EDITORIAL: Govt to appraise riding records to determine insurance costs
Thursday September 15 2022
The government is planning to introduce an appraisal of a motorcyclist's riding records to tackle the issue of expensive insurance premiums, Rwanda Today has learnt. This comes after widespread outcry by thousands of motorcyclists countrywide.
In January, motorcycle taxi operators in Kigali staged protests over high fare meter charges and an insurance premiums hike, saying the cost of doing business had increased due to several expenses.
These included the introduction of GPS-enabled fare technology that enables automated computation of travelled distance and fare settlement. The fare was raised again during President Paul Kagame’s recent citizen outreach in Ruhango district.
The new system will include an assessment of the records to help determine the risk associated with each driver. The information would be used to determine how much insurance premium is charged.
While it remains to be seen whether the move will be effective, intervention was long overdue. This is because currently, thousands of families directly depend on the motorcyclists who are estimated to be over 30,000. It is important that they are also facilitated like any other businesses operating in Rwanda.
Beyond the high premium charges, early this year, the government mandated all fleets in the motorcycle transport services to migrate to the cashless payment system, requiring operators to install the GPS technology.
Operators remit a margin of 10 percent of their earnings to YEGO Innovision Ltd, a subsidiary of a Singaporean firm licensed to provide the technology, while another amount goes into settling charges of the transaction in a linked payment system facilitated by the telecoms and banks.
However, there is a legitimate concern that the mandatory use of meters, which have been in effect since January 7, has caused operational costs to soar, further ballooning bills that had risen after insurance firms tripled annual insurance covers a year ago.
The cover increased to $177 from $62.9 in most instances as insurance companies moved to cover the high expenses linked to compensating victims of accidents.
Motorcycle operators who spoke to Rwanda Today say their miseries were further exacerbated by the recent high increase in fuel prices. The meter charges, high cost of fuel, license fees and union charges have significantly reduced their profit margin.
Many say they are now operating at a loss, and are increasingly unable to provide for their families. It is important that the government streamlines regulation of motorcycling business with the sole objective of reducing operating costs to allow motorcyclists a chance to be profitable and to provide for their families.