At last, I seem to have figured it out. At last. These five seater saloon cars are matatus. Wannabes, I have always thought, until today.
They carry 7 passengers instead of 4, packing us like bags of beans and bouncing us hard as we make our way up the seven km stretch to my rural home. Why not just buy a real matatu van, or bus, I have been asking. Today, I talked with a former primary school classmate, the owner-driver of one of them as we waited to fill up, and I understood. The reason they carry seven passengers is two-fold: Passengers want to pay the same fare as they’d pay for rides in the bigger vans. So the wannabe has to pack more people in. But the big sister does the same, carrying 18 or 19 passengers instead of the authorised 14. There, the play goes even.
The little guy fills up faster. Passengers like that. There, the big sister can’t compete. So little guy, charging the same fare as the van, becomes the preferred option. No longer a wannabe. She is the real do. She also moves faster, so she keeps winning. As long as she charges the same fare. Which of course she does by packing up seven passengers in the space for 4!
Now the math: The big matatu collects Shs 1,800 per trip (60/- x 18), i.e Shs 154 per km. The little guy collects 420/- per trip, 60/- per km. So who wins here? Depends on how you look at it. The big guy cost Shs 2 million to buy, so at an income stream of Shs 154 per km, she will pay off the investment (only, thinking very simply) after 12,963 km (1,871 journeys of 7 km each on our rough gravel road!). The little guy costs Shs 750,000, so she will pay off the investment after 12,500 km. No big difference. Play goes even – again!
This scenario can, of course, trigger a very interesting debate on those two laws of economics our teachers were trying in vain to drum into our smart heads: the law of demand and supply and the law of diminishing marginal returns… But… ahh… who has time for going back to school mode? Why not just find an even tinier matatu made for one passenger and carry three on it? Or, wait a minute. Isn’t that called a motorbike by another name?
Haron Wachira 