Pretoria University GIBBS Case Study | Author Unathi Hlathi
KHOMBA The Technological Digital Force to the Taxi Industry of South Africa and Africa.
“The Main thing I am passionate about using technology is to solve African problems , with African solutions. As a Black African, My passion is to solve problems for Black African people, as it relates to home “Sizwe Cele, one of the founders of Khomba.
Executive Summary:
This case study will be introducing an innovative African company by the name of Khomba, Khomba is an African company that has been considered to be truly innovative. This case will be drawing on models, perspectives and evidence explored by Khomba from the conceptualization stages of their products, market research, implementations, challenges, and future endeavors the company plan to embark on. The aim of this case study is to enhance knowledge on some of the African companies that are introducing and implementing ways of enhancing innovation, technology, digitization, and the evolution being implemented in Africa for Africa.
KHOMBA
This case will be focusing on KHOMBA , a South African Company, for Africa. Khomba was founded by Meco
Mugnaioni (CEO), Hervé Kasongo (CFO) and Sizwe Cele (Chief Innovation officer ), and some internal stakeholders which are multiple investors. Khomba is a transportation technology company that focusses on movement of goods and people in Africa. This has been done by digitizing informal transportation sector, we have been able to solve problems for associations, commuters and owners.
This company was founded to solve problems faced in the transportation technology company that focuses on movement of goods and people in Africa. This has been done by digitizing informal transportation sector, Khomba has been able to solve problems for associations, commuters and taxi/mini bus owners. This solution was driven by the gap of the public transport system from the country’s public and private sectors, where they found it challenging to keep up with the constant changes and movement of minibus taxis, trains and buses.
The isolated Public Transport System to commuters , unfamiliarity of Public Transport systems and related information in South Africa, the struggle that was faces by commuters and the taxi association in managing the movement of goods and under utilized resources in the transport industry ( high focus on the Taxi industry).
Khomba solved that problem by creating a virtual network of all transportation points from minibus taxis, buses to trains by means of Integrated virtual network of public transport and interface it through web and mobile apps; Creating and consolidating a public transport web/app. Khomba further introduced remote control tracking & diagnostics through web/app for the taxi associates. Not leaving out innovating some of their traditional sectors of rent out minibus taxi’s during down time and also Plugging minibus taxis into different sectors to serve as a transportation and delivery service.
Overall Status of the company:
Khomba was established in 2016 , where founders of the company saw a gap in the market where they saw that there was no way for commuters and tourist to find information about Taxi ranks and routes, even though they are technologically advance and savvy. Also the commuters that would finish their work shift later than the normal schedule taxi route times, would be deprived of transport to get from work to home and not even have information on how they would be able to book an affordable way to commute (Taxi ) when the need arise.
Digitization was key to ensure that Khomba has a brand mark and a niche, which would allow them to enter the current existing traditional transportation market for commuters and taxi associates. This the lead the team to embark on findings solutions to the gaps that had been evident to them in the time of establishing Khomba.
This case study will be focusing on the Taxi Industry in particular and the innovations that have been put in place to their traditional ways of working to move the Industry to a 4IR ways of working.
Due to the isolation of the public transport system from the country’s public and private sectors, it is challenging to keep up with the constant changes and movement of minibus taxis, trains and buses. Key aspects being:
• Isolated Public Transport System
• Unfamiliarity of Public Transport systems and related information by commuters ( locally and international
tourists as a whole)
• Struggle in managing the movement of goods by the transportation associations
• Underutilized resources in the taxi industry ( consideration of possible logistics growth , from current
traditional word of mouth transportation ways of working)
However, one needs to have a full understanding of what is Business innovation, as a whole . Business innovation in theory is “when companies implement new processes, ideas, services, or products with the goal of boosting the bottom line. It could mean launching new and improved products or services (which can lead to higher revenue), making an existing process more efficient, or solving a current business problem (both of which cut down on costs and save time). A business focus on brainstorming, design thinking, or the establishment of an innovation lab can drive business innovations. The key element of innovation is that it drives revenue for the company.”
