Can electric vehicles transform ‘gig work’ in emerging markets? The World Bank studied a Kenyan startup’s bold experiment to find out. Our research, Electric Vehicle and Labor Market Transformation, reveals surprising insights and important considerations or policymakers, investors, and development partners working to develop the informal transport labor market.
The Boda Boda (motorcycle taxi) industry is fraught with multiple challenges—safety risks, lack of regulations, and poor working conditions. Yet in the absence of a reliable public transport system, two million bodas have rushed to fill the urban mobility vacuum in Kenya. Given the industry’s scale, there have been growing efforts to reform it through innovative business models.
New business models that impact driver welfare
The research began with a straightforward question. Conventional wisdom suggests that improving driver welfare in the gig economy requires formalization of employment status and higher wages. What if technology—specifically electric vehicles—could unlock new business models that achieve these goals differently?
A Kenyan startup partnered with a major ride-hailing platform to pilot an innovative approach: combining gig-worker access to electric motorcycles (called e-bodas) with employment benefits. Initially, as part of the startup’s business model, drivers received monthly salaries, medical insurance, and housing allowances as “employees” when they met corporate targets. In late 2024, the model shifted. Drivers could work under a lease-to-own arrangement, meeting weekly trip and hour thresholds to qualify for daily e-motorcycle leasing fees and eventually leading to motorcycle ownership for the drivers.
Electric vehicles made this possible. Lower operating costs improved driver economics, while battery swapping stations enabled the company to conduct real-time tracking of usage and to ensure payment enforcement. Previously, these benefits and mechanisms weren’t possible with traditional motorcycles.
The data reveals significant behavioral changes
While it was a limited, initial study, researchers conducted rigorous field research over an eight-week period, combining GPS telemetry, platform data, and extensive driver surveys. Using advanced causal inference methods, the analysis identified substantial driver behavior changes following the transition, driven in part by stronger earnings potential and clear incentives toward vehicle ownership on the part of the drivers:
- Productivity improved 37%, reflecting behavioral adjustments aimed at maximizing earnings per hour rather than merely extending work time.
- Energy efficiency doubled, consistent with drivers treating vehicles as assets rather than short-term rentals, leading to more cost-conscious driving behavior.
- Increased geographic dispersion and availability of the service, allowing drivers to take motorcycles home.
READ MORE: https://blogs.worldbank.org/en/africacan/e-bodas-are-reshaping-kenyas-transport-labor-market
