Taxi drivers story earnings

Taxi drivers

TAKE SOMETIME AND READ WHAT I DISCOVERED ABOUT THE UNTOLD WORLD OF TAXIs/MATATUs IN KAMPALA.

By Henry Mutebe

Forgive me …I am going to use very informal language here. Okay? Alright…so…out of curiosity (the burden of an inquiring mind), I had a wonderful conversation with a taxi driver to understand the matatu/taxi business in Kampala. Initially, I simply wanted to keep the driver awake. Seated next to him, I realized I could do a good job asking and learning a few things from him while helping him keep awake. As we sped through the silence of the night, I engaged him in a conversation that turned out to be a very interesting learning experience about the organisation of taxi drivers and their business. 

I asked him to share with me the Hows, Whys, Whats and Whens of the taxi business and who gets what amount of money. This is what he told me about their organisation, business and dynamics of taxis:
He said that in the old taxi park, each stage has a committee that governs all the drivers, touts/’conductors’, helpers and all those engaged in taxi business. This particular driver plies the Kampala-Iganga route. So he gave me information based on the Iganga stage of Kampala old taxi park. 

How they are organised, the cost of running business and incomes. 
A ‘new’ taxi (reconditioned or first time on Ugandan roads) costs between 50 – 55 million (US $13,000-14300). However, you can also find a good used one at 20-25 million. I am talking about taxis that are in good shape and able to ply long routes.  

Each car is registered on a stage and given a number. On Iganga stage in the old taxi park alone, there are about 122 taxis that ply the Iganga route every single day. Now consider how many other stages are in the old taxi park…some of which are even busier than this particular one.Anyway..lets continue... so apparently, 72 of the taxis on this Iganga stage start their day from Kampala while the 50 start their day from Iganga - Kampala stage. 

Each taxi makes 2 return trips (It goes to Iganga or Kampala, returns and makes another return trip). If you were counting in ordinary language, you would say they make four trips (Kla-Iga,Iga-Kla,Kla-Iga and Iga-Kla or vice versa). 72 taxis start from Kampala in the morning, they each take 14 passengers to Iganga, offload…pick up 14 passengers from Iganga taxi park, return to Kampala and make another similar trip. The same happens for the 50 that start from Iganga. 

Assuming that each of those cars was working, it means that on average, 6,832 passengers travel on this route every single day. This number does not include taxis that do not originate or start their journey from the old taxi park. So the numbers are bigger than this. 

The current fares from Kampala to Iganga (or vice versa) is 9000shs during the day. However, when a taxi is making its last trip from Iganga back to Kampala, it charges 8000shs (1000shs less the day charge…perhaps because of the low volume of passenger at nights). So this means that it makes 126,000shs per trip (i.e 378,000shs for the 3 trips where it charges 9000shs) and 112,000shs for the last trip where it charges 8000hs per passenger. This brings its total gross revenue to 490,000shs per day. 

Costs per day. For most taxis which he said are 3L model, they consume fuel worth 105,000shs per return trip(going to iganga and retunring). He said they consume about 30 litres (less or slightly more). He emphasised that for each trip he consumes 105,000shs in fuel. So since he makes 2 return trips, he spends 210,000shs in fuel per day day. In other costs, every time he parks and passengers board at the Kampala stage, he pays 13,000shs to the stage management. Later, I will tell you where that money goes or what its used for. When he arrives in Iganga and fills his car with the 14 passengers heading to Kla, he is charged 22,000shs at that stage. 

So considering that he parks two times at each of these stages, he spends 70,000shs in stage fees. He then told me something interesting. He says if your taxi is not washed or clean, the stage management cannot allow you to park and get passengers. So the car must be washed every single day. 
He says he pays 12,000shs for washing the taxi every day. 

So if you add the daily expenses, he makes 490,000shs but spends 292,000shs. He remains with a balance of 198,000shs. He spends about 10,000 on lunch. Occasionally, they may get a few hitches where they can spend some little money so he retires home with about 170,000shs daily. If the car is new, he gives the owner 100,000shs per day. If the car is fairly used/'old', the owner earns 80,000shs per day. So he remains with about 70k as his take home.

