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Magic Bus wins $1 million to improve commuter bus access in Nairobi

What a difference a reasonably priced seat on a bus can make. A group of four college students won $1 million to help slum-dwellers in Nairobi, Kenya, and other cities get to work, according to CNN.

The four co-founders of Magic Bus won the Hult Prize competition with their startup company that aims to help people as much as double their incomes with improved commuting. The group chose Nairobi as a test location for a cell-phone-based SMS messaging and mobile payment service to assist workers in reserving and paying for rides on commuter buses called Matatus.

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According to the Earlham College students — Iman Cooper, Sonia Kabra, Wyclife Omondi, and Leslie Ossete — Nairobi was the right place to test the Magic Bus concept.

“Nairobi has the fourth highest commuter pain point in the world,” Cooper told CNN. “That means it’s among the worst cities for easily getting from place to place, frustration levels are high, traffic jams are frequent and commuting fares are inconsistent.”

In Nairobi, 2.5 million people live in slums and most have to use networks of private commuter buses to get to work. The buses have inconsistent schedules and only seat 33 to 45 people each. While there are 20,000 Matatus, sometimes people wait two hours for a bus and still do not get to ride because of overcrowding.

“The loss of productivity is staggering and a daily wage worker can lose half of their daily income,” Cooper said.

The Magic Bus team used technology already at hand and in use. They knew 80 percent of Kenyans own phones and frequently use them for SMS texting. There is also a commonly used mobile payment system called M-Pesa that Kenyans use to pay for groceries and bills.

The Magic Bus application lets Kenyans pre-book and pay for seats on buses ahead of time. With reserved seats, the people do not have to wait for hours and are sure they will have seats. They also will not be forced to pay the frequent fare increases charged by an overall inconsistent bus system.

The team of students ran their test for nine weeks with a private bus network. During the test, more than 2,000 tried the service. Overall, the team sold more than 5,000 bus tickets. When they surveyed passengers,  about 25 percent of 1,000 respondents saved an hour per trip.

On the basis of the Nairobi test, Magic Bus won the Hult Prize. Now the team plans to expand Magic Bus to cover all of Kenya and then have service in 11 more cities in Africa the following year.

“For millions of people, reliable transportation is often the first test toward accessing good, services, jobs and education,” Cooper said. “We shouldn’t overlook improving transportation because it can have meaningful impact on society.”