Two Wheeling in a Tidy Profit



Motorcycles are becoming increasingly common as a transportation method in Ethiopia, with the highest number in Addis Abeba and the south. They are useful both for gridlocked urban areas and hard to reach rural locations. This demand is ensuring that numerous two-wheeler entrepreneurs are able to pick up a pretty profit. All may change soon, however, with the authorities suggesting that they want to limit the increase of such vehicles on the roads in favour of other transport systems, such as the light railway, reports MIKIAS MERHATSIDK, FORTUNE STAFF WRITER.


Since he failed to go past the 10th grade of the educational ladder, Tedros Yemane, 30, has washed cars at the locality known as Pepsi around Kera, on Dejazmach Beyene Merid Street, for the last eight years. Making 50 Br to 60 Br a day from customers he serves near the beverage factory, Tedros says he was able to save 30,000 Br. An older sister living in Saudi Arabia sent him some money and he was able to buy a 180 CC Apache TVS motor cycle for 46,000 Br a year and half ago, with which he launched himself into a new business.

In the last 18 months, Tedros has been providing delivery and taxi services, garnering loyal customers from the car repair shops and spare part shops in his locality in Nifas Silk Lafto District. By picking up and delivering small sized car parts for his customers, mainly from spare part dealers around Teklahiamanot and Abinet in the Arada and Addis Ketema districts, respectively, for 80 Br a trip on average, he was able to save enough money for a second bike of the same type, which he bought two months ago.

He has hired a driver for the new one, who puts it in the pool of close to 40 motor bikes that gathers in front of the Addis Abeba Abattoirs at Sidist Quter Mazoria, on Tanzania Street, waiting for their customers. Most of these are people that require speedy transport to get to their business as fast as possible. The driver presents a net 100 Br by the end of each day.

The kind of business which Tedros is offering with his two bikes has been growing, leading to an increasing demand for motorbikes over the last four or five years, according to Tsegaye Atakilti, general manager of Tagrow Business Plc, which has been importing Tagrow Bajaj motor cycles for the last seven years.

“The demand is growing by about 15pc a year,” Tsegaye says.

Currently, the number of registered motorcycles in the City has reached 12,152, according to data from the Addis Abeba Transport Authority.

This is a global phenomenon that the city is catching up with. Motorcycles are becoming the new means of mobility for the increasingly congested developing world.

Statistically, there is a large difference between the car-dominated developed world and the more populous developing world, where cars are less common than motorcycles, according to the World Bank. This is because of the overwhelmingly utilitarian nature of motorcycles and because they are one of the most affordable forms of motorised transport. About 200 million motorcycles and three wheelers are in use worldwide.

A decline in organised public transport systems has led to rapid growth in non-conventional means of public transport, initially provided by minibuses and shared taxi-vans, and more recently by commercial motorcycles. Unlike cities in South and East Asia, ownership and use of motorised two-wheelers as a personalised vehicle is very small in sub-Saharan cities, according to a 2011 research by the World Bank, entitled: “Understanding the Emerging Role of Motorcycles in African Cities.”

These motorcycle taxis have local names in different parts of the continent. They are referred to as Okada in Lagos, Nigeria; Boda Boda in Kampala, Uganda and Bendskins (or moto-taxis) in Douala, Cameroon. The motor taxis in Addis Abeba, which are more common in some corners of the capital than others, are yet to be given a local name.

Besides Kera, one of the localities of Addis Abeba where motorcycle taxi and delivery services are relatively widely used is the Goma Tera, around Teklhaimanot in Addis Ketema District.

Tedros bought his motorbike from Getu Teffera Lifan & TVS Motor Cycle Importer & Distributor located around the Agona Cinema on Sierra Leone St. The Company, which is the exclusive agent for the two brands, sells 100CC TVS motorbikes for 30,000 Br and 150CC to 200CC Lifan motorcycles for 28,000 Br to 38,000 Br, according to Yonas Teffera, sales manager of the Company. Yonas, who has been in the business of selling motorcycles for the past 10 years, says the market is expanding fast. He attributes this to the growing income of the population and the growing awareness of the public about the benefits of the two wheelers, which can cover up to 50kms with a single litre of fuel.

The company, which has agents in regional towns, imports spare parts for the vehicles and is setting up a maintenance service facility at its main shop.

“The main demand outside of the capital is coming from the southern part of the country,” Yonas says.

The main reason, he says, is the growing income of farmers from cash crops. Institutional buyers, such as government offices, NGOs and private companies, are also becoming increasingly interested in purchasing the two wheelers for field work. But still the share of individual buyers is significant, according to Tsegaye of Tagrow.

Tagrow, which imports its products from India, boasts 265 branches and dealers all over the country as the demand grows. The Company imports spare parts and has a dust proof maintenance facility around Lebu, in Nifas Silk Lafto District.

“A growing number of our customers are individuals who are buying them to give motorcycle taxi and delivery services,” the general manager said. “With demand from various towns and rural areas, where roads are difficult for access by cars, increasing.”

But this is not what the government plans for city transportation. In fact, the motorcycle taxis are illegal since they do not have a public transport service license, according to Tiblet Asgedom, deputy head of the office of the Addis Abeba Transport Authority.

“We do not want their numbers to grow, as they are noisy and highly pollutant,’’ she said.

Rather, the City plans to increase the public transport services, including the coming light railway line, to be the main transport system in the capital.

Yet this is the last thing on Tedros’s mind, who is rather busy planning his next move, which is saving enough to buy a minibus taxi and join the more reliable transport market “stepping up from two wheels to four” as he put it.



By MIKIAS MERHATSIDK
FORTUNE STAFF WRITER

Published on June 1, 2014 [ Vol 15 ,No 735]


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