Ugandan ride-hailing startup, SafeBoda recently announced its intentions to terminate operations in Kenya due to the COVID-19 (coronavirus ) pandemic. According to a statement via its official Twitter handle, the company announced that it would cease operations in the East African country from November 27, 2020.
The startup which launched in Kenya’s capital in 2018 stated that while Nairobi has gradually started to recover from the pandemic, boda transportation has been hit hard. “This has meant our business cannot sustainably operate in this environment and unfortunately the timeline for a full recovery is not certain,” SafeBoda said.
For 2 years, SafeBoda onboarded over 4000 bodas who have successfully completed millions of trips. However, this latest move will see thousands of its boda riders and call center operators thrown into the unemployment market. The exit is also likely to affect the cost of business operations-particularly for small and medium scale enterprises who have so far benefitted from its presence.
The year 2020 has been rocky for many economies globally, and African countries like Kenya also suffered a heavy blow. Unemployment rates in the East African country increased to 10.40 percent in the second quarter of 2020 from 5.20 percent in the first quarter due to the impact of the COVID-19 (coronavirus) Pandemic.
Within the past 5 years, jobs in Kenya’s non-agricultural sector have grown significantly, even though agriculture remains the largest employer of labour. Often referred to as the ‘Silicon Savannah’ of Africa, Kenya is at the forefront of technological innovations in Africa.
According to a report, the country’s ICT sector (which SafeBoda technically falls under) has been estimated to contribute up to 8 percent to its GDP through IT-enabled services (ITES) and create 250,000 jobs by the end of 2020. But this latest move by the Ugandan startup could see these figures drastically reduce.