It was a tragic sight. Dozens of orange buses were being towed and trucked out of their long term parking yard at Namboole stadium. In the dead of the night, as if the owners were embarrassed by the failure of their business.
I think it still happens, but I was once bemused by people
who move house at night. The explanation for this ranged from, the tenants don’t
have time to move in the day as they are at work to you move at night so the
thieves don’t see you to many of these tenants were fleeing rent arrears.
The orange buses belong to the Pioneer bus company, which folded for all practical purposes, a decade ago when a year into operations in 2013, Uganda Revenue Authority (URA) came calling for sh8b in import duty that had come due. They were never the same again.
By the promoters own admission, they had kicked off
operations ahead of schedule, as a stop gap measure for a strike by Uganda Taxi
Operators & Drivers Association (UTODA).
UTODA was facing off with the newly created Kampala Capital City
Authority (KCCA), which was insisting that the then powerful association make
good on its dues to the city.
Initially they were making cash hand over fist, but as they
say you will know who is swimming naked when the tide goes out. Once the taxis
got back on the roads after their little tantrum, Pioneer bus could not handle
the competition and cracks started to appear.
A cursory look around Kampala on any given day and it would
not be hard or long before a mad boda boda rammed into you, to determine that
the transport system is need of a major overhaul.
The running of Kampala’s transport system has been left unregulated
and to the whims of the taxi drivers and the aforementioned boda-boda
operators. Leaving the market to its on devices is a good idea, until it isn’t.
The way the market works is through a series of continuous experiments.
Every transaction or business is an experiment whose result is logged somewhere
in some ethereal brain. There are more failures than there are successes and
these failures are crushed brutally, every year, every month, every day, to
make room for the successful experiments.
"Every so often in human history some people, with little or
no understanding of how the market or business operates, come along, often empathizing
with the losers and proceed to rig the market to guarantee one result or the
other – often for their political cronies. It always ends in tears....
The market, like God, shall not be mocked.
Sadly it is not the political cronies who suffer but the tax
payer, who shoulders these losses by suffering poor infrastructure, failing social
services and rising crime.
Pioneer buses was in trouble from the first passenger it
took on. Backed by a group of politically connected promoters, the bus company
thought they could lean on government to get the concessions they needed to
make the business work.
Unfortunately, the hastily got concessions did not come through
jeopardizing the company’s future success and its promoters’ future prosperity
(?).
The URA raid may have been the promoters’ road to Damascus, but the company’s fate was sealed when a more fundamental concession never came through. This was the institution of bus lanes that would be exclusively used by the company on their routes from Kampala to Bweyogerere and back...
These were important because people intimately familiar with
the business, worked out that for the business to make sense at the low fare
prices being proposed, each bus had to do at least eight return trips a day on
the aforementioned route. The Kampala-Bweyogerere route was a pilot, afterwards
other routes were to be added.
Spurred by some romantic story that opportunity only strikes
once, the promoters rushed into battle without crossing their ‘t’s and dotting there
‘i’s, which left government room to renege on the deal. And that was that. But
you also have to wonder about businessmen who can commit tens of billions of
shillings to an enterprise without basic policy in place.
Private capital is one of the most efficient ways of running services, if only because the motives of the owners are aligned with those of the customer, believe it or not. For the business man to make money he has to serve more and more people. The days of price gorging and fat margins are gone and government too can ensure this does not happen by allowing competition. Business works under the sword of final censure, they don’t serve the customer, they die...
Ironic as it sounds, government interests are not always aligned
with the customer. Financed by the bottomless pit of tax payer money,
governments can throw good money after bad and not feel the pain, especially if
these businesses feed their supporters.
Seeing how business left to its own devices can lead to
chaos, at least in initial stages until the stragglers are culled, how can government
support business to help it in service delivery?
If nothing else, all government bureaucrats need continuous training
to understand how businesses work. This is important to help them design policy
to improve the business environment and negotiate effective and sustainable
concessions for intending businesses.
It will also help them recognize that without a dynamic,
robust business community it will be impossible to deliver service and uplift
the living standards of all citizens and therefore guarantee the longevity.
The rest is basic – a national development strategy, burnish
corruption, improve the quality of human capital, beef up law enforcement
agencies to ensure a level playing field for all actors and facilitate
appropriate financing.
As it is now look with a jaundiced eye at any government
support for your business.
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