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How profitable is boda boda business amid fuel crisis?

Mike Ssentongo is living the life. A boda body rider, stationed in the busy and cosmopolitan Kisementi area, Ssentongo cannot be more grateful for choosing the boda boda as a source of financial freedom. 

“On a good day, I can make Shs 70,000 after fueling the bike,” he said, with a sense of pride.

Having spent more than 10 years in the business, Ssentongo says he has registered a lot of success.

“I have managed to purchase three other boda bodas and I have hired youths to generate for me other revenue. I have bought two acres of land back home in the village and a small piece of land in [Wakiso district] where I built my home. I now live with my wife and four children there,” he adds.

Hamson Kawalya is another boda boda rider along Tagore apartments on Tagore Crescent basking in joy.

“I have managed to set up a side business for my wife - a wholesale shop - and through my savings, I pay school fees for my children and cater for their scholastic needs as well.”

He added: “I am currently completing payment of my second land title along Mityana road and also venturing into livestock farming. Currently, I have two cows, four goats and two piglets,” he said.

STARTING OPERATIONS

The boda boda business is one of the most common and lucrative businesses in Uganda. It employs thousands of people. In busy towns such as Kampala, commuters prefer the motorcycle for its ability to navigate through traffic jams and the industry has also gained popularity over time because of the ability to absorb many jobless youths, easing pressure on the government to find employment for its growing population.

The inception and rise of companies such as Safe Boda, Uber, Asaak, and Tugende – all of which are in the boda boda business - have absorbed many youths.

The best motorcycle brands in Uganda suitable for a boda boda business include Boxer, TVs, Dayun, Honda, Yamaha, and Suzuki, with prices ranging from Shs 4.5 million to Shs 7 million.

To get started with the boda boda business, first, locate a suitable place where you can get many customers. Ssentongo says one needs a motorcycle plus a permit or license.

“A brand-new motorcycle now goes for about Shs 4.5 million while a used one will go for about Shs 3 million or less depending on the condition it is in,” he said.

However, for those who cannot raise that whole amount at once, there are ways one can still get a motorcycle and pay on a hire purchase basis. For example, there is Tugende, an asset finance company, specializing in lease-to-own financing for boda bodas.

According to Kawalya, to get a motorcycle from Tugende, one has to raise at least Shs 500,000 and provide the company with personal documents such as a national identity card. The rider is then required to pay a weekly amount agreed on by the two parties until the total amount the motorcycle is worth is exhausted.

However, Kawalya reveals that a motorcycle that would have been bought cheaply ends up being more expensive under such an arrangement. Another alternative of getting to own a motorcycle is through what the riders call ‘Ekisanja.’

In this, a person buys a motorcycle and hands it over to a rider on the condition that the latter cannot take ownership until he completes payment for the motorcycle. The rider is required to make daily payments to the owner of the motorcycle, mainly through depositing money on an agreed account in the bank or mobile money.

CHALLENGES

Few, if any, saw the fuel crisis emerging. The price of fuel, which has nearly doubled over the last 12 months, has greatly impacted the transport industry such as the boda boda.

Since prices tend to remain static within the boda boda industry, the temptation of raising the fees has been met with resistance by customers who have simply shunned the price.

Therefore, many boda bodas have decided to ride through the fuel storm with the option of making less money. The pain that Fred Mugisha, a boda rider based in Kyaliwajjala, is written all over his face.

He complained: “Fuel has become very expensive. Earlier, we used two to three liters at Shs 12,000 to Shs 15,000 or even Shs 10,000. But as of now, three liters costs Shs 20,000 and above. And when it comes to riding, the two or three liters get done before I even make profits, and this situation is quite difficult.”

However, Mugisha added: “For me to be able to survive, I minimize the rides I make in a day. I have learned to [be frugal] on fuel; I no longer ride aimlessly ... When I transport a client to a place, I park there for some time so that I am able to get another client before leaving. I also try to negotiate with my clients and request them to increase the amount of money they pay me.”

Vincent Omara, a boda boda rider at Kira Mulawa Trading center, said they don’t have customers and if they happen to be available, they bargain for low transport fares, leaving them with no choice but to take them to avoid missing the money.

Many boda boda riders are riding their bikes on loans and many of them have been unable to cope with the weekly deposits required of them and the non- payment resulted in the bikes being recalled by the loan companies. This is a very big challenge because many of them are now unable to provide for their families.

Different studies show that Uganda has the highest prices of petrol in the region. And yet, there are other challenges that boda boda riders face. They are considered hooligans partly because they are not organised and ride recklessly. Many customers tend to avoid boda bodas because of this.

This makes many customers shy away from using motorcycles for transport. Also, the business has claimed many lives, while others have gotten severe injuries due to accidents. It is because most riders do not adhere to traffic rules.

“Most boda boda riders are seen as hooligans because of the deeds of a few characters. So, we do not command any respect,” Kawalya said, adding that in case of an accident where a boda boda is involved, he is always perceived to be the one in the wrong whereas sometimes that is not the case.

Mugisha requests that government does something to reduce the price of fuel. He also said that it would be good if spaces for boda bodas are gazetted, where riders can operate without being oppressed. He said they are being arrested and frustrated by soldiers for no reason. And that is a price that many boda boda riders have to pay to stay in business and thrive.

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