Did you know that every day, bodabodas earn over Kshs. 400 million? Well, this is according to Motorcycle Assembly Association of Kenya.
You have probably heard the never-ending debate on whether bodaboda’s are a good investment. In this article, you will learn why for a small-scale investment, they are a good bet.
On average, a bodaboda will rack in anywhere between Kshs. 400 to Kshs. 1,500 per day. These figures do not change whether you hire a rider or you ride your own bodaboda. Riders in urban areas are bound to make more money because fares are higher and there are many customers.
Let’s first go through the economics of owning a bodaboda. These figures are from an actual owner of a bodaboda operating somewhere along Thika Road.
| Item | Cost |
| New Bobaboda Cost | Kshs. 90,000 |
| Bodaboda insurance | Kshs. 12,000 |
| Bodaboda license | Kshs. 3,000 |
| Location (Stage fees) | Kshs. 60,000 |
| Average daily return | Kshs. 500 |
The owner of the above motorcycle has a rider than remits the Kshs. 500 each day. (Sometimes the rider falls short of this target but makes up for it in other days of the week).
Simple math from the above table shows the following cost versus income analysis for one year.
| Income | Costs | ||
| Daily income for a year (Kshs. 500 * 28 days * 12 months) | Kshs. 168,000 | Bodaboda purchase | Kshs. 90,000 |
| Bodaboda insurance | Kshs 12.000 | ||
| Bodaboda license | Kshs. 3,000 | ||
| Location (Stage fees) | Kshs. 60,000 | ||
| Monthly maintenance (Kshs. 800) | Kshs. 9,600 | ||
| Kshs. 168,000 | Kshs. 174,600 |
Now, Bodaboda that is well maintained has a lifespan of about 2 years to 3 years maximum. This means, the first year will be for getting back your capital.
In the second year, you will make around Kshs. 143,500 which will be the money you get back from your investment. This is about Kshs. 11,950 per month in profits. After 2 years, you can dispose the well-maintained bodaboda at a selling price of between Kshs. 30,000 and Kshs. 50,000.
Some critical things that you should know first;
Location – Stage fees
New Bodaboda are charged a fee (not official fees) to be allowed to ferry passengers from a specific stage. Those stages are where you will see most bodaboda riders packed waiting for their turn. Stage fees range from anywhere between Kshs 10,000 to Kshs.100,000. This is common in urban areas. Avoiding this fee is hard unless you can start your own stage away from other riders.
Rogue Riders
The earnings above are projected when the rider is faithfully fulfilling his part of the deal. This is not always the case as there are cases of rogue riders who will go for days without remitting any payments to the bodaboda owners. While installing a tracker on the bodaboda can reduce this problem, it does not completely solve it.
Financing riders
An alternative model currently being used is where you as act as an investor and buy a bodaboda for a rider. The rider then pays you back over time with interest. Each week or month, they give you a share of their earnings as payback and this continues until they are done paying back the cost of the bodaboda and the interest money. You then transfer the ownership documents to the rider. In such a case, you could spend Kshs. 120,000 on the bodaboda then the rider pays you back about Kshs. 165,000 over a long period of time.
