The making of a fintech company that helps taxi drivers own cars
What you need to know:
- “They remit to us the same amount they would remit to vehicle owners. Only that in this instance, they are paying to own the vehicles.
- "Ndai Africa removes the role of the middleman, making the driver a business owner. Because of that, the vehicle is handled better, and the drivers become more accountable and responsible,” Abedi explains.
- Abedi’s background is in banking. He had five years of experience under his belt before switching to techpreneurship. In his position, he is in charge of the company's growth and expansion.
Abedi Muange, 33, is the growth director at Ndai Africa, a fintech established in 2018 to provide mobility entrepreneurs, especially taxi operators, the capability to transition from being employees to owning vehicles.
“When the culture of online taxi hailing came into the country and vehicle owners employed drivers as a way of investing in the business, a problem emerged. Many vehicle owners had a challenge dealing with drivers who mishandled the vehicles or failed to remit revenue. This is the problem Ndai Africa initially sought to address,” he says.
The owner of the vehicle had to incur the cost of buying and maintaining the vehicle, including the cost of repairs and servicing it. The situation was made worse by low profit margins because some drivers were not committed to the work. The second challenge was managing the drivers.
“The drivers did not have any incentive to take care of the vehicle because the vehicle was not theirs. This led to many disagreements between drivers and owners of the vehicles,” he says.
Ndai Africa buys vehicles and loans them to drivers for a period of between 36 and 48 months. If the agreed upon terms are met, the vehicle ownership rights are transferred to the driver.
“Drivers sign a drive-to-own contract which states that once a certain amount of money is remitted weekly, within a span of 36 to 48 months, they will have paid for the vehicle and the logbook is transferred to their name,” Abedi explains.
This solves many problems because the driver deals with Ndai Africa and not with the vehicle owner. The drivers also handle vehicles better because they know that once the payment is done, the vehicle will become theirs.
“They remit to us the same amount they would remit to vehicle owners. Only that in this instance, they are paying to own the vehicles. Ndai Africa removes the role of the middleman, making the driver a business owner. Because of that, the vehicle is handled better, and the drivers become more accountable and responsible,” he explains.
Abedi’s background is in banking. He had five years of experience under his belt before switching to techpreneurship. In his position, he is in charge of the company's growth and expansion.
Since Ndai Africa officially opened its doors, they have received over 1,000 applications from drivers who want to “drive to own”.
“We have vetted 665 drivers who have qualified and they are waiting for us to deliver the vehicles. If we get the vehicles today, we are ready to transition these drivers into potential vehicle owners,” says Abedi.
How difficult was it to set up such a business?
“My cofounder and I invested money from our savings to buy a few fleets to start with. Basically, we bootstrapped the business and plowed back profits. So far, we have leased 100 vehicles,” he says.
Ndai Africa has full-time employees – two directors, a head of operations, a fleet manager, and a customer service officer. Currently, they have a vacancy for a fleet manager. He or she must be a graduate who can comfortably work in a fast-paced environment. They outsource services for other departments such as HR.
“We hire people who fit into our visions and so people management is not a challenge. My advice to other business people is, hire properly. Get the right people for the right job. That makes management easier,” he says.
Currently, Ndai Africa is only operational in Kenya.
“We are looking for partners who can give us grants, equity, convertible debt, working capital, or angel investment. Once we get this, we will better meet the demand and quickly expand to Rwanda