The National Transport and Safety Authority (NTSA) is set to audit companies operating matatus to weed out those that have not formalised their workers' employment .
The NTSA requires that the 707 saccos and companies provide written contracts with their employees in compliance with labour laws and regulations, including statutory deductions, as well as health and workplace safety.
Non-compliance has been linked to increased road carnage as drivers rush to hit unrealistic targets set by vehicle owners.
"We will be doing an audit on the saccos to weed out those that do not have robust internal policies, including employee contracts that take care of workers' welfare," said Mr Samuel Musumba, NTSA's road safety strategies and county coordinator.
The NTSA regulations of 2013 demand that prior to being issued with an operating licence, public service vehicles (PSVs) must submit contracts of the drivers as well as a staff list accompanied by their job description and qualifications.
Failure by saccos and companies to effectively carry out their operator roles of has caused individual PSV owners to retain control and management of the day-to-day running of their vehicles.
Without contracts, drivers lack job security and have to deliver on targets set by the PSV owners or risk losing their jobs.
The rot in the matatu industry has slowly crept back as crew return to their bad old ways, making a mockery of the Traffic Amendment Acts 37 and 38 that came into effect on December 1, 2012.
The reforms aimed at enhancing safety and comfort in public travel had raised hope in an industry, which has, for a long time, been synonymous with chaos.
With the amended laws came hefty fines and penalties for violations such as careless and dangerous driving, failure to wear uniform by public service vehicle (PSV) crew, carrying excess passengers and speeding.
Similar efforts by former Transport and Communications minister John Michuki in 2004 had restored order in a sector that was marked by impunity, and deaths caused by rogue crew who operated poorly maintained vehicles.
Michuki died in 2012 while in the Environment ministry.