Limited supply of cards push up cost of transport

Sunday September 2 2018


Cost of transport has gone up as a result of illegal sell of Tap$Go cards. PHOTO | FILE 

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Illigal sell of Tap & Go cards used for public transport is undermining efforts to improve transport using the cashless initiative.

Tap and Go cards are supplied by AC Group, a local technology company, but unauthorised vendors have gained access to the cards, which has manupulated their cost in the market.

Rwanda Today has learnt from taxi park agents that limited supply of cards has creating room for a lucrative black market where the cards are resold at a higher price to passengers.

“Let me sell you a card. It is loaded with Rwf600 and I am selling it at Rwf1,500,” a vendor in Kimironko taxi park told this reporter.

Tap and Go system was introduced as a part of government’s effort to achieve cashless transactions in transport sector after a decade long investment in information and communications technology.

The system rendered hundreds of bus conductors jobless and brought about what passengers termed unfair bus fare determination. For instance, a passenger boarding from Kimironko taxi park to Gisementi used to pay Rwf100, but with the advent of the card system it shoot up to Rwf 250.

Aaron Ndagijimana, a manager at the department of transport at Rwanda Regulatory Agency (Rura), the industry regulator, defended the rise in bus fare, saying it brought discipline in the sector.

He said: “Say a bus sets off from down town taxi park to Busanza and most of passengers disembark between Rwandex and Remera, in the old setting bus operators could off load the remaining few passengers along the way without taking them to their destination because it was not making business sense to burn fuel to Busanza with two or three passengers.

“The new system has removed this because it acts like a kind of mutulle.”

Some industry players said with some six hundred buses transporting close to four hundred thousand passengers per days, the cashless system is a lucrative business, and owners should be delivering a high standard service.

“Operators incur costs of repairing swiping machines. It’s like a bank asking customers to foot bills for repairing ATM machines. May be all this is a creation of monopoly,” one operator wonders.

But Nilla Muneza of Royal Express Buses has a different opinion. He said AC Group charges a commission of five per cent on every tap, which he noted is a lot given that they have a contract of two years to recoup investment

“Stock outs of cards is a general problem. For us, if agents do not have them we chase them out of our operating area. As for the five per cent charge it all stems from a business model that is somewhat insensitive. It’s like our case where we were given a five-year contract,” he said.

However, officials at AC group said those selling cards other than the appointed agents are criminals, who should be reported to police

Director of sales and marketing at AC Group Ltd Umunyana Sharon wondered how stock outs of cards happen when the company has printed enough cards.

“When there is a problem we communicate. Last year, because of festive season it happened that many people wanted cards, and we communicated,” she said.

Despite these mishaps, the system has assisted bus operators close cash money leakages. It also brought discipline to drivers by removing cash from their hands. Some of them could drink alcohol during working time, operators say.

Also, it fits well into government’s agenda of developing smart cities and provides real time data. The system has also reduced on the waiting time for passengers at bus stops.