How city couple built lucrative taxi company

When Pewin Cabs was started in 2008, the proprietors’ goal was to create an efficient taxi service where technology would ease and automate operations like vehicle bookings.

Seven years down the line a majority of the company’s bookings are still made through telephone calls despite thefirm unveiling a mobile app and a web portal as alternatives.

Kenyans may love technology but few are ready to embrace a fully automated service in the taxi business — human interaction is still greatly valued.

However, the old way of doing things seems to be working for the company whose fleet of 140 vehicles last year generated revenues of S20 million, a 7.4 per cent increase from the previous year.

“We have really tried to educate our clients to make reservations using either the mobile app or web portal but 80 per cent of our bookings are still through telephone,” Fred Otieno, Pewin finance director, told Enterprise.

“Many Kenyans still need that personal assurance that someone has correctly noted their details and that the vehicle will come. That is why we retained the call centre.”

Pewin Cabs was started in 2008 and is part of the Pewin Group a family business owned by Peter Kirigo and his wife Winifred. The name Pewin was coined from the first part of the couple’s names.

Their business empire comprises Pewin Motors, Penguin Dry Cleaners and Pewin Supplies. Their son, Justus Kirigua, chief executive at the firm, is the one who got the company off the ground.

The family found it difficult to secure financing. Banks were not receptive of their business proposal since they were in the transport industry which is still considered a risky business. Mr Kirigua started with eight vehicles and leased several others from individuals.

Pewin Cabs, which emerged number 14 in last year’s Top 100 survey, has two contract types with vehicle owners.

The first is a flat rate contract where uses vehicles that are not older than two years. Pewin pays a fixed amount every month to the vehicle owners, fuels the cabs and pays the drivers who are employed on one-year renewable contracts. This model is preferred by owners whose vehicles are on loan.

The second type of contracts — the revenue sharing model — is more popular. Pewin deducts the cost of fuel, driver’s salary and any repairs then shares the remaining profit with the owner, taking a 20 per cent management fee, leaving the vehicle owner with 80 per cent.

To terminate the contract either party gives a notice of one month

Pewin’s biggest customer segment is banks.

“Previously, banks would simply set up branches and wait for customers to walk in. The sector has become so competitive, requiring bank representatives to go out and look for business, creating a huge demand for taxis in the process,” said Mr Otieno.

Pick-and-drop customers account for 70 per cent of the company’s income with services such as chauffeured car hire and long distance hiring of buses (popular with NGOs) accounting for the balance.

While technology has not been wholly embraced by Pewin’s clientele, it forms the anchor of the business helping track the 140 vehicles and 150 drivers based in Nairobi and Mombasa. The shift supervisor has a screen showing the location of all vehicles in the fleet on a 24-hour basis.

Once a client contacts the company, the operator enters his or her details (name, organisation, mobile number, pickup point and destination) into the system.

The operator then assigns the client to the driver who is closest to them. The driver accesses clients’ details on a hand-held device. The customer is also automatically notified of the driver assigned to them via a text message.

A system installed in the vehicle allows the driver to remotely notify the shift supervisor when he has set off, picked or dropped off the passenger indicating they are free for another assignment.

For corporate clients, the driver writes a voucher which the passenger signs upon reaching his or her destination. Here too an aversion to technology is apparent.

“Some big companies like banks insist their auditors will not accept electronic vouchers and we have to send them a mountain of paperwork every month” said Mr Otieno.