Historically, the Kenyan government under British colonial rule had built its major city infrastructure and designed its public services with the primary good of Kenya’s then European elites in mind; as sociologist Jacob Rasmussen found: “few public services were provided for the African population.” Even after achieving independence in 1963, the transportation needs for urban Kenya’s growing African working class were not sufficiently addressed by the government. The Nairobi City Council (NCC) had granted a private company, the Kenyan Bus Service (KBS), the right to a 50 year monopoly in the public transportation sector in return for some control over prices, schedules, and routes [Heinze 8]. However, the KBS was quintessentially flawed: it was “readily accessible on foot [primarily] in the affluent Western part[s]” and too expensive for even the African middle class to regularly afford. As Kenya’s urban population grew exponentially [Rasmussen 418], so did its matatu use.
Despite this, the matatu industry struggled to gain legitimacy in the eyes of the government. The NCC refused to allocate bus terminals for matatus, viewing the industry as an illegitimate loose collection of unlicensed taxis—so instead, in the matatus adopted KBS routes and terminals [Kapila et al 222]. The Kenyan government and NCC confronted matatu operators on a case-to-case basis wherein operators “were often caught and given large fines..[for operating] an unlicensed taxi” [Heinze 9]. Matatu operators who were fined would often publicly protest their charges [Heinz 9]. Thus the 1950s to 1960s, saw no comprehensive government action to regulate the matatu industry as it had yet to be recognized as an industry at all.
In the 1970s, a brief golden age of license-exempt matatus under President Jomo Kenyatta gave hope to matatu lobbyists that their efforts to gain “pirate-taxis” recognition as a legitimate industry could be possible. Matatu organizations began to grow in power alongside matatu use. Read more about government involvement and the self organization of the matatu industry in deregulation, re-regulation.
The 1980s saw a subtle shift in the major players of the matatu industry take place: a growing number of matatus were no longer entrepreneurial enterprises of owner-drivers, but a hodge-podge of business owners, drivers, and touts—three categories that began to overlap less and less. A 1982 study by the Mazingira Institute, a non-profit activist organization based in Kenya, found that 37% of matatus were owner-driven while 63% were employee-driven [Kapila et al 149]. The owner-driver relationship began to give way to an employer-employee relationship instead. President Daniel arap Moi’s aggressive enforcement of the newly passed PSV(M) vehicle standards had inadvertently opened way for higher costs “chai” bribes, and raised the initial cost of investment needed in order to own a matatu vehicle. Whatmore, new money from government ministers and wealthy businessmen poured into the industry, “increas[ing] the number of matatus by 30 per cent from the previous decade” [Mutongi 553-554]. It was difficult for existing matatu owners, most of which operated second hand vehicles running beyond its recommended length of use [Kapila et al 171-172] to compete with this surge of new money funding new operations of imported minibuses.
The barrier for entry into the matatu market had risen sufficiently that prospective newcomers into the matatu market were discouraged, and indeed found it more difficult if they were to start a business doing so, from owning and driving matatus instead of merely signing up to drive for a matatu owner. In this way, the matatu owners and its associations emerged as key players of the industry.
The Matatu Industry 