Khomba is classified as an innovative company because they have embarked on solving a current business problem and using their knowledge and experience to introduce solutions to the transport sector that will enhance and improve the taxi industry and other transport sectors which are existing to have more efficient processes.
The Global knowledge ( through projects that each founder of Khomba embarked on, in collaboration to their goal of living for Africa), that has been obtained by each of the founders of Khomba has ear marketed and embedded technological growth for Africa’s future generations as a whole. Khomba has embarked their business to ensure that they leave a mark on humanity and plough back to the community of South Africa and Africa as a whole.
Identification of the problem statement/ Summary of the evaluation done by Khomba:
Figure 1: Key drivers for Khomba problem solving methodology.
The business innovation methods used was an incorporation of collecting data, engaging with the stakeholders, management aspects to ensure prioritization of ideas by the team, measurement with clear identification and tracking of the impacts of the proposed solutions and finally automation implementations. One aspect that came into spark the drive of the ideas shared in this case was when Sizwe mentioned the trigger of their team introducing their business into the market. To make us have a feel and understanding of his teams main reasoning behind the founding of Khomba, He mentions that their trigger was that , “We just felt there was no way to find information about Taxi ranks and routes. Plus people who work late (restaurants etc. where can they hire a car and how?)”Sizwe explained in details, which gives the critical thinking that they were not only looking to venture in a business to make profit , but the business was driven on the empathy their Team at Khomba had for of our South African and African commuters as a whole.
It is rare to find an innovative company that would have a vision aligned to people , more than profits. Yet is also clear in their challenges that they did not have readily available funds to make the business a success. The Khomba founders has to put their heads together, loose their pride and fears and go out to the world to look for funding for a cause they believed highly that it would help the private and public transportation sector, and not only that, but also move the traditional ways of working in the Taxi industry to be globally recognized as a sector that was not rigid to transverse into the next well talked and written about 4IR initiatives.
Below is the details and methodology used by Khomba in identifying the trigger and the root cause analysis to ensure they were embarking on a solution that would solve the problem and ensuring maximum solution driven changes for both the commuters and the taxi associations as a whole.
One of Africa’s best drivers of innovation is technology. Considering the strong assumption that as South Africa has been largely impacted in the past to benefit fully from the first and second industrial revolution; yet
expectations were high to evolve from that to align with the worlds drive to be in the fourth industrial revolution to be globally relevant. It is always exciting the moment it has having technological and creative solutions which allow every decision that a business makes is centered around how you are ultimately benefitting people, and everything else will fall into place”
Sizwe with passion highlights the main trigger to the start of the journey of Khomba, as he explains with passion reasons why they started Khomba “We just felt there was no way to find information about taxi ranks and routes. Plus people who work late (restaurants etc. where can they hire a car and how?) “. This opening him and his partner to the now well known Khomba in the Taxi Industrial eyes and the transport sector as a whole. The Khomba Team embarked on a marketing research strategy using the marketing frame work of digital marketing and using the 7 P’s of Marketing mix (Looking at the impact of the problem through the lenses of Price is will cost to introduce the solutions they had in mind during their brainstorming sessions, physical evidence, people impacted, the process that is impacted , the places impacted the product that they will have to implement to solve the problem ,and how they would need to promote the product to the customer segment identified to be impacted by the changes they were planning to introduce into the sector). Using this methodology helped the team to have a solid strategy to identify their market and how they would embark in closing the identified gaps.
Figure 2 : MTN Taxi rank – one of Khomba’s face to face research locations.
To achieve this they needed to embark on a journey where they had to understand why this problem was not being looked in from the industries perspective. This however had a huge impact on their time, because studying the industry lead them to embark on having to do two types of research methodology, which was using both the Quantitative and Qualitative approach in solving the problem. Even though some of the remembers felt this would be taking a long process to get to the end goal , through understanding their vision they agreed to take this route to allow them full and thorough analysis of the root cause. They specifically focused on doing Observational research, focus group research, also looking into survey research and experimental research from what the Taxi associations had tried to implement in the past to solve this problem.
