Wagon Trans Technology Solutions Plc is launching a minibus-booking platform that enables daily commuters in Addis Ababa to book seats on minibuses.
Set to be released in November 2022 the tech-enabled mass transit solution aims to offer a reliable, convenient, and affordable platform for commuters in Addis Ababa with a price tag that the startup says is “80% cheaper than other ride-hailing apps.”
“Our app and call center are ready to take users’ requests and reserve their taxi seats so that they do not have to stand in line waiting for a taxi or pay for expensive rides,” said Ayub Nuru, founder & CEO of Wagon.
Users will be able to book rides on Wagon via an app or call center, while the Wagon minibuses operate on fixed routes at fixed times. All the routes as well as the timings are displayed on the app and clients are picked up at designated “pick-up spots” along the route.
The startup is currently creating optimized routes that increase efficiency and is planning to start operations with 10 onboarded vans in a pilot phase.
“We would most likely be going on long routes that are not covered by minibus taxis,” said Ayub.
These minibuses will give their service to commuters during the morning and night, aiming to be the preferred option in the capital to get to and leave work.
Wagon’s rate will also be fixed and depends on the route. The team says its trips will have an average price of 30 birr per person. The startup takes a 10% cut from each ride booked through the app.
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“Wagon is essentially a product that arises from a two-sided dilemma. On the demand side, approximately 2 million people in Addis Ababa commute on a daily basis, with the majority choosing between two extremes: pricey on-demand ride-hailing services or unreliable and unpleasant public transportation,” said Ayub.
“This is paired with a supply-side opportunity since Ethiopia’s economic downturn has reduced the spending power of the country’s aspiring middle class while simultaneously creating a wealth of underutilized private infrastructure,” added Ayub.
Seeing this, Ayub started working on the platform at the end of 2021, returning to Ethiopia from the US to further develop his concept.
Ayub who is currently attending two undergraduate programs at George Mason University in Virginia, told Shega “I wanted to offer a far more affordable alternative than ride-hailing and a less crowded method of getting on a bus that is packed.”
Wagon aims to serve multi-economic commuters from the lower-income and middle classes by combining affordability, comfort, and safety.
“At the beginning, we will be working with cash transactions, but we would like to transition to digital payment using Telebirr as a gateway to facilitate and make it easier for users to pay and use our services,” he added.
Wagon’s fleet is made up of Toyota-D4D Dolphin vans with 15 seats. According to Ayub, part of the reason the startup chose these vehicles is that they have been trapped due to regulatory issues.
Ethiopian ride-hailing platforms, such as Ride and Feres, onboard minibuses on their platforms. However, these vehicles provide service for one ride request at a time and do not have ride-sharing features like the now-closed Pick Pick Taxi.
According to Ayub, the minibuses to be enlisted on these platforms they have to change their business license from transport services to car rental services.
“This means that minivans under ride-hailing platforms can no longer engage in public transportation services like the blue-colored minibuses. So unless jobs come through the apps, or they are privately booked through contracts, these minivans are not working. Of course, some of them still engage in public transport. But this is against the law and such vans risk getting trafficking fines if caught,” explains Ayub.
Ayub adds that these vehicles are also out of the fuel subsidy program because of the category of their license. This created the perfect opportunity for Wagon to bring in such minivans under its app.
In addition, due to the nature of the service, the vans under Wagon are forced to travel even if they are not at full capacity to stay on schedule. The startup promises its drivers it will pay for the empty seats.
“Now, as we are only deploying the service in the morning and night time where there will be a lot of commuters, we are confident that such incidents won’t happen very often. Of course, after our pilot phase, our vans will be available all day. For the full launch, we will have other mitigating mechanisms,” added Ayub.
After its pilot phase, and learning from the lessons on the ground, Wagon aims to broaden its features and enlist diversified vehicles such as coasters and Damas. The team adds the Wagon has already acquired a license from the Addis Ababa Transport Bureau.
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Following the failed attempt of Pick Pick Taxi, Addis has not seen a ride-sharing platform. However, in the rest of Africa, public mobility-as-a-service platforms have grown popular, with some raising millions of dollars in funding.
The Nigeria-based Treepz is one of the biggest names in the sector and has previously disclosed its intentions to expand to Ethiopia.