Streamlining Public Transport in Kenya: A Commentary

by Wendy Muchai**
The introduction of an e-payment system for the public service vehicles (PSVs) in the transport sector has been an idea embraced by some, for reasons that implementation of such a system could greatly help regulate the matatu industry, including eliminating corruption and facilitating collection of taxes. However, others have been opposed to a cashless system for reasons such as loss of income to matatu crews since no e-ticketing system would be able to take into consideration the informal and ad-hoc revenue-share arrangements between the PSV owners and their crews.

E-transactions and e-payment systems are a great part of the technological advancements and digitization plans happening around the world to ease transportation for the masses. National Transport Safety Authority attempted to introduce a cashless, or ‘cash-lite’ payment system for public transport, but this initiative failed, following slow uptake of prepaid cards by commuters and resistance from PSV operators. Further attempts to stop the adoption of the cashless system have seen parties even seek judicial intervention.
In the case of Republic v National Transport & Safety Authority & 10 others Ex parte James Maina Mugo [2015] eKLR, an application was made to quash Legal notice 75 of 2014 (The National Transport and Safety Authority Operation of Public Service Vehicles (Amendment) Regulations), published in the Kenya Gazette on 11th June 2014, to enable implementation of the cashless system. The arguments in this case were that the so-called ‘cash-lite’ system was unconstitutional and an unlawful overthrow of the subsisting monetary policy for payment of goods and services in Kenya. It was contended that according to Section 3 of the National Payment Systems Act No. 39 of 2011, the Central Bank of Kenya is the statutory and sole entity to designate a payment system, not the Cabinet Secretary for Transport and Infrastructure. Further it was argued that consultations with passengers had not been undertaken and that Parliament had also never approved of the “cash light” PSV fare payment system. This application however, was dismissed by the Court albeit on a technicality since it had been made by way of judicial review, a process only concerned with legality of procedure which in this case was not illegal. The court noted that had the application been presented by way of constitutional petition or in civil proceedings, then the merits of the cash light system could have been actually interrogated.
Attempts to make this new mode of payment a reality may continue to face opposition unless the underlying factors affecting the public transport sector are addressed. This would mean that government regulators would have to dialogue and reach a consensus with stakeholders and operators in the PSV sector. This is mostly because, the scope of involvement for administrative bodies in the business of the PSV operators is limited to licensing and regulation of the conduct of the transport services rendered but not the form adopted or elected by such PSV owners and consumers to make and receive the payments for the services so rendered. In the above case for instance, if the court were to assess the merits of the case regarding implementation of the ‘cash lite’ payment system, it may have been averred that implementation of such a system must follow proper mechanisms as required by law if at all it were to be seamlessly adopted by the PSV sector.
Undoubtedly, the introduction of electronic payments in the PSV sector would require involvement and oversight by Communications Authority (CA) in accordance with section 83C of the Kenya Information and Communications Act. This section makes it a duty of CA to promote and facilitate the efficient delivery of public sector services by means of reliable electronic records and to promote public confidence in the integrity and reliability of electronic records and electronic transactions. CA also has the added responsibility to uphold consumer protection for all commuters using public transport once the electronic payment system has kicked off by ensuring the safeguard of consumer rights.
From the aforegoing it appears that a multi-stakeholder approach is necessary to successfully usher in a working e-payment system for public service vehicles in Kenya. This would require consultation, cooperation and cohesion between all concerned parties. If such a system were to take root in the years ahead, this would be an important milestone towards achieving the country’s Vision 2030 goals.
**Ms. Wendy Muchai is a Bachelor of Laws (LL.B) student at Strathmore University.

  1. Rangeh
    Change is required A healthy post.@Wendie
  2. Alex
    e_payment system for psv would really be a great step in improving the public transport sector. It should be introduced sooner rather than later given it's advantages over the current system.
  3. Caroline kimathi
    Caroline kimathi
    Cashless system is good ,with most people in our country trying to embrace it I guess e system is the way to go ..... Nice peace loved it it has shed more light on the issue
  4. Simon
    e-payment may be good to tame the industry. But is the country -kenya prepared. How is our cybersecurity laws?
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