After capturing most of the market in the tiny east African nation of Rwanda with his ride-hailing app, Canadian expat Barrett Nash was looking for the next opportunity. He found it next door – a vast, untapped market in the Democratic Republic of Congo.
Tech startups such as Mr. Nash’s have been picking up speed throughout Africa in recent years as smartphone penetration grows rapidly in the continent. But the Democratic Republic of the Congo has been largely ignored, mostly due to an unstable political climate, high crime and low smartphone use.
Mr. Nash, along with Kenyan co-founder Peter Kariuki, believe that expanding their app to Kinshasa is worth the challenge because of the lack of any competition. That isn’t the case in cities such as Nairobi and Dar Es Salaam, where companies such as Uber and other local apps are already established.
The chaos that Mr. Nash describes when he talks about Kinshasa is a very different world from Rwanda, the orderly next-door nation where Safemotos was established. The app is an Uber-like service that uses Rwanda’s ubiquitous motorcycle taxis instead of cars to zip passengers around the city for extremely cheap fares, often as low as $1.
After five years in operation in Kigali, the capital of Rwanda, business has skyrocketed and the company averages 2,500 completed trips every week.
“We always had the concept of Rwanda as a test kitchen,” said Mr. Nash, pointing to Kigali’s well maintained roads, stable government and dependable infrastructure. “Rwanda isn’t where we become successful, it’s where we learn to build a successful company.”
With 150,000 rides completed in 2017, he says SafeMotos needed to expand elsewhere if it wants to continue growing. Kigali is small compared to other African capitals, with a population of just under 900,000 people
But the company raised eyebrows when it chose to expand to Kinshasa.
“When people think ‘Congo,’ they think danger,” said Mr. Nash, who described being laughed at in disbelief by one Nigerian investor.
To understand Kinshasa as an opportunity, one first has to consider its immense size. It has three times the population of Toronto, with only a few aging buses and few taxis.
“If you don’t have a vehicle, you’re basically trapped. You’re either taking really inefficient transit, or you just don’t go anywhere,” said Mr. Nash, who said that rainy weather that lasts for three quarters of the year makes things worse.
“At the end of the day, everything should be manageable as long as people have and spend money. It’s a city of 15 million people with no competition.”
Catalina Ochoa, an urban transport specialist with the World Bank, says that there has been a larger trend of ride hailing in Africa that was originally driven by Uber. But now local companies are pushing the idea further into countries and cities where they better understand local markets.
“We know it has exploded … because we see the valuation of companies soar,” said Ms. Ochoa. “Africa has been one of the last places to take off, but it has done so very strongly.”
Uber currently operates in 15 African cities and large companies such as Kenya’s Safaricom have invested millions of dollars into local ride-hailing ventures.
Ms. Ochario says larger companies like Uber have realized their business model needs tweaking in emerging markets such as African cities. Few people have credit cards so the apps need to accept cash. Access to high-speed data isn’t always reliable, so some apps have a “lite” version that uses much less data.
And unlike North America, where many drivers use Uber as a source of extra income, Ms. Ochario says a ride-hailing service is generally an African driver’s main job.
Underdevelopment of public transportation also means that apps like Uber and Safemotos aren’t just completing sections of a journey or complementing other forms of transportation. It’s often the only form of transportation being used.
In Rwanda, some users would use the SafeMotos app as many as six times a day, using the cheap motorcycles as a way to get to work, then back home, then to the shops and then to a friend’s house. It’s made possible because motorcycle transport is cheap and the country’s economic situation is better than in many neighbouring nations.
But Ms. Ochario says that even cheap motorcycle transportation isn’t sustainable, and public transportation needs to exist for cities to work. “At the end of the day, we need mass public transportation. This is the only way to move a city of millions of people.”
Mr. Nash believes Safemotos could eventually fill such a need. The app will begin with a regular taxi service and then hopes to provide cheaper motorcycle taxi service. In the future, Mr. Nash says it’s possible that his company could offer more transit-like services on large vehicles that travel through preset routes around the city.
For now, testing is only just getting underway, and the company’s first test rides are being undertaken by 30-year-old Paterne Ntambwe, who has been a local taxi driver for five years.
Mr. Ntambwe says the current system of using taxis is difficult, with haggling always an issue.
“Commuting here is really hard unless you own a vehicle or have a regular driver to pick you up every day,” said Mr. Ntambwe.
Mr. Nash said he hopes to start test rides with the public in early September.