The Crazy costs of owning a Matatu (Ksh 900,000)

This is absolutely one the most expensive business to run with the startup and operational costs huge.

Below is a detailed version of the costs of owning a Matatu

Startup costs

For you to even think of starting a Matatu business you must be registered to a Sacco, many of which ask for a fee for every new member. Fees depend on how well a Sacco is established, their competitive edge, and the number of routes available to members. Fees may range from as low as 5000ksh to the highest I have ever encountered, 400,000ksh.

Another huge cost is the Vehicle itself. for a few Sacco's, you need to have a new vehicle that you can cough upwards of Ksh2.5millon, while for a good second-hand 14 seat, a budget of 500k or upwards is fine.

Operational costs

Garage and Repairs

There are many costs associated with a Matatu. The biggest cost is repairs and service of the vehicle.

On average a new Matatu repair cost is roughly 10 to 15k a month, this includes all garage costs, oil changes, and replacing tires. For older Matatus, you can increase that cost to 15k to 20k and at times even much more if you are unlucky and get involved in the never-lacking Matatu accidents.

Fixed or recurring costs part of Matatus.

Sacco fees and shares

As earlier stated each of Sacco's operations is quite different. For our case, we are members in three. We pay shares of 5k in two and pay operation and service fees after every trip completed by the vehicle. Operation fees are paid to the money collected. Other Sacco's just ask for a monthly fee to cater for all operational costs. in our case, we have an operating cost of  ksh100  and a service fee averaging 500 a day

the shares are used as savings of the member that bear interest as they can be used in other business opportunities or loaned to members at favorable interests

Insurance

This is a huge cost incurred by Matatu members.

Below is a quotation from a well-known insurance company on premiums paid

SEATING   CAPACITY	1 month	Yearly	6 months	3 months
10	7,900	87,500	29,160	14,580
11	8,200	90,700	30,230	15,110
14	9,005	98,400	32,800	16,400
16	9,650	105,400	35,130	17,560
18	10,050	109,900	36,630	18,310
24	11,450	125,400	41,800	20,900
25	11,800	128,400	42,800	21,400
29	14,200	154,900	51,630	25,810
33	15,850	172,400	57,460	28,730
37	20,980	228,400	76,130	38,060
41	22,940	250,900	83,630	41,810
42	23,440	255,400	85,130	42,560
46	25,410	276,400	92,130	46,060
51	27,060	296,400	98,800	49,400
62	31,400	343,400	114,460	57,230
67	32,450	353,900	117,960	58,980

NB all are third-party covers

A Matatu comprehensive cover is so expensive because you add the above premiums plus 3 to 4% of the car value

(Monthly parking fees) County bylaws 

In every county, there are parking fees paid as a monthly subscription.

Nairobi for instance is -3650

Nakuru- 2000

 Muranga/ Thika  -2500

Kirinyaga / Embu-1500

In our case, our monthly cost is 7150 for Nairobi, Nakuru, and Kirinyaga

Road licenses and yearly Inspection stickers

These are government licenses that are paid yearly

The road license is 3500 paid through the Sacco

The Annual inspection sticker is 3900 + 1050 booking fee

Salaries

A driver's salary depends on your agreement as this varies from day today. But mostly they earn approximately Ksh 800 and a tout Ksh 500 daily.

 

Advance tax  

The tax you pay before working and with passenger-carrying public service vehicle you multiply the capacity with Ksh 60 per month

For 14 seat

60*14*12= 10,080

 

 

Miscellaneous costs 

Carwash 100

Parking 100 

On Average "Boys" or "Serkal" cost can be from 200 to 400 a day. 

Operational costs added up on average

Daily 2500 + (30) advance tax

Monthly 75000 + (840)

Yearly 90000+ (10080)

NB... remember with all these I haven't even added the depreciation of the car