Taxi Business In Kenya

 

Here’s a detailed guide about starting and running a taxi business in Kenya 

1. Market Overview

  • Kenya has a fast-growing urban population (especially Nairobi, Mombasa, Kisumu, Nakuru, Eldoret) with high demand for transport.
  • Smartphone penetration is strong → fueling e-hailing growth (Uber, Bolt, Little Cab, inDriver).
  • Traditional taxis still thrive at airports, bus stations, and rural towns where apps are less common.

2. Business Models

  1. Traditional Taxi (Stand/Street Pick-ups):
  • Operates at taxi ranks, malls, airports, hotels.
  • Requires strong networking with hotels, tour companies, and local businesses.
  1. E-Hailing Taxi (App-based):
  • Partner with apps like Uber, Bolt, Little Cab, inDriver.
  • Offers flexibility and access to more customers.
  1. Hybrid Model:
  • Register with an app + have your own local base.
  • Reduces dependence on one platform.
  1. Fleet Management (Own + Hire Drivers):
  • Buy multiple cars and lease them to drivers on weekly/daily targets.

3. Licensing & Legal Requirements in Kenya

  • Register the business with Business Registration Service (BRS).
  • Vehicle licensing:
  • PSV (Public Service Vehicle) license from NTSA.
  • PSV insurance cover.
  • Road Service License (RSL).
  • Driver requirements:
  • Valid driving license (Class B or higher).
  • NTSA PSV badge.

4. Vehicle Requirements

  • Popular models: Toyota Axio, Fielder, Vitz, Probox, Sienta, Honda Fit, Nissan Note.
  • For premium services: Toyota Premio, Noah/Voxy, or luxury cars.
  • Fuel efficiency is crucial due to high fuel costs.

5. Costs Breakdown (Estimates in KES)

  • Car purchase:
  • Used Toyota Vitz/Nissan Note — KSh 700,000–1.2M
  • Toyota Axio/Fielder — KSh 1.2M–1.8M
  • Licensing & permits: KSh 15,000–30,000 annually.
  • Insurance (PSV): KSh 70,000–120,000 per year.
  • Maintenance & fuel: KSh 25,000–50,000 monthly (varies with usage).

6. Earnings & Revenue

  • App drivers:
  • Daily gross: KSh 3,000–7,000 (before fuel/commission).
  • Monthly net (after expenses): KSh 40,000–80,000 (1 car).
  • Fleet owners:
  • Drivers usually remit KSh 2,000–3,500 per day.
  • 5 cars can generate KSh 250K+ per month (net depends on costs).

7. Challenges

  • High fuel costs.
  • Competition from boda bodas (motorbike taxis) and matatus.
  • Price wars in e-hailing apps.
  • Regulatory changes from NTSA.
  • Car maintenance & driver accountability (for fleets).

8. Success Tips

✅ Choose fuel-efficient cars.
 ✅ Diversify — use apps + physical taxi stands.
 ✅ Network with hotels, airports, tour operators.
 ✅ Consider branding your taxi for visibility.
 ✅ For fleets, install tracking systems to monitor drivers.

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