread the word,, and in no time, customers will prefer your matatus.

4. Service your cars regularly

A matatu business needs to service its cars at least once a month to maintain its profits. Servicing a car is important to maintain its workability on the road. A matatu business that interrupts the journey to fix a mechanical problem loses customers gradually. Observing time will bring in more customers because all travelers want to reach the stipulated time. A car that is not serviced regularly may cause road accidents. This is considered the killer of matatu businesses. You will face lawsuits and lose a large number of customers

5. Observe road safety rules and regulations

A matatu business owner should do everything to ensure their drivers follow all safety rules and regulations on the road. Driving carelessly will first lose customers who prefer safety to fast travel. This will end up causing accidents. When your matatus are involved in accidents regularly, your profits will drop. The government must revoke your license to run a matatu business for being unroadworthy.

6. Hold your staff accountable for their actions

A matatu business requires the owner to supervise their staff closely to earn profits. You can do this yourself or hire people to do it for you. It will depend on the scale of your matatu businesses. A matatu business owner should not tolerate the misappropriation of funds and ignorance of government regulations. Such acts should be taken care of with immediate effect. A matatu business owner should fire anyone that does not abide by basic rules. If not taken care of, significant losses are expected in the future.

7. Do not solicit customers

A matatu business should have standard prices and stick to them at all times. A matatu business that raises its prices at its convenience loses a lot of customers. This affects the profit significantly. Customers share their experiences and will know when they are being shortchanged. When raising prices, announce that you are doing so. Give your explanations for doing so, e.g. rise in fuel prices. Having a trustworthy relationship with customers will maintain your profits for generations.

8. Create a means of communication with customers

A successful matatu business has to give the customers a way to reach their offices. In your cars and booking offices, print a number that a customer can reach out to make suggestions. This will be helpful to a matatu business owner to monitor staff more effectively. When a customer is solicited, a matatu owner may never know without offering a means of communication. Drivers that don’t follow road rules and regulations can be held accountable. There is no need to lose customers without knowing the reason. Let your customers know that they can be heard. This way, they won’t walk away but be sure that changes will be made.

Matatu Business Plan

A matatu business involves a lot of requirements. You need a detailed budget plan to make profits in the matatu industry. A profitable matatu business plan should include the following aspects:

1. Staff Salary

A matatu business plan should include the staff salary costs, how many staff will be needed, and the system of picking your staff. A matatu business mainly depends on the staff to operate. The number of staff depends on the scale of your matatu business. You should have enough staff for a matatu business to run smoothly. The following are the staff you need to have a matatu business:

• Drivers
• Drivers.
• Conductors.
• Booking officer.
• Security officers.
• Luggage handlers.

2. Matatu choice of car

When making a matatu business plan, it is essential to know a specific car model that suits the interest of your business. This depends on the number of people you want your matatus to carry. There are 11-seater, 14-seater matatus, and 33-seater matatus, which famous matatu business owners mostly use. Making a matatu business plan, consider your budget. When working with a small budget, there are smaller car options. You can opt for a 7-seater matatu. The most expensive but profitable matatu is the 33-seater matatu. It makes thrice the amount of profit 11-seaters make with just one trip. Below is a table of matatu vehicles alongside what they cost.

Cost Of Matatus In Kenya

Matatu	New Matatu Cost	Second-Hand Matatu Cost
7-seater matatu	Sh.750,000-Sh.1.5 million	Sh. 300,000-Sh. 700,000
11-seater matatu	Sh.1.5 million – Sh.2.5 million	Sh.1 million- Sh.1.5 million
14-seater matatu	Sh.2.5 million-Sh.3 million	Sh.1 million-Sh.1.5 million
33-seater matatu	Sh.4.5 million-Sh. 7 million	Sh.1.5 million-Sh.4.5 million

3. Matatu business legal requirements

Owning a matatu business requires a couple of legal requirements to be allowed to operate. The following legal requirements should be included in your business plan:

• Valid insurance cover – A matatu insurance cover costs Sh.100,000-Sh.500,000 on average. The cost of insurance varies depending on the value of a matatu vehicle.
• Valid inspection insurance certificate. The cost of a matatu inspection insurance cover is Sh.1800-Sh.3500 on average.
• Valid road service license. The cost of a matatu license is Sh.625. The cost of renewing a license is Sh.625. A matatu license takes 7 days to come out after applying.
• Speed governors. The cost of a matatu speed governor is Sh.15,000-Sh.50,000 on average.
• Working safety belts. The cost of a matatu safety belt is, on average,, Sh.500-Sh1,000 per safety belt.
• Valid Sacco registration documents. The cost of registering a matatu Sacco is Sh.2,000-Sh.3,000 on average. The cost of joining a matatu Sacco is Sh.30,000-Sh.500,000 on average. The cost of joining 2NK Sacco is Sh.30,000, while a North Rift Sacco membership costs Sh.100,000-Sh.300,000.
• Music permit. The cost of a matatu music license is Sh.2,000 annually on average. A matatu music license allows matatus to play music legally. KFCB imposed the regulation. On average, failure to obtain a matatu music license will risk a fine of Sh.200,000-Sh.500,000.

