Pareto Efficient

In search of pareto improvements

Posts Tagged ‘economy

Branded Boda Idea

with 3 comments

Problem:  Imperfect information about boda drivers (motorcycle taxis) leads to unsafe free-for-all

  • Many bodas drive unsafely and without helmets
  • Many do not know their way around town
  • > 90% actually rent their motorcycle from a local owner and see their earnings impacted accordingly
  • The influx of many new bodas threatens to squeeze margins for the drivers
  • There are no branded fleets of boda drivers — its a wild west…

Solution: Leverage branding, scale and economic incentives to improve driver safety/earnings

Driver Safety:

  • Provide clearly branded well maintained bodas to drivers
  • Provide road/accident safety training to all drivers
  • Provide helmets and day-glow vests for driver/passenger
  • Require drivers to know the major districts, connecting roads, and typical tourist stops
  • Require drivers to speak basic English

Driver Earnings:

  • Revenues: Hopes that branding will cause drivers to stand out in the crowd, and get more fares.
  • Costs: Over time, the drivers will pay less to rent the bodas

Back of the Envelope:

  • There are over 200,000 boda drivers in Uganda
  • 1,000 drivers paying the market rent would be $1.7MM USD/year in revenues (2.8bn Ush)
  • As the bikes are paid off, the cost structure of the business will decrease, which we can pass on to the drivers in the form of lower rental costs.
  • Increased driver earnings will increase the quality of their lives.

Written by thetyson

October 9, 2008 at 3:02 pm