This money can be remitted to the owner on a daily, weekly or monthly basis. The owner of the car decides. He however told me that most owners prefer the weekly payment plan. This means the owner gets about 700,000shs per week if it’s a new car or 560,000shs a week (for an old car on a long routes like Iganga/Mbale/Jinja..etc). However, the car has to be serviced every after 7 days. Servicing costs 90,000shs. 

He said this is a must according to the stage rules. So it means that on the weekly income of 700k or 560k (whichever the case), the owner has to subtract 90,000shs for servicing the car every week. Also, most owners give the taxi drivers an extra 200,000shs a month or give them one day in a week (meaning the 100k or 80k is retained by the driver) 

In practical terms, if you own a new taxi/matatu, you would earn about 610,000 a week or 2,440,000 a month. Or if it’s an old car but in good condition, you earn 470,000shs a week or 1,880,000Ugx a month. Now you can agree whether to give 200,000shs to the driver every month or to leave him take one's day’s proceeds every week which would be the equivalent of 400,000shs a month (new car) or 320,000shs (if its an old car). The first option makes more business sense. 

So…for a new owner, your final income a month is your gross earnings of 2,440,000 million less 200,000shs for the driver which brings your final income to 2,240,000shs. Or if your car is old, you earn 1,880,000shs less the 200,000shs for the driver…therefore net income for an old car on a long route is 1,680,000shs.

If you bought the new car at 50 million, plus comprehensive insurance of let’s say 1 million shillings, it means it will take you about 2 years to break even. If you bought the old car at 25 million, it means you will break even after about 16 months. Now…every owner has their own bargaining power, you can negotiate with your driver to get more but apparently, this the normal or usual practice. I need to add that from time to time, you may replace tyres or worn out parts. But if you bought a good car, it shldnt be in the garage all the time. One other trick is to combine with a colleague...add up money get a new car...or get two used ones...u break even earlier.

Now…by this time...i was already wowed... after telling me all this, I asked him how much he makes after giving his boss his pay. He said as a minimum, he earns 70,000shs daily. He saves the 20,000shs with a saving group at their stage and takes the 50k home (not all of which is used anyway). So he says every month, he earns about 1,500,000shs on top of  his 600,000shs saving with the stage group. 

He said he finds it funny that people despise drivers yet according to him, they make a descent living. I nodded my head in total agreement. Now am even thinking about all the students with degrees who think they cant do this job. He said there are even taxi drivers with degrees. so next time you see a driver...think twice.

By this time, I was already holding my jaw in awe at the life of a taxi driver. I think a lot of people despise them but they may be making good money compared to many others. He said he has been able to build a house, take his children to school and be buy some assets. 

I was utterly amazed. I asked him who takes the 13,000shs which they pay at the Kampala stage or the 22,000shs at the Iganga stage. He said the Kampala stage has an executive of 12 people. Their work is to plan for that money on behalf of the members. The money is used to help the members (drivers) on that stage when they are in need. 

He gave me some examples. For example, if a driver loses a family member (child/spouse/parent), they (stage group through the exective) contributes 2 million shs towards the funeral expenses. They also buy some extras like 100kgs of posho, 100kgs of rice and a few extra things to help at the burial. Further, if a member/driver gets an accident and dies (as you know the risk involved in their work), the executive gives the family 250,000shs every month for two years to support the family. I refused to believe this...he said...it is very true and real...he has been there for years and seen this happen. I was left in disbelief at this level of organisation.

If a member is struggling with fees, he can come and borrow from the group money. However, he has is not given the cash, the wife of the member/driver brings the child, the executive makes a loan agreement with the driver and they pay the school fees. Note that the executive directly pays the fees. A member of the executive goes to the bank and pays and delivers the bank slip. It does not give the cash to the driver or mother for fear of diverting the money. So they dont want to hear stories of children not going to school because a driver has no money. Apparently the stage management/executive often want to know how the family is doing. If a driver does not come or appear, they make calls to know what is going on or he is well. If he is sick, they contribute to medical expenses until he gets better and returns to work. Amazing stuff.

