A
new motor cycle costs about Kshs. 70,000. Operating/ driving the motorcycle require
resilience and determination. It is because of this reason that a good number
of people have opted to outsource the day-to-day operation of the motor cycle.
Teachers
and prison wardens are the main people have mastered the art of investing in boda boda business in Kenya. They purchase the motorcycles using their salary savings and since they
do not have the time to operate
them, they hire them out to riders.
The
hiring out of the motorcycles allows the motorbike owner to reap maximum
returns due to two factors. First, the owner is investing in his/ her time in
another person (the rider) and secondly, the rider and not the owner is the one
who meets the cost of fuel and the cost of buying a license from the county
government.
The
cost of hiring a boda boda is currently at Kshs. 300. Therefore, within a
month, the motorcycle owner makes a total of Kshs. 9,000 per motorcycle. Within
a year, this amount translates to Kshs. 108,000.
The
riders of the boda boda pay an average tax of Kshs. 300 to the county
governments. The owners on the other hand have cushioned themselves against
these taxes by making the agreements with the riders to be informal.
Several
people have grown into major investors in the sector with some having as many
as 20 boda bodas.
In
order for the sector to run, the riders have to make more than Kshs. 300 so
that they can pay the owners. The exact amount that the riders make per day
cannot be quantified easily because there are no standard rates that have been
established in the market. The riders draw their income from a broad range of passengers
and so the amounts of money they make depend on the level of demand and supply
in the market.
How to invest in the
sector
The
boda boda sector is enjoying growth due to the burgeoning demand for quick
transportation within short distances. Anyone can invest in the sector. The sector
is favorable to small investors who can make agreements quickly with the riders
at a personal level. The starting point is to simply buy a boda boda motorcycle
and then watch your investment grow.
Instead
of buying a car at a cost of Kshs. 500,000+ with the intention of using it as a
taxi, you can buy four (4) boda bodas at a total cost of between Kshs. 280,000 –
Kshs. 320,000. Within a year, the 4 motorcycles will have earned you about
Kshs. 432,000.