Why increasing fare prices is not a solution for matatu operators

The matatu operators have called off the strike that had disrupted transport services on 18 May and a better part of 19 May 2026.

The transport paralysis came after the announcement of new fuel prices for the May 14 to June 14 period, which saw a sharp rise in fuel costs and, for the first time, diesel prices surpass petrol prices.

Kenya, which currently has some of the highest fuel prices in East Africa, is among many countries feeling the impact of a prolonged global oil crisis linked to tensions and conflicts in the Middle East.

The rising cost of fuel has placed matatu operators under pressure, increasing the daily cost of doing business and reducing profit margins.

The obvious question that many would ask is this: why don't matatu operators simply increase fares and transfer the burden to passengers?

After all, they are service providers and should not be expected to absorb costs caused by factors beyond their control.

That argument sounds straightforward, but in reality, it is not that simple. Increasing fares may appear like an immediate solution, but it creates economic consequences that can hurt both operators and commuters in the short and long term.

One of the basic principles of economics is the law of demand and supply. As the cost of a service rises, the number of people willing or able to pay for it can reduce.

If matatu fares rise sharply, passengers are likely to change their behaviour. Some workers may begin working remotely where possible.

Businesses that can operate digitally may reduce physical meetings and travel requirements. Students and casual workers may also seek alternatives or limit unnecessary movement.

The COVID-19 pandemic already showed many industries that work can continue remotely.

Although not every sector can function that way, the experience created long-term changes in how people approach travel and physical movement.

If fewer people travel daily, matatus could end up carrying fewer passengers despite charging more per trip.

The reality is that many households are already operating under financial strain. Food prices, housing costs, electricity bills and other daily expenses continue to consume a larger share of household income.

Transport is a necessity, but there is a limit to what people can pay.

If fares continue increasing, many commuters may start making difficult choices. Some may walk longer distances, others may reduce the number of trips they make each week, while some may avoid certain activities entirely.

In the end, higher fares may not necessarily translate into higher earnings for operators if the number of paying passengers drops.

Transport markets are competitive even when it may not seem so.

Passengers may shift to alternatives such as motorcycles, car-pooling arrangements, employer transport systems, buses with lower charges or even cycling and walking where possible.

Technology has also made alternatives easier to access. Ride-sharing arrangements and coordinated transport groups can quickly emerge when public transport becomes too expensive.

Matatu operators therefore risk losing loyal customers if prices rise beyond what people consider affordable.

Transport does not operate in isolation. It affects nearly every part of the economy.

When transport costs increase, traders spend more moving goods, workers spend more commuting and businesses face higher operational expenses.

These additional costs are often transferred to consumers through higher prices of goods and services.

Eventually, reduced spending power among citizens affects businesses and economic activity. A weaker economy also means lower movement of people and goods, which again affects the transport sector itself.

The burden therefore returns to matatu operators in one way or another.

The pressure on operators is real. Fuel costs are rising and operating expenses continue increasing. But relying solely on fare hikes may only provide temporary relief.

Long-term discussions may need to focus on wider solutions such as reducing operational inefficiencies, reviewing taxes and levies on fuel, investing in more fuel-efficient vehicles and creating policies that protect both operators and commuters from sudden cost shocks.

Increasing fares may solve today's problem on paper, but it risks creating bigger challenges tomorrow.