The road transport sector through two- and three-wheeler (TTW) operation, though informal, has helped fill the youth employment gap. That said, to fully exploit the employment potential for the youth, it is important to identify the constraints and skills gap along the value chain. This study sought to analyze the TTW value chain and their contribution to job creation; identify key constraints to the growth of the TTW sector; assess the employment creation potential along the value chain; and analyze the labour skills gap in TTW transport sector. The entire value chain includes imports of TTW, distribution, manufacture and assembly of the imports, wholesale and retail of TTW, operations, disposal and ancillary activities. A descriptive approach to skills gap and employment potential was used in addition to estimating employment elasticity. The study used KIHBS 2015/16 and 2005/06 and KNBS statistical abstracts data for TTW industry. The findings suggest that the impediment to youth employment is dependent on imports and negligible manufacturing and assembly of TTW in the country. In addition, most riders lack relevant skills, leading to accidents and fatalities.