We recently reported that Safaricom, Kenya’s largest mobile phone network, has entered the car-sharing market with a new app. Little, developed in partnership with Nairobi-based software company Craft Silicon, lets people request a car using live GPS-enabled maps.
Passengers who choose Little enjoy free wifi from Safaricom. Their ride is also cheaper than competitor companies such as Uber. The service is more profitable for drivers too, as it takes no more than 15% off drivers’ earnings. Uber, for example, takes 25% commission.
People can pay by cash, card and via Safaricom’s M-Pesa, the telco’s mobile money transfer service. Little runs on iOS, Android, Windows devices and feature phones.
We speak to Kamal Buddhabatti, CEO of Craft Silicon, to find out more about why Safaricom launched a car service.
Tell me about the Safaricom brand and its positioning.
Safaricom is a very big and prominent player in the country and really loved by Kenyans. The company is always exploring the relationship with its customers to ensure it remains on top. Safaricom likes moving fast and experimenting with new things, even though it’s quite big.
How did this project come about?
We have done other projects with them in the past and so, we felt like they would be a perfect partner for Little. We are a B2B technology company that mainly works in the banking and finance space, while Little is a consumer-facing product. So we needed someone who understands the consumer market, which is why we decided to run the idea past them. They were immediately on board and, like us, wanted to create a localised app that was made in Kenya by Kenyans and runs here.
Telcos are no longer just telcos. They are becoming infrastructure companies….Just giving minutes or data isn’t enough any more. You need to create products or services that are really specific to a particular customer group or industry.
– Kamal Buddhabatti, Craft Silicon
How did you come up with the idea of Little?
It was very spontaneous decision. It wasn’t something that we or Safaricom had planned to do. We are a technology company so we thought we could come up with something like Uber but on a local level. When we agreed on the idea, both us and Safaricom assigned teams for the project and created it together. The technology is from our side and Safaricom does the promotion around it, supplies phones to the drivers, the free in-car wifi, and educates drivers about Safaricom’s services.
What are the business objectives behind the project?
Obviously, we want to make sure this is a profitable venture. But beyond that, we also want to make sure the drivers are treated better than they are from competitors like Uber. We looked at this from their perspective and asked ourselves what we can do to make them operate more smoothly.
This is an opportunity for them to cross-sell.
– Kamal Buddhabatti, Craft Silicon
Safaricom has launched several other services in spaces like energy and healthcare. Why is a telco like Safaricom creating services beyond its core offering?
I think that telcos are no longer just telcos. They are becoming infrastructure companies. If you can segment what industries your business serves, for example, health, agriculture, transportation, then you can come up with products that can really benefit these sectors. Just giving minutes or data isn’t enough any more. You need to create products or services that are really specific to a particular customer group or industry. Safaricom is segmenting the businesses it serves to different categories and transport is one of them. So, in transport they’re working with us to cater for the people in that industry. And obviously they’re doing similar things in health and finance.
Why did Safaricom build a transportation service specifically? Is this a particularly pressing issue in Kenya?
Not exactly but I think it can really help their business going forward. They can build up features on the Little app that are quite unique. For example, people can pay through their M-Pesa. Drivers and passengers can call and browse the internet by using Safaricom’s services. This is an opportunity for them to cross-sell.
Why would people choose Little over already existing options like Uber?
We have done a few things in a very unique manner. All cabs have free wifi, which is a plus. When people get into the cabs, the driver’s phone automatically creates a hotspot and the passenger is instantly connected to the wifi. All of the drivers’ handsets are provided by Safaricom. We also wanted to make sure that all our drivers are not just drivers, but agents. And this is how we’re promoting the service when we’re recruiting. Drivers can do many different things while they’re driving you from point A to B. For example, they can sell Safaricom minutes, data or help you pay your water and electricity bills through M-Pesa. We didn’t want to create just drivers because their mentality would be much different.
Those things are beneficial for the passengers too. Safaricom has a loyalty programme called Bonga points with which people can also pay for their ride. Another interesting thing that no one has done before is making the app available on feature phones. All people have to do is dial a number to order it. We get the approximate location from the cellular network and then we send the cab. Even if you have a smartphone you can use that way to order a cab, which I think is easier and quicker.
*How do you train the Little drivers? *
We do drivers’ training every three weeks. We first evaluate the applicants in terms of background check and their skills. If everything’s fine, we put them on our platform and teach them about Safaricom’s offering and services.
Why was it important to have the app on feature phones?
Feature phones still dominate our market. But beyond that, because Safaricom is a very inclusive brand. We didn’t want to come up with something that leaves a lot of users behind.
What are the penetration rates of feature phones versus smartphones in Kenya?
I don’t know the exact figures but I’d say around 30-35% of the people own a smartphone. Even though feature phones are still dominant, this is changing rapidly. It is no longer a luxury, it’s a necessity. Smartphone prices have become as cheap as feature phones now, so that’s why a lot of people are switching.
*What role does mobile play in the lives of Kenyans? *
It’s becoming a part of our lives. People do most of everyday things on their phones rather than on computers. Things like payments, web browsing, navigation. A lot of apps in health, agriculture and finance are also available on smartphones now, and some of them are even on feature phones.
Do you have any results that you can share?
We have around 60,000 downloads of the app already, and it’s increasing. We are not number one but we’re getting there. The feedback from our users is really positive so we’re excited about going forward.