If a member/driver’s car gets a problem, he can ask for a loan to have it repaired and he pays in instalments at a small interest. Remember since there are about 122 cars on the stage, it means the group has about 3.1 million every day. It means they are collecting and saving over 95 million every month. It is from this money that they loan the members, compensate or contribute to the problems members encounter. 

You must also not forget that most of the drivers are saving about 20,000shs with the saving group each day. So in savings alone, they are collecting another 70 million shillings. I am talking about one stage alone- the Iganga stage. This is what other stage groups are doing although with minor modifications depending on their routes and incomes. 

Apparently, this group has even secured land along Jinja Mukono route to set up a fuel station where members will be buying their fuel to support their business. If 122 taxis of the members are fuelling at this station every day, this would guarantee them 25 million gross incomes from member’s fuel refills alone. This is how far these men we call uneducated are working and thinking. 

The man told me that the money saved by members and level of organisation in the old taxi park so solid that they are even capable of lending to government. He said that earlier on, during UTODA times, a certain group was collecting this money from the stage and disappearing with it. 

However when Mr. Lukwago (the Lord mayor) told them what to do, they realised that they were being robbed and could do a lot more with their money. He said the groups are so organised, they mobilise them on HIV/AIDS, they advise them to stick to their wives…adding that if a wife comes and reports that a husband is not supporting the family, that driver can even be expelled from the stage. They advise them to settle with one wife or if you want more, you officially marry second wife but not have a side dish. They want to know where you are and where you live and what your family is. 

He added that those guys who call or direct people or help to load luggage are paid 5000shs as allowance and another 5000shs for lunch per day. By 1pm, each has been paid their 10k. However, they have to work up to 4pm and then another person comes for the second shift. 

These drivers also a lawyer in case someone is giving them headache. I asked him how the executive is remunerated. He said the committee is composed of 12 members. The chairman of the stage is paid 30k per day, the vice about 25k, and the rest of the committee members earn 15k every day. They have to work and address the issues of the members. If they are doing any business for the group, they are facilitated from the stage financial pool. If a member on the committee is not available to work, they ask someone to stand in for them.

If a driver, for any reason does not have a car/taxi to drive, he can come to the executive to be given a car that may be available to drive. If there is no car but he is available, they give him 10k daily, until his car is back on the road. This is to ensure that their members are supported when they are experiencing difficulty. They do support the members to repair the car because they want to ensure the stage has enough cars. If the cars reduce, the prices shoot up which in convinces passengers…so they have developed mechanisms to encourage members to keep their cars on those particular stages or if they are selling, to first inform the rest of the members just in case any may be interested in buying it. 

Apparently, the executive makes a check on all cars every after 7 days to ensure they are in good health for the road. They check the tyres, breaks and any other critical issues with the car. If they notice anything concerning, they don’t allow it to take passengers. The self-regulation and discipline of the group is utterly amazing. 

The executive maintains and watches over all the members and their cars, they maintain a good relationship between the car owner and the driver and help traffic police to watch over the drivers and safeguard the interests of the passengers. He signed off with a very good question. He asked me, ‘Do you still see taxi men removing their shirts or driving in slippers? If you dare, the stage management/executive…which is by the way composed of our very own colleagues, will deal with you and expel you from the stage.’ 

I asked him why ‘taxi drivers’ give the car owners with unending stories…he said, ‘that is because owners don’t approach stage management. He said if there are proper contracts and understanding between the driver and owner, some of those issues would not arise. He said the key to making business is ensuring that the stage management knows the car owner and can watch over the driver.

That my friend, is the untold world of the men who drive you on the road. They are very organised…very thorough…although we never notice how they operate. He said not a single coin goes missing from the group money because they are hard on each other…and anyone who jokes with their money would be dealt with in hard currency. 

He further said that the key to earning from a taxi is ensuring you go to the stage management and have a good understanding with management so that they know you as the owner of the car…and then they will watch over your driver/employee than simply dealing with the driver without them knowing (though it’s not a requirement). If only government could learn from the organisation of these people…on how to organise its affairs…we would have a lot achieved. Thanks for reading.