Wednesday, July 23, 2014

Kenya: Google's Move to Replace Cash With Transit Cards is a Bad Idea. Here's Why.

A matatu in Runda, Nairobi. (c) Jonathan Harris, 2009.
In a classic Jeff Gettleman piece (i.e. one with lots of color, for better or worse*), last Tuesday's NYT featured a story on Google's attempt to replace Kenya's cash-based transport sector (an informal, semi-regulated and privately owned bus [matatu]) system  with a prepaid card system. The cards, which are connected to a Google payment system called BebaPay and tied to the Android operating system, can be preloaded with a cash value and used to pay for bus rides in Nairobi and beyond. The user pre-loads the card at an Equity Bank location, via M-Pesa somehow, or kiosk (though this might be expanded soon) and shows it to the conductor, who scans the card using his (sorry to gender this, but it's more than likely a man) Android phone and BebaPay app to collect the payment. 

There are a few reasons why this sort of program might be attractive.

1) Ease of transaction: who likes having to carry around all that cash? Kenya already has potential for a cashless economy with the ubiquity of mobile phones and m-pesa. (A recent article in Businessweek exaggerates the extent to which you can use it, but it makes it obvious that there is plenty of opportunity there).Why not push ahead and make the technological leap?

2) Cut down on corruption: Matatu riders complain about drivers and conductors jacking up prices for riders based on appearance, time of day, weather, and the like. There's also a persistent concern about crime and the organized crime groups that control some parts of the matatu sector, including mungiki. Paying conductors or drivers a set rate would prevent ripoffs and hostage-taking that happens when corruption and crime rule.

3) Allow the government to access data collected by Google. Learning frequency of ridership and route use has obvious benefits for transportation planning. In theory, it will also allow the government to more easily collect taxes to pay for road maintenance.

OK, great. So what's the problem? If you've ever lived in Kenya, you probably reacted to this with a mix of, "What?" "Hilarious." "No way." and deep suspicion.

First, it's not likely to make riding matatus all that much easier. As the article mentions, matatus are privately owned and operated and only loosely publicly regulated. The extent of public regulation really only extends as far as traffic laws (which are applied arbitrarily, in my experience). It will be nearly impossible to get all owner/operators on board. And on the customer/UX end, riders will have to go out of their way to get another card to top up at select entities--so far, it looks like the main retailer is Equity Bank and affiliates. Google seems to forget that people need to ride a bus and walk to get to these outlets. It's a pain. If they want to build their own e-payment service to compete with M-Pesa, at least make it incredibly easy to top up and use. **EDIT: It looks like you can use M-Pesa to top up your card. I still think it's a hassle to have to buy a separate card, but this is a little better than I imagined on first read.

In terms of regulating the wild west of crime and corruption in Kenya's transit sector, what's to stop operators from asking for more in cash? It's still off the books, and Kenya, despite reports to the contrary, is still very much a cash economy. The police are in on the corruption--particularly in traffic situations--so it seems even more unlikely that a card payment system will fix those problems as long as you can still give a cop kitu kidogo or, you know, a little chai.

Finally, and perhaps more importantly, even though the matatu system is dysfunctional in many ways and clearly needs some sort of regulation and improvement**, it seems shortsighted to turn over the keys to regulation to a private company headquartered overseas. Here, Google could be acting like a foreign government providing aid--they want to collect the data, create a market and products that fit the data and are therefore irresistible because they are necessary, and then, presumably, resell that product back to the government that needs them most. Only in this case, they are operating without the government entirely because the system is already privatized.

As much as one can rightly criticize the Kenyan government for its many shortcomings, corruption, shortsightedness, and the like, setting up a system that perpetuates operation by and large outside of government control solidifies the privatized system and prevents any future good government from regulating the transport sector properly. A vote of no confidence in the Kenyan government is one thing--but stopping the much needed process of government regulation in the longer term is odious.

The technology and its potential to make life easier is tempting and exciting. But the libertarian-tinged ethos--and arrogance--of Silicon Valley can be a destructive force both at home and in the developing world.

* It's hard for me to avoid a little meta-commentary on Gettleman's word choice because his tendency toward verbal excess is nothing new. See, e.g. "[M]ost Rwandans are still peasants swinging muddy hoes," and the hyperbolic opener, "the battle for Kenya’s future may come down to Hitler versus Google." There's a reason my reporter buddy and I used to call him Jeff "crushed skulls" Gettleman. Feb 2, 2009: "[T]he Lord’s Resistance Army has machine guns, mortar bombs and a penchant for crushing skulls." Feb 6, 2009: "The Lord’s Resistance Army is now on the loose, moving from village to village, seemingly unhindered, leaving a wake of scorched huts and crushed skulls." And this quotation from his piece in Lapham's Quaterly: "At least there was still Nairobi, home to those Internet startups and investment banks housed in gleaming skyscrapers. But when I returned home, corpses with crushed skulls were sprawled in the street not far from the leafy reaches where I live." Oh, then there's his "Africa's Forever Wars" piece...(see commentary in the (still) fabulous Wronging Rights blog.)

**As far as orderliness goes, other countries in the region are worse. I remember on one of my first visits to Kenya after living in Tanzania for a year being completely shocked at how people actually formed queues to get on the bus. In Dar es Salaam, you might have to jump on through a back window to get a seat. No such thing as a queue!


Anonymous said...

OMG! The Jeff quotes were great! I had forgotten how hyperbolic he can be. Crushed skulls, indeed!

Interesting to know that Google is reaching into this sector in Kenya. I think they need to spend some actual time riding matatus and living in Nairobi to get a better handle on how their system needs to operate effectively.

Finally, yes, the dala dalas in Dar are the wild west compared to the matatus in Nairobi. While trying to board one time, my feet actually left the ground and I was swept inside the bus by a veritable tide of humanity. Chizi kabisa!

Anonymous said...

My other favorite Gettleman quote from the article: "flitting in and out of traffic like a bunch of fleas on methamphetamines." This is his description of the matatus.

I wonder if the editors back in New York receiving his cables look at this stuff and kind of give him a pass, figuring that he's been out running around the bush for so many years, and has maybe had malaria one too many times or indulges in chewing too much khat? How else do you explain this?

bankelele said...

Matatu owners will embrace it as it make them first in line to get daily cash, as opposed to no 5 or 6 at the end of the day
- If Safaricom Mpesa want a piece of this, they will have to come up with something NFC like Google/Equity