Implications of globalisation on private Hire vehicle companies in Nairobi

Abstract

As a result of liberalization of the transport sector in Kenya, hire vehicle businesses have experienced significant changes over the years due to globalization. Advanced technology has enabled the companies to carry out internet advertising through creation of their own website. In addition, advanced technology has facilitated electronic bookings and plastic money transfers. In order to remain competitive in Kenya, private hire vehicle companies have responded to the global changes by customizing their services. Among the global changes that have taken place in the public transport sector in Kenya over the last fifteen years include increased competition, technological changes, changes in consumer needs, increased operation costs due to poor road networks, increasing fuel cost and insecurity. The study sought out to determine the implications of globalization changes on the private hire vehicle companies and also establish how private hire vehicles companies in Nairobi had responded to global changes that have taken place in the business environment in the last 10 years. The target population was all the 93 vehicle hire companies with their head office in Nairobi. Due to the relatively small population, a census approach was used. Useful responses were obtained from 57 companies implying a response rate of 61.3%. Questionnaires were used to collect the data by use of the drop and pick method. The data collected were entered in SPSS and analyzed using descriptive statistics. Output was presented in frequency tables and graphs. Among the major findings obtained were that the vehicle hire compames thrived on the tourist/leisure clientele and consequently had heavy interest in the global scene. The changes in the global scene were said to have enabled the companies to access clientele abroad and many reported to have initiated market activities such as creation of the website to propagate them on this path. Other positive effects vehicle hire companies attributed to global changes were increased profits/demand (53.3%) and introduction of trackinglbetter communication systems increased costs (60%) and more specifically the escalated fuel prices and stiffer competition were among the negative effects encountered. In VIew of the findings, the study recommended that smaller hire vehicle compames be encouraged to amalgamate in order to benefit from economies of scale and that are taught on other opportunities available on the global scene that they can exploit besides marketing their products. iv