Africa is home to some really interesting start ups. Tech start ups have provided services from finance to leisure. Thirty tech start ups were recently selected to showcase their products and services at last Demo Africa event and this gives you a sense of just how far the continent has come with respect to innovation and economic growth. That said, the distribution and embrace of technology based start ups is still highly uneven. For example, Nigeria and Kenya both featured the most start ups while South Africa came a distant second. So this is not a question of population. I want to focus on a new breed of start ups many may not have focused on before but seems to be gaining some significant attention across Africa. Traffic apps and yes that’s what I want to talk about today. TRAFFIC APPS from the Nigerian and Kenyan perspectives.
A quick background
Nairobi loses over $350m/69b Naira/36b Kenya Shillings/4.8b Rand annually to fuel consumption and man-hours. In Lagos, the figure is about $663m/131b Naira/70b Kenya Shillings/9b Rand and in Johannesburg the story is the same. These are some of the major cities in Africa and the figures should be pretty consistent with slight variations in economic costs. Authorities have continued to expand infrastructure and other means of transportation in a bid to decongest the roads. But what are some start ups doing to help?
In Kenya we have Ma3Route and Waze. They are both applications that deliver live traffic reports to you based on contributions from an online community of contributors. Individual contributions are based on road experiences at a given time. Ma3Route was founded in 2012 by Laban Okune while its main competitor Waze is a collaboration between Kenya’s biggest Telco by subscriber Safaricom and Google. Telecom companies across Africa tend to delve into value added services as in a bid to increase revenue. In some cases like Nigeria, the valued added service (VAS) market could be well over a billion dollars. Safaricom has big interests in mobile remittance as well in the form of M-Pesa. That said how do they both fare with respect to number of users? In a Tech Sahara report, Ma3Route has a 300,000 user strong community and this trumps the Waze solution but being that this is supported by Google, one would expect more. Well Waze has really cool features built into it. A users can report based on the speed at which they are moving. Some reporting facilities may not be available if the apps senses your speed. The even tried to make the app social by adding a gaming feature which gets better as you report. There’s also an emergency services section within the app as well. The app still doesn’t have the number of users like the Ma3Route one. They both have what to offer the public and as such a merger may really serve the public better but I don’t see this happening as Ma3Route has
now gone ahead with plans to raise money to make its app just as efficient as Waze. One of the ways they have managed to raise money is by sending traffic updates as SMS to about 20,000 users daily for a small fee. The company has hinted that it may be interested in raising money from other sources in order to venture into similar markets with infrastructure challenges like Lagos and Mumbai but just how would they fare in Lagos?
In Lagos, two applications also stand out and rely on the Ma3Route model of crowd sourcing. GidiTraffic and Traffic Butter both rely heavily on twitter to report live traffic situations. GidiTraffic which is supported by Nokia has over 400k followers while its major competitor has over 128k followers. But Tsaboin which has a relatively small Twitter follower base has done something a bit more interesting than the big names. On their website and within their apps, you don’t just get text updates, you can see live traffic situations for a small fee ofN1.20/$0.01/0.62KenyanShilling. They have a more interactive website where users can actually go ahead to confirm if what they see is right. So if you have a friend who’s reporting something different from what you see within the Tsaboin app, you can choose to not confirm it by replying. What they have basically done is to replicate the Twitter environment on their website while GidiTraffic and Traffic butter have both taken advantage of the Twitter infrastructure to do business. The Lagos state government even has its own traffic radio station (96.1). With this you can get real time updates from presenters who also rely heavily on callers but as a result of the deeper pockets, they sometimes have paid correspondents who report live as well.
But just how do they make money?
As I mentioned earlier, GidiTraffic was initially supported by Nokia. GidiTraffic for example hasn’t given any hint as to how they generate revenue but could it be that they help you tweet your brands and services for a fee? Sometimes I notice a retweet of a fun stuff and in some cases serious brands in their feed. Again it’s not clear at this time how they generate revenue. This is an area they have to look into to make the service attractive to potential funders and investors. Being a humanitarian service depending on how you look at it, they could explore crowd funding by leveraging on their community strength. The radio station obviously doesn’t rely on other sources of funding considering that it is funded by the wealthiest state government in Nigeria. I hear they also do ads sometimes.
Ma3Route and Tsaboin both have found ways to monetize their apps by charging a fee for you to receive updates via SMS or other ways.
Opportunities with Uber
I recently did a piece on the Uber expansion into African cities with a spotlight on their recent celebration of one year in Lagos. In it, I spoke about some challenges and opportunities and notable among the opportunity is that since these traffic services rely heavily on their users having access to the internet and smartphones, there appears to be an opportunity here. First, its projected that there will be over 330 million smartphones on the continent by 2017 with a more affordable access to the internet. Uber also relies heavily on people installing its app as well but Uber has a major challenge of mapping and accessibility. If traffic solutions like the ones we have mentioned in this report were to collaborate with Uber in making the service easily accessible to users and drivers, this could potentially be an interesting area that may benefit million of people. Uber aims to be more efficient that traditional schemes by connecting users with nearest car to their location but even at that, traffic jams may make this difficult to achieve even for Uber but organisations traffic solution companies could really be of service. What if Uber were to build a special feed from these services into their systems that now let drivers use the best possible route to a passenger?
Like Waze which has partnered with Google to bring about live situations on its route mapping, satellite could be the future of such services. A more efficient way in future would be for the companies mentioned in this report to leverage on mapping services that most smartphones have to offer to provide more accurate data. We can’t leave out the human factor. As these services grow, they need to hire more people to be survey strategic locations with real-time updates. A combination of these would make the service more suitable for everyone to use.