Transport business in Zimbabwe, what is happening? If you analyse the industry you will note some interesting facts.
Here is a brief synopsis
- The NRZ has curtailed its commuter train operations due to lack of capital to replace rails, locomotives and the rolling stock. This has created a huge gap in meeting the commuting needs of Zimbabwean travellers.
- According Ministry of Transport, Zimbabwe has an annual deficit of 500 buses. Bus assembly companies such as Deven, Sub Sahara Buses and AVM Africa are failing to meet the demand for new buses. This is due to lack of long term capital which is needed for retooling and financing packages for clients such as leasehire or hire purchase.
- Zimbabwe United Passenger Company (ZUPCO), the government owned bus operator, is no longer UNITED, it has broken apart due lack of strategy and mismanagement. ZUPCO in its heydays provided a super-efficient urban commuter service and now the company is as good as dead. It has more buses in the garage than on the road. Other formerly big bus companies such as Tenda Bus Services, Munenzva, Chawasarira and Tombs also are failing to recover after hyper inflation as there is no capital to increase their bus stock.
- Regulation in the sector has loosened as authorities have allowed small time players to come in to fill the gap. Dr Simba Makoni, when he was the Minister of Finance and Economic Development, once allowed private cars to ferry commuters as there was a transport crisis. Operator’s licences for operating a commuter omnibus are now easier to get and these have even been granted for long distance journey or inter-city travels.
Now coming back to the question of whether kombi business is still profitable.
Over the past 10 years the number of commuter omnibus has been increasing steadily and in the 3 years it has increased sharply. Why? Because there has been an increase in commuting and travelling as a result of improved disposable income. When hyper inflation became extreme in 2008 people used to walk unimaginable distances to get to business centres or towns but now they can afford to catch a kombi.
There is a general increase in urbanisation and this has increased the demand for transport services.
As ZUPCO is limping or even grounded, NRZ is also struggling and other formerly big bus companies are struggling, kombi business is an excellent opportunity for any entrepreneur or would-be entrepreneur.
Generally travellers do not prefer kombis when travelling long distances because they are accident prone but have no option as there is no good alternative most of the time.
One phenomenon that has appeared is that even with increase in kombis the demand is still high that informal players are coming on the urban and long distance with private cars such as Toyota Raum, Vitz, Ipsum and Honda Oddssey. So this is an indicator that there is a huge gap in the transport sector. Well, we could be wrong, when actually it is the poor regulation and policing which could stop private cars commuting.
The problem current players are facing is that they are not meeting the requirements of being a transport operator and this result in heavy fines from police (both lawful fines and bribes). If you are serious player it is critical that you need to meet all the requirements for running a transport business such having operator’s licence, passenger insurance and a road fit vehicle.
Customer service is also an important factor as kombis are known for mistreating passengers. You can differentiate service by offerring a better customer service.
So in conclusion kombis are one business idea in Zimbabwe worthy pursuing.