The government is tapping technology to rein in matatus in a move that may radically change the public transport sector while burdening passengers with increased costs. Regulations published by the National Transport Authority last week say that from July 1 2014, all public service vehicles will be required to use electronic payment systems. "Every operator of licensed public service vehicles shall ensure that passengers are issued with tickets or receipts for fare paid and, as from the 1st July, 2014 , it operates on a cashless fare system," read the regulations in part. MAKING FORAYS The new provisions that will expand the market for tech firms have been making forays into the public transport sector in the last one year. Equity Bank and Google have since April been running BebaPay, a cashless payment system, in Kenyan matatus. Innovators from the Safaricom academy have developed M-Safari, a system which, like BebaPay, also uses Near Field Communication (NFC) technology for payments. Directly, Safaricom may benefit as its Lipa na M-Pesa service expands. Venture capital firm, 88mph, has also invested in BookNow, an online platform for booking and buying bus tickets. The regulations bring into effect the National Transport Authority (NTSA) Act that was passed last year. The Act will also require public transport operators to acquire fleet management systems that will collect data on the speed and location of vehicles at any given moment from February 2014 . With more reliable data, insurance firms may find an easier operating environment. Insurers have often complained of fraud from the matatu sector. However, these changes will have cost implications on both matatu owners and passengers. Implementation will not come cheap and the costs will most likely be passed on to passengers. Further costs are set to be incurred as public transport operators adhere to the rest of the NTSA regulations. The government will now require the sector to provide evidence that all employees are paid regular salaries. This is in contrast to the common practice of paying drivers and conductors on a commission based on the number of trips they make. LIMITED LIABILITY Long distance transport companies will have to hire two drivers for each vehicle and organise regular refreshment breaks for drivers and passengers on long trips. All vehicles will require an NTSA licence before they are allowed to operate. Restrictions that will see licences granted only to limited liability companies and Savings and Credit Cooperatives may also close the market to smaller players.
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