4. Fueling costs

A matatu business plan should also include fuel costs. The cost of fuel changes keeps changing as the years go by. A matatu business owner should always know when these changes happen and how they may affect their matatu businesses. The number of vehicles in your business will depend on how much capital you have set aside for fueling them. A good matatu business plan ensures enough money for fuel for every car in your business.

Matatu Business Pimping Costs?

The cost of pimping a matatu is Sh.3,000,000-Sh.6,000.000 on average. The pimping culture will improve your profits when operating a matatu business in Nairobi. Residents in Nairobi prefer pimped matatus. The cost of pimping a matatu will depend on the following:

• Type of art.
• Size of art.
• Paint quality.
• Definition of art. (How clear is the art?)
• Size of car.
• Interior or exterior decoration. (Or both)

Problems Faced By Matatu Operators In Kenya

1. Corruption

The biggest problem matatu businesses face is corruption. Traffic officers have been collecting bribes for a very long time since Jomo Kenyatta introduced matatus in the 80s. The level of corruption on Kenyan roads has only decreased once, in 2002-2003. Shortly afterwards, traffic officers continued collecting bribes. To avoid being a victim of bribery, make sure your matatus are road-worthy and follow all the legal requirements.

2. High cost of fuel

The cost of fuel has kept on rising fast over the years. This has affected matatu business operators greatly. They have to increase transportation costs that the public does not receive well. The main reason is most people have little to no knowledge of fuel prices.

3. Increased competition

Matatu businesses have popped up over the last 10 years due to the lucrative profits in the venture. This, in turn, has affected customer turnout. During long holidays like December, most people do not travel. This is a slow period for matatu operators due to many matatus and few travellers.

4. Traffic jam

Many Kenyans are buying personal cars, which have increased traffic on roads. Matatu operators have a target to meet by the end of the day. With increased traffic, they lose a lot more money than they make. Traffic jams waste fuel because the government requires a car to keep running even when stationary.

5. Poor roads

Matatu operators have had a problem with poor roads. This is a problem faced mainly by matatu business owners in rural areas. It is a problem that has been reduced over the years. The government has improved the quality of highway roads since 2007. Other roads in the interiors are still problematic to access. Matatus have to collect customers from the main roads. This is a disadvantage because, with good roads, they would collect customers from the interiors. This would be a chance for them to make more money.

6. Road insecurity (Carjacking)

Matatu business owners are always at risk of being carjacked when working. Most areas around the main highways, including highways in significant towns, are unoccupied. This makes it easy for a carjacker to attack a matatu without anyone around to help.

7. Distrust between matatu owners and employees (Drivers & Conductors)

Matatu business owners have had a hard time monitoring their staff. Most drivers and conductors break essential road rules and regulations without the owner’s knowledge. The problem of overloading matatus is usually the conductor’s and driver’s doing. They do this to make extra cash on top of the average amount they get paid. This, however, causes a considerable loss when traffic officers notice. They either ask for expensive bribes or take you to court, where you pay a more expensive fine. This is one of the reasons corruption in roads has gone on for so long.

Matatu Business Success Stories

1. North Rift Luxury Shuttle, founded by Mr.Ngigi Kang’ethe

North Rift Luxury Shuttle was established in 2005 under Mr. Ngigi Kang’ethe as the chairman. The company started with only five 11-seater vehicles. The matatu company operates on the Nairobi-North Rift route mainly. Transporting customers from Nairobi to Nakuru, Eldoret, and its final destination is Kitale.

By 2023, the company will have over 200 vehicles registered under its Sacco. They include 11-seater matatus, 64-seater buses, and 30-seater minibuses. North Rift also expanded its routes to some parts of Western, and it is still expanding. The company offers reliable delivery services on top of transportation services.

2. Mololine shuttle owned by Kibera Muchai

Mololine shuttle services were founded in the year 1994 by Kibera Muchai. It began transporting travellers in 1995, with Nakuru as the central terminal. They had a hard time registering due to discriminatory government regulations. They had 14-seater matatus competing against 18-seater matatus. This did not work initially due to their high prices compared to 18-seater matatus. They faced backlash from their competitors due to their mode of operation. They later introduced the ticket system, which other matatu companies adopted. It was a safer and more reliable payment option.

At first, they did not get as many customers as they expected due to their new matatu business strategies. When cases of thievery and car-jacking in matatus grew, customers opted for safety over saving money. Mololine became the only reliable matatu company to travel with. Their profits grew rapidly. The company was the only trusted matatu service for the delivery of parcels in the early 2000s.

3. 2NK Shuttle with Anne Nyawira as the CEO

2NK shuttles are registered under 2NK Sacco, formed by matatu owners from Nyeri in 1994. Its headquarters is at Nyeri. From Nyeri, it transports customers to Nyeri, Nakuru, Eldoret, Karatina, and Thika, among other towns along these routes. It uses 14-seater vans and 11-seater matatus for its services.

2NK Sacco had 30 matatu owners registering when it was established. At the moment, it has over 600 matatus registered to the Sacco. It introduced oil tankers in 2005 to disburse fuel to Sacco’s petrol stations.

Answers To Frequent Matatu Business Questions