HomeAnalysisWhy EcoCash is losing Taxi Wars

Why EcoCash is losing Taxi Wars

A PHENOMENON called invisible entrepreneuring (not entrepreneurship) explains why EcoCash is failing to take root in Zimbabwe’s commuter taxi (kombi) industry. EcoCash is involved in a taxi war, albeit, an invisible and sophisticated one. The same phenomenon also explains why the chances of failure of the pay-using-an-electronic-card innovation being tried in South Africa’s 6-8 US dollar kombi industry are very high.

Brett Chulu,Consultant & Researcher

This article presents to a wider audience ideas based on a formal academic research done on the commuter taxi industries of South Africa and Zimbabwe. Harvard Business School scholars do the same when they publish ideas from their research in the Harvard Business Review to reach masses of people who may not be interested in reading academic journals.

As indicated in the research, the most problematic issue for the kombi crew (driver and conductor) turned out to be how to maximise personal income to meet personal needs and wants. To solve this problem of prime concern to them, kombi crew engage in invisible entrepreneuring. Put more forcefully, the desire to maximise personal income or gain is what causes invisible entrepreneuring.

So what on earth is this animal called invisible entrepreneuring?

Invisible entrepreneuring is the repeated tendency by the user of an owner’s asset to act and behave as if they were the owners of the asset. Kombi crew act as if they were the kombi owner. They take business risks without consulting the owner. For instance, kombi crew can decide to invade other operational routes, risking heavy traffic fines. They do it anyway. Also, they exploit, and at times, deliberately create business opportunities without consulting or letting the owner of the kombi know. There is the legal owner of the business. Then there is also an invisible owner, the operational crew. That’s how it is in this business. In short, the operational crew award themselves entrepreneurial licence. The reason they award themselves this entrepreneurial licence is simple: they do this in order to boost as much as possible their personal incomes, no matter how small the gain may be.

Invisible entrepreneuring is very sophisticated — it consists of over 20 patterns of kombi crew behaviour. Of these patterns, three fully explain why mobile money payments in kombis botched in Zimbabwe. My research identified these patterns as compete-collaborate, micro-margin sensitivity and targetising. Operational crew view the owner as both a rival and ally. It’s a game in which the kombi crew is simultaneously on and not on the side of the kombi owner.

The kombi owner is a friend-foe. It is a salacious paradox. Fortunately, it can be explained. Enter targetising.

Targetising is the ever-present push to meet both the owner’s and operational crew’s personal private targets.

There is a subtle point here. There is a visible performance target as well as an invisible one. This invisible target is set by the operational crew community — an often underestimated but very powerful social structure. The invisible performance target is always higher than the visible one. The difference between the visible and invisible performance targets contributes to a pattern of behaviour called invisible dividending.

Invisible dividending is all about earning a personal reward for engaging in invisible entrepreneuring. To protect and therefore keep earning invisible dividends, operational crew have to make sure the owner’s visible targets are met or nearly met (a deliberate margin of error). The data I obtained from the research shows that these invisible dividends range from 20-25% of operational income.

Micro-margin sensitivity is a pattern of behaviour in which operational crew are ever alert to the slightest of opportunities to enhance personal income gains, no matter how small. For instance, the space underneath the seats of a kombi can be utilised to pack goods and generate income that will remain invisible to the owner. Equally, micro-margin sensitivity is about being watchful for the slightest of risks that may bring personal income losses, no matter how small. Sudden breaking, over-speeding, for instance, are all driven my micro-margin sensitivity.

Operational crew are extremely sensitive to opportunities likely to be gained or lost as presented, for example, by tiny spaces, fractions of time, and even fractions of money. These itty-bitty opportunities may seem insignificant to other people. They are significant insignificance. Ironically, minor is major in this industry. The reason is idiot simple. In a low income environment it appears that the smallest of margins or gains tend to be super-valued. People at the margins of an economy seem to be very sensitive to any minute gain or loss. Fifty cents is not just fifty cents. It’s a hell lot of money in this industry — its value is measured by the job(s) it can do for the kombi crew.

So why did EcoCash bomb in the kombi market?

Operational crew naturally frame events as either potential competition or enhancers of their potential personal gain. As invisible entrepreneurs, operational crew view mobile money payments as a threat to potential micro-margin gains. Fees to be paid to the mobile money operator, though relatively small, in the eyes of operational crew are a significant loss of personal income, no matter how marginal. Mobile money payments in kombis flunked because they sided with the kombi owner’s interests.

EcoCash unwittingly started an invisible taxi war with the operational crew. EcoCash seems to have bet the wrong horse. There are two bosses apparently, the legal owner of the asset and the invisible entrepreneur. The invisible one is more powerful than the visible one because s/he has control over operations and information critical to operations. Mobile money service providers goofed by underestimating the invisible power of operational crew as a tightly knit community of invisible entrepreneurs.

Naturally, mobile money service became a foe of the operational crew because it threatened to reduce or even eliminate a portion of their invisible dividends. Faced by an enemy, operational crew simply exercised their entrepreneurial licence and pulled the plug on mobile money payments.

Mobile money failed because it threatened to wrest the invisible entrepreneur’s small margins of time and money.

Mobile money service providers entered a slugfest in which the grand prize was bread crumbs (small sums). It’s a taxi war, an invisible one though. The only difference with the physical taxi wars is that no blood is being spilled. We now know that mobile money service providers were TKO-ed by invisible entrepreneurs. Should they fancy a rematch, the same fate is almost guaranteed. It’s not my opinion. It’s the opinion of this phenomenon called invisible entrepreneuring.

Technology may plug the current opportunities for invisible entrepreneuring, but will not destroy it. Invisible entrepreneuring is most likely to manifest itself in new and sophisticated ways. Technology does not have the ability to change the operational crew’s most problematic issue – desire to maximise personal income. By the way, there is a whole set of behaviours employed by kombi crew called calculated bets. What I learned is that kombi crew never engage in calculated bets unless they are pretty sure bets will pay off. Those wanting to introduce payment technologies to the kombi industry are essentially betting. Here is hoping that their bet is calculated.

Invisible entrepreneuring is not so much about the kombi industry. The phenomenon is expected to be alive whenever the following conditions kiss: poor or inadequate supervision of the use of an owner’s assets and an unquenchable desire to maximise personal income or gain from assets that belong to another person.

Chulu is a management consultant and a classic grounded theory researcher. He has published research based on classic grounded theory methodology in a peer reviewed academic journal. — brettchulu@consultant.com

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