Locomute is bringing car sharing to SA – this is how they hope it pays off
Locomute co-founders, Ntando Kubheka (35) and Tumisang Marope (38) want to bring flexibility to the car rental industry with their car-sharing startup.
Kubheka, CFO, and Marope, CEO launched Locomute in June 2015. The co-founders met while completing their MBAs at the Nelson Mandela Metropolitan University Business School. Locomute is a result of an assignment they had to complete to develop a disruptive business plan for a final year module in 2014.
“After receiving positive feedback from lecturers, fellow classmates and industry players, we then took a decision to formally take the business to market.”
The service is targeted at users who need the use of a car for short trips (think a trip from the Gautrain station to several meetings and back), or even one-way trips. There is also a short term rental option of up to three months available.
Users access the service through an app which allows them to reserve a car, locate the nearest one and to also unlock the vehicle. Cars can be accessed in public areas including shopping malls, street parking, filling stations. At the end of the trip, users lock the vehicle using the app.
The big draw of the service is unlike standard rental services, the user only pays for the exact amount of time they use the car and fuel, insurance, and parking are all included in the cost.
Locomute is currently operational in Johannesburg, Pretoria, Durban and Cape Town. There are plans to expand to university cities like Bloemfontein, Port Elizabeth, East London and Stellenbosch by the end of 2016.
Locomute started with only six vehicles, today they have a fleet of 210 vehicles.
We talk to Kubheka and Marope about they didn’t let the naysayers get in their way and how shared mobility has the potential to impact the lives of many.
On confronting risk head-on
No institution was willing to be exposed to such a level of risk. As such, we invited two other partners. We all invested our life savings and pension funds to keep the business afloat.
An idea whose time has come
We offer a solution that many South Africans require; therefore, the market we seek does exist. The country’s economic outlook hasn’t looked this bleak in a very long time. As such, people are looking to reduce some of their living costs in search of a decent lifestyle and Locomute offers an ideal platform to make these wishes a reality.
The sharing economy or collaborative consumption has made waves in recent years in the US and parts of Europe and car sharing, in particular, has shown great signs in impacting the lives of many as well as economies of various countries. We want to replicate this and possibly exceed expectations by assisting South Africans in maximizing the utilization of their vehicles or simply get rid of them and instead share vehicles on our platform. We have managed to acquire both individual and cooperate customers.
Locomute also aims to cement the car sharing concept in South Africa by continuously improving the way we do business and by also teaching South Africans about the sharing economy, especially shared mobility.
“A doing mentality is our strength”
- On the differentiating factor
Locomute does not have direct competitors, however, it competes indirectly with some of the conventional car hire services. The use of technology in delivering our services is what differentiates us.
- On funding and financials
The lack of funding has by far been the biggest hurdle we had to overcome. We have had to continuously find ways to make things work in order to keep the lights on. It has been very tough but life has thoroughly trained us to be resilient and keep going despite fierce challenges.
We never really grasped how expensive running a business could be. This brings us to the issue of cash flow in a business. There is a saying that goes; “Revenue is vanity, cash flow is sanity, but cash is king.” This means that whilst it is good to meet sales targets in growing revenue, the most critical thing in a business is cash flow. There is a continuous need in a business to fund immediate needs like rent, salaries, suppliers etc., which a business cannot function without.
- On doing what it takes to succeed
We have accepted the fact that in order for the business to at least survive the infancy stage, we have to continuously believe and share the vision with everyone in the team. The biggest surprise about being co-founders is the need to perform miracles even when there is no hope. There are days where we all attend crucial meetings to acquire clients, head back to the office and assist in washing vehicles, answer phone calls in the contact center, assist in resolving customer queries, and contribute in the general administration like customer registration and billing.
We have been working hard to instill this culture in everyone at Locomute because we believe it’s the only way for the business to keep surviving in the short term. This is the difference between a startup operation and a more established enterprise. We are also not always at liberty to hire personnel every time there is a shortage of hands. We have learned to make things work.
The main reason we have reached our goals since our launch has been the ability to do things when they need to be done. A doing mentality is our strength. It’s important to have a vision and develop a strategy to live this vision, follow-through that is backed by a passion for the job and a resilient attitude is a key ingredient for us.
- On where the ecosystem is missing the mark
South Africa’s entrepreneurial ecosystem is well nourished with a pool of talented young entrepreneurs full of energy and buzzing with great ideas, there is, however, a lack of venture capital funding to make some of these youngsters’ dreams a reality. There is currently a reluctance from banks and funding institutions to invest money in startups simply because they have no proven track record.
Now, the question that we ask is, how does one prove themselves when they are unable to start? Yes, entrepreneurship is about making it work in the toughest of environments, but the nature of the history of our country and its political landscape make it almost impossible for young businesses to flourish, therefore, an increase in venture capital funders is required. This vibrant scarce group of funders are renowned for giving individuals and companies a chance simply because they believe in their ideas. They worry less about track records and experience but instead focus on potential.
- On startup advice
As cliché as it sounds, young entrepreneurs must never stop believing. A vision that is not backed up by a passion for what you do is worthless. Locomute has proven that a doing mentality bears rewards. Keep doing what you need to do until doors open and you will make an impact on the South African economy.