Update on my research driving on Uber/Bolt
If you missed previous episodes, click here for episode 1, here for episode 2 and episode 3
I regret not doing this research prior to starting Pukena Cars & Drivers. We would have not lost so much money to drivers’ defaults.
I realized that under the rental arrangement where a driver rents a car from Pukena and remits a particular amount set for him on weekly basis is not sustainable.
Here are my reasons…
First of all, the ride sharing model is primarily designed to favour those driving their own cars or by extension those who are motivated by the objective of owning the car they are driving after sometime.
Outside this two, no driver is disciplined enough in character to work to meet up to the targets set. They feel they are slaving for someone else to reap where he did not sow.
You see, the obvious challenges of this business include bad roads, Lagos traffic, insecurity on our roads and the dwindling rates of rides…
Taxify would promise 1500 for completing 4 rides between 5am-9am. Truth is, traffic would make sure you only complete 2 rides before 9am. Completing 10 rides on week days is a tall order.
I could only achieve that on Sunday between 9am-9pm to be qualified to win extra 2500 on top of my 15k daily earnings. But note that traffic was very minimal because it’s Sunday. Now compare that to week days.
For a driver under rental program to meet up under this conditions, he would have to spend more hours than I did on the road. Hence you see some of them working by 12 midnight. They are trying to make extra to take care of their family after paying the car owner. This routine can only be sustained for 1 month before they start revolting or the car starts giving serious issues due to overuse.
Then they start defaulting or return the car damaged.
But compare this other scenario.
A driver drives a car he knows if he can only pay the owner enough to become the owner of the car after like 1 year, chances are, he doesn’t mind if he works long hours or short hours but he will be committed to taking good care of the car while remitting the agreed money weekly.
This is human nature. We can achieve impossible feats if there is a glory ahead… in this case becoming a proud owner of a clean corolla or camry after 1 year.
This is the only way this business can be sustained. This is the only way Pukena can have up to 100 cars on its fleet.
To the owner of the car (individuals and car dealers), it’s like selling off your car with a higher profit margin after a year. It’s still a good business. The main catch is that your decision to accept installments on the car has empowered a family. You will not be called upon to repair the car during this period and if the driver defaults for 2 weeks, the car is retrieved and the previous installments forfeited by the driver. It’s a win win situation.
Pukena’s role, therefore, anchors on been the broker of such deals by connecting verified drivers and reliable ones to get a verified car from car owners and earn a management fee for successful deals. Simple.
I have been suffering in vain for 2 years! I know how much my company has lost paying car owners from our pockets when drivers default. According to our records, we have lost close to 2 million naira in the last 4 months settling driver defaults and claims to damages by car owners.
You can’t build a business on this sort of model.
It’s time to switch!
We are going exclusively Hire Purchase!
Starting from next month, car owners on the Pukena platforms will be notified to switch their contracts to hire purchase or retrieve their cars. Driver contracts will also be adjusted. Better days ahead!