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Karl Muth Headshot

Economics on Two Wheels

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In Uganda, I sometimes leave my home in the morning and head toward town on a motorcycle taxi, or boda-boda. This morning, I left my compound with Tristan Burger, my research assistant, who needed to take a bus to Kampala. We took two boda-bodas to rendezvous with the bus. These are small-displacement four-stroke motorcycles with long-travel forks, usually designed for the roads of rural India and China. As with most Indian and Chinese inventions, African natural selection is perverse: only the worst of these contraptions tend to make their way to Africa.

However, Tristan's boda-boda (a Bajaj wearing more rust than paint) quickly left me behind. My rider had barely kick-started his boda (both the rider and the machine are referred to simply as "boda" by locals) before it ran out of fuel. This began the all-too-frequent ritual of using the last of the fuel in the tank. On this particular model, the TVS Star 100 4SR, the fuel pump picks up its internal combustion nectar on the left of the tank and delivers it to the thirsty seven-horsepower engine below. This means the boda unceremoniously dumps his bike on its left side, then opens the filler hatch and blows in it trying to force the last drops of fuel into the ramp of the fuel pump with the force of his lungs. Every boda in Uganda seems to know this trick, and I've now seen mouth-to-mouth resuscitation performed on dozens of TVS Star 100's. The engine started, angrily and reluctantly, and we left Kitgum Road to try and catch up with Tristan.

Why are bodas constantly running out of fuel? The TVS Star has a 16-litre tank with a 2.5-litre reserve, and its engine is rated at over 30 kilometres per litre. Some grammar school arithmetic seems to indicate a boda should only have to fill up once or twice a week in a small town like the one where I live in Northern Uganda. Yet, bodas are constantly out of fuel.

I compute the average boda ride at about one and a half kilometres (the length of a "commute" from the centre of a neighbourhood like mine to the trading centre) and the cost of such a ride is a thousand Ugandan shillings (about twenty pence at today's exchange rate). The cost of fuel is about 3800 shilling per litre. If a boda buys a litre of fuel for 3800 shilling and uses it to give twenty such rides, he should make a handsome margin of 16,200 shilling per litre net of fuel cost, minus any costs related to his motorcycle (maintenance, finance payment, and so forth). I estimate these costs could be as high as a third of a boda's income net of fuel, but this still leaves the boda at a total net income of over 10,000 Ugandan shillings per litre. This is a net income of about 3.45USD per litre. Let's assume the boda needs to get to his taxi stand in the morning and home at night and that this might consume another quarter litre or so of fuel. Let's assume the boda only works one litre per day. That boda would have a net income of closer to 3USD per day worked. If such a boda worked for one litre per day, 250 days per year, he would earn about 750USD, almost exactly 50% more than the $490USD/year GDP per person of Uganda. Why, then, are bodas often struggling?

Part of it has to do with the fuel ritual - a big part of it. Bodas will only refill a thousand shillings at the petrol station, and sometimes as little as a few hundred shillings. This means more than half of a boda's travel in the course of a day is to and from the petrol station. Also, time is lost whenever the bike runs completely dry, as it must then be walked to the nearest petrol station. There are only a handful of petrol stations in my village, and they are all nestled in the centre of town, half an hour walking for a fit person who isn't pushing a 100kg+ motorcycle.

Fuel is wasted in other ways, too. These bikes are equipped with engines optimised around cruising India's dirt roads at low speeds, not idling - yet bodas often sit idling, revving their engines at passing mizungus (white people) as a form of advertising. When the boda fills up, he does not perform the rock-to-the-left ritual, so a bit of fuel is wasted as it burns off the hot plate at the top of the reserve, rather than going into the ramp for the fuel pump.

Maintenance costs are probably higher than they're meant to be. Fuel pumps that likely last twenty thousand kilometres in India constantly gasp for fuel in Uganda like fish out of water; transmissions that might never need maintenance in Asia are torn down with frequency by self-taught mechanics with only the most basic tools. Bodas stack longer gears made for third gears of dirtbikes (conveniently and unfortunately, TVS and Yamaha use the same spline configuration) as their first gears in a bid to save gas. The gears are swapped on the sides of dusty roads near the centre of town, further polluting the transmission's lubricant supply.

Maybe bodas can only afford to refill a thousand shillings at a time. But this simplistic budget constraint argument disintegrates quickly at the end of my morning journey. I hand the boda a 5,000 shilling note, saying "apwoyo; miya alibangwen" (thanks, give me four thousand); he quickly produces my change and I see he has an additional 8,000 shilling or more in the pocket of his faded Gulf War I-era Benetton jacket.

So, it's back to an even simpler explanation. Bodas don't want to spend money unless they have to. And they don't have to until the tank runs dry. Until then, 500 shilling coins chiming in the broken zipper pocket of that long-ago-turquoise windbreaker are the Ugandan equivalent of the proverbial bird in the hand. That is, until you hear that engine grind to a halt and realise your fuel pump can't swallow coins.

So, my dear boda at the Royal Dutch Shell station on Kampala Road: You've now spent twenty minutes waiting in a queue to add 800 shillings of fuel to your tank. Why not fill up this time?

You'll make a killing.