'Own your own boda' (motorcycle taxi) empowers Ugandans
A startup helps motorcycle taxi drivers in Kampala, Uganda, buy their bikes, which in turn helps them buy homes, start businesses, and send their kids to school.
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OYOB is currently adding about three bikes a month, Wilkerson says, all from the money it collects from the motorbikes it loans out. The goal is to get to 250, which he admits is a somewhat arbitrary number.Skip to next paragraph
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"But we just want to get to a place where we have to hire multiple new managers," he says. That will ensure they sort out any kinks that remain, at which point they can look into expanding to other cities in East and Central Africa.
The model could also be applied to other vocations, like sewing machines for tailors. Wilkerson says.
The plan doesn't come without critics. Milford Bateman, a freelance consultant on economic development and well-known critic of microfinance programs, says, "The poor are put in a much riskier situation when investing their scarce wealth into buying a taxi, when renting at least means they simply walk away if [there are] any problems."
He adds: "With a rental bike, if demand falls, you can simply hand it back and stop paying. But with an owned bike, you have an asset but nothing to do with it. Its value wastes away, and you lose your investment."
Wilkerson doesn't see demand for boda bodas falling. Indeed, Kampala is a bustling city, and motorcycles are a popular way to navigate the traffic-jammed streets. Plus, he says, OYOB is selecting the cream of the crop of boda boda drivers. It chooses drivers who are not only reliable with their finances ("We've only had one guy we gave a bike to run away with it, and that was a mistake on our part," Wilkerson says) – but are safe drivers, as well.
The OYOB staff has noticed a lack of accidents among loan participants – and boda boda accidents are usually common, Wilkerson says. "But we've only had two, with more than 70 guys who are on the road every day for many hours. That to me suggests that there's either something about our vetting process or about having your own bike that makes you less at risk for accidents."
If demand were to fall, OYOB drivers are likely to stay afloat because they’ve developed loyal customers who will keep calling when they need a ride.
It’s hard not to compare the OYOB formula to microfinance schemes. But, Wilkerson says, "This is better. We're not hoping that someone will be a successful entrepreneur. We're allowing them the means to own their own tools for a job they're already doing.”
The motorcycle itself is a physical asset, so if something does go wrong, the OYOB staff can take it back and give it to someone who will do better.
"At the end of the day, [the drivers] are paying us for the ability to use something they can't afford to buy themselves," Wilkerson says. "We have to invest in people who are willing to work hard for themselves."
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