They then closed of their research by looking at the findings and conducting the last research which was
behavioral research , as this was to cross reference the numbers received in their analysis to the customer
behavioral patterns. The four founders embarked on a face to face interview period to get the full picture and
impacts their solution would bring to the community as a whole and how it would benefit the market. Their
analysis and data capturing strategy compiled of strategies on going to taxi ranks, documenting routes on our phones…. Meeting associations, having deep conversations about their problems.
This was done by the Team going to all the remote locations, interviewing the commuters, the taxi association, the taxi owners , taxi drivers and also representatives of the South African transport industry. Using check sheets and questioners they embarked on a traditionally method by walk the process that led to the challenge, which would help capture data that was linked to their personal experience and desires as the founders.
In the brink of the interview what stood out the most was that Sizwe mentioned that. ” We focused on
understanding their challenges first and then would come up with ideas then run POC’s. I mean I remember we would spend every 3 weeks going back to the associations, show them what we come up with, they would give us feed back and more ideas and we would go back, design and build, or just refine then once the solution is close enough, we would just do proof of concepts until we have it running well ”, showing clear evidence that this rigorous process was not a walk in the park for them at Khomba.
Sizwe also highlights that this strategy helped them a lot to have more solutions that they would implement
additional to the solution that they had in mind when they started the research. He also highlighted as a point of focus that when embarking the journey to go to the people to understand the peoples needs was driven on their the views that ” The taxi industry was already making money, so we need to learn how they work and build things based on that.” This putting emphasis on also they wanted to ensure that they add value to the transport industry in a economical growth vision using technology.
Methodology used after research consolidation:
After rigorous long marketing research; the Khomba team set down to put the solutions they had in mind on paper. Their company strategy followed the well know understanding and segregation of innovation using the four ways that business innovation can manifest , which are product innovation, process innovation, marketing innovation, and organizational innovation. However Khomba focused on the aspects which will be elaborated below:
With the staged of innovations followed, Sizwe highlights the time it tool them to develop and implement all these innovation, with a sigh to emphasizes the amount of work that was inputted in to the stages , Sizwe goes on to mention that it took them ” 4 years ! For each product we created, it was centred around understanding the challenge. Some challenges took us 3/4 months to find and solve for, some took 2 years, some haven’t even been solved but we pushing through ”Sizwe elaborates. To this day this statement has again clarified what Carol J. Steiner’s philosophy on innovation implies when He states that ” Philosophy of innovation is not presented as a
means for determining why innovation succeeds or fails. Instead, it provides a framework for assessing
organizational or personal approaches to innovation. In other words, it gives managers a means for understanding and interpreting the human elements of particular innovation projects. ” which clearly defines why the Khomba team did not tire to get to the final destination of their vision.
Product innovation – Khomba already had a software that would be able to assist in the implementation of the solution before they had introduced Khomba. Their initiative was aiming to significantly improved products that had already been invented and implemented in the sector. Their innovation included making the same product with better components or a new product that’s more user-friendly for the taxi industry. This was achieved were they took their existing designed software and incorporated this with existing hardware and invented a new improved system to be used by the Taxi associates.
Process innovation was also one of the chosen innovation where Khomba looked at new ways the taxi industry could deliver its service. This was done by introducing a software app that would allow the commuters to have access of all the Taxi ranks and their taxi fares digitally. Sizwe had already done vast successful projects in the digital space , so it’s the tool that He had in his hands already that came into fluctuation in innovating the taxi industries current market.
Marketing innovation has to do with the way Khomba changed the views of how the commuters view the taxi industries services in the current market , and how the service appeared to customers.
Organizational innovation this where Khomba looked into how to emphasize change using a strategy that
highlights to the transport sector and the Taxi industry the big picture changes that a business can undertake to improve performance of their fleet.
Problem solution strategy :
Khomba looked into solving the problem of services availability in the taxi industry and also improving on the Taxis wellbeing. And to solve these problems in a basketed overview Khomba looked at ways to solve the problems mentioned by creating a virtual network of all transportation points from minibus taxis, buses to trains:
• Integrated virtual network of public transport & interface it through web and mobile apps.
• Create and consolidate public transport web/app.
• Remote control tracking & diagnostics through web/app.
• Rent out minibus taxi’s during down time.
• Plug minibus taxis into different sectors to serve as a transportation and delivery service.
Taking high note that with the current strategies Khomba is not limited to the solution presented in the case study alone.
Challenges experiences by Khomba:
During the implementation phases the main challenges that Khomba experienced was firstly the major impact of raising capital and accessing taxi associations but it’s a lot easier now for them as the taxi industry associations are very diverse and they welcome change, a lot more open minded than most people who would be seeing a solution for the first time in their sector.
The three key innovations that Khomba as a Company has demonstrated:
When Sizwe was asked about the opportunities that He saw for Khomba after the research ; his response was
that “There are so many of them , I mean at first we just wanted to be an app that helps commuters find ranks and taxis, but we saw there’s value to seeing the taxi in real time, which then opened up opportunities for us to track the taxi for the commuter but also generate revenue by creating a stand alone tracking and telemetry product (Khomba Move) licensing it to operators and insurers “, which lead us to have a deeper interest on these innovations that Khomaba embarked on.
The key drivers of the innovation for Khomba was value migration , the Increased demand for accountability when it comes to owners ensuring their taxis had valid permits and also supported in ensuring the taxi associations has visibility of each taxis permit expiry dates and renewal dates; this was in aim to reduce the penalties that were being enforced to the taxi associations due to invalid permit holders in the sector , and discontinuation of routes that are not complying to the rules and regulations of the taxi industry by the transport authorities. This would also be an economical success in ensuring greater availability of useful technology and enhance social responsibility by the commuters. Not forgetting Khomba’s driver which was driven by the founders’ identification of a gap in a market.
Below we will further elaborate on the three significant innovations that have been implemented by Khomba:
In 2017 First version of Khomba Commuter was implemented and introduced in to the market, this was by means of the Commuter App , which is an App that was developed from Sizwe’s previous etxtravagant workmanship with companies in the USA , Europe and Asian regions to name a few. The aim of the Commuter App was to help commuters find ranks, routes and even book/hire taxis without having to go to the ranks and look for taxis without prior knowledge of the taxi. This was to also aim on enhancing commuters safety in the areas that they are not familiar with and reduce current crimes that commuters may be exposed to , in cases where the criminals would have an alert that the commuters is not familiar with the area, leaving the commuter to be their target. The commuters would also be fully aware of the estamted charged fees for the taxis that they wish to embark on.
In 2017, First version of Khomba Commute was introduced, which helps you navigate your way to a taxi rank, provides you with all the necessary information you will need to ensure a smooth and safe trip to your destination.
Figure 3 : Khomba commute navigation steps.
In the same year ,Khomba Driver was introduced. Khomba Driver lets you track and communicate with all your drivers, queue marshalls and patrol officers. This app is useful because it helps with tracking and finding lost items such as driver’s cellphones. Drivers never have to worry about being in dodgy looking areas and feeling unsafe again. Owners can send them roadside assistance to their exact location whenever they need it. This user friendly app is downloadable on Google Play and the App Store. Our FREE Khomba Driver is a cellphone tracker that helps you track and manage your drivers. Great for deliveries, and communicating on the move.
Figure 4: Tracking system of driver.
In 2018 , Khomba went further to introduce the Khomba Move into the market. Khomba move allows owners to remotely track and monitor vehicles from their remote location web/mobile. They are able to see location, history, fuel, oil, water, driver behavior and start/stop engine of their taxis. They are also able to advice the drivers on when they can fill up and the risk of stopping on route with commuters due to fuel or predictive break downs , using the information obtained from their app.
Through Khomba Manager (a free membership management system) taxi associations can document the
routes and prices they manage. We also going to use Khomba Move and just track vehicles in their routes then map that out. In 2014, Khomba the Software Telemetry, the hardware is was sourced through a local supplier. The Telemetry service is used to control the driver behavior. The goal was to help the commuters ; then Khomba came up with the tracking unit in their cars ( As seen in figures below) ; which gave Khomba the opportunity to grow their business.
Figure 5 : Tracker Installation kit and Tracker Device kit.
One of the newly implemented tool use to read the data captured by the Khomba Tracker device and means of solving the solution is their Teltonika FMB920 is a compact and smart tracker with Bluetooth connectivity, internal High Gain GNSS and GSM antennas and integrated backup
battery. FMB920 is designed for light vehicle tracking in applications like insurance telematics, rental cars, recovery of stolen cars, public safety services, delivery transport, taxi and much more. Inputs/outputs extend device usage scenarios. Digital input can be used for ignition, door or alarm button status monitoring. Remote immobilization may be achieved using FMB920 digital output.
In 2020, Khomba Manager was introduced into the market – The aim is to help taxi associations manager membership routes, membership payments, drivers, permits etc. This was implemented after the Khomba team formed deeper relations with the taxi industry and Associates. The Tool will support in the services to control using the system; using the Khomba management; controlling their membership, permits control
measures ( Tracking of the validation)
In 2021 Khomba has merged with Hollard, aim is to reduce the access by R10000 when you claim , and will also reduce. Looking at 3 models. Insurer pays them to insure the device , then Khomba gives the insurer a bulk
averaging cars 100000 vehicles , looking at 15-20000 vehicles per insurer.
Khomba’s approach to the management of innovation:
Sizwe highlighted that, ” The issue are the relationships in the taxi industry. But also that external forces that aim to take advantage of it. This leads to secrecy but also a collective protective thing to people who in the space. But they are all intelligent and focused! “
Future :
As we closed the interview Sizwe in excitement reflects on the vision their company has to South Africa and Africa as whole by sharing some insights they want to look into and currently embarking on the development by “Digitizing taxis and making them deliver goods for retail and businesses across Africa.” Je furthered adds that the company’s aim and vision is to consider the Taxi industry, even though their strategy is not limited to this transport industry also, having an open mind that their digital platform can be benchmarked by the Bus and rail transport
industries. Sizwe highlights reasons why their aim is to early mark the industry “But we noticed that the taxi
market is a lot larger and spreads deeper into Africa versus the formal ones. We will include them but our core
will always be taxis” mentions Sizwe, as he eagerly awaits to see the outcomes of Khomba’s growth in to the
future.
He goes further to explain some open aspects to their current active running innovations , highlighting that
Khomba Commuter is not finished because mapping out the taxi routes is a lot harder than their team had
expected because the taxi associations are segregated. But with the ambition he has during the explanation he
solidifies that their Khomba team has some ideas on how to map it easily. This would be a content for another
case study ad there is a lot that is envisioned by Khomba in ensuring that all their innovative ventures go through continuous improvement and move with the times. One would wonder where one get the drive enthusiasm and the creativity to keep on moving with times ; this is yet another secret of the Khomba team that still needs to unfold.
Conclusion:
Khomba shows high potential with the innovations that have been implemented thus far, with the company’s
eagerness one will evidently see that Khomba has managed to achieve its goal on ensuring that the commuters
and the Taxi Industry is well on route to the 4IR destination. With yet many developments that they still need to
embark on as an investor , looking at Khomba would be highly beneficial in a long run. One would also require a case study to support the statement and assumptions relating to the statement below.
In closing it is recommended that Khomba should also look into the growing bus and rail transportation sector;
looking at the current developments in South Africa and Africa; to embark on a new niche market which is rapidly growing in commuter transportation and logistics as a new sector to their platform. This is based on the emphasis that the markets are not far fetched from each other and the drive aimed by Khomba would also benefit these sectors widely.
References :
Carol J. Steiner, Journal of Product Innovation Management- Volume 12, Issue 5 p. 431-440. Faculty of Science
and Technology, Deakin University, Blackburn Road, Clayton, Victoria 3168, Australia, Nov.1995.
