Kenyans have been following closely the battle between the government and betting companies since new taxation and licensing laws were introduced.
It is no secret that many young Kenyans are now addicted to gambling.
The announcement by Sportpesa and Betin was a blow to betting fans, not to mention their employees.
Both companies have had a rough journey since the government suspended their licences due to taxation issues.
Sportpesa termed the Kenyan market as a hostile environment to do business.
Kenyans have differing opinions on the exit. Some feel that the betting fever is out of control and so the exit is beneficial.
Another category is crying out for the thousands of jobs lost when the companies halt their operations in Kenya.
SWVL and Little Shuttle
Government regulation has hit the two hailing companies hard as well.
The National Transport and Safety Authority (NTSA) says that the two companies have been operating without valid PSV licences.
Consequently, their operations were suspended starting October 1, 2019, until they acquire PSV licences.
SWVL and Little Shuttle have been offering relief to Nairobians from the chaotic matatu industry.
If you commute to and from work every day, you can attest to the madness on the roads.
If you are not stuck in traffic, you are struggling to get a ride home or to work.
Should we mention the occasional strikes that force Kenyans to walk miles to work?
One thing to note about the three companies that are exiting the Kenyan market is their investment in digital technology.
The giants embraced the advantages that mobile apps offer in different sectors.
Sportpesa and Betin have been among the largest players in the betting industry.
We recently featured the two as part of the betting companies with the best betting apps in the country and beyond.
Many players have joined the industry following their footsteps.
Kenyans have had multiple options for betting apps and websites because the two companies set a high standard in the industry.
Gambling is not a new trade. There are casinos all over the major cities in the country.
Betting websites have been there for decades. However, the introduction of betting apps has disrupted the betting industry.
Betting companies have developed apps with a simple interface and easy language.
In Kenya, integrating mobile payments such as Mpesa and Airtel Money into the apps made betting easier.
The bus sharing companies, Little Shuttle and SWVL enable commuters to book a comfortable shuttle via an app.
Instead of queuing at bus stops and crowded bus stations, commuters can book a ride when they are to move from point A to B.
The fares are slightly higher than the fares charged by ordinary matatus. However, the companies target travellers that own personal cars but need public transport occasionally.
With the new regulation that NTSA imposed, the hailing services may fall into the category of normal matatus.
Is Kenya ready for digital disruption?
The need to control the betting craze makes some sense. In fact, some Kenyans have welcomed the Sportpesa, Betin exit despite the job losses.
However, the move by the government on the taxi app companies raises some questions. Were we prepared for the effect of digital technologies?
Taxi apps have already disrupted the transport industry. In the past, Kenyans would negotiate for taxi services with drivers.
Today, you can use Uber, Taxify, Little Cab, inDriver and any other taxi app to book a cheap taxi ride.
Mobile apps such as Glovo have also disrupted logistics and delivery companies. You just need an app to order a meal, shop for groceries, or buy any item you need online and get it at your doorstep.
You do not need to call a delivery company for that.
Think about banking, which was a headache for such a long time.
You can access your bank account and transact using your bank’s mobile app.
Do we need to revisit the popularity of mobile loan apps that have taken over the lending space in Kenya?
Apps have replaced the long documentation process that was associated with a loan application.
The impact of social apps on business and communication is phenomenon. Businesses now rely on social media to stay in touch with clients.
Social apps and bots have replaced emails and calls in most industries.
The big question is, were we ready for this disruption?
Is the move by the government to tax digital companies an indication of our unpreparedness to deal with the effects of digital technologies?
The reality is that imposing heavy taxation on such companies that embraced new technologies is a blow to innovation.
New players are now hesitant to join the industries until the tax rows and licensing issues are resolved.
Players in the real estate, housing, education, and agricultural sector have had to keep up with the latest technologies to stay relevant.
Were the arms of government prepared for such disruptive technological changes?
It is impossible to control the digital disruption across industries. Technological innovation cannot be stopped because of its benefits.
The good thing is that it is possible to observe trends and anticipate their impact on the economy.
Kenyans are innovative. However, most of the disruptive trends start from developed countries.
Betting and bus sharing apps were established in developed countries long before the players entered the Kenyan market.
The government has an obligation to control the business environment and ensure that players pay the taxes due according to Taxation laws.
However, it is prudent for the government to bring up such issues when issuing licenses.
The exiting companies cry foul because the taxation and licensing issues arose when they began to make huge profits.
The government has enough technical experts who can follow the trends and advice on the required changes in laws and policies.
Otherwise, we will continue to witness massive job losses in an economy where thousands of graduates are unemployed.
The call to anticipate changes also goes to business owners who are comfortable with the traditional business environment.
Taxi owners were hostile when new taxi apps were introduced in the market. Despite the strikes, the taxi companies started their operations.
Business owners should explore the opportunities that digital technologies offer instead of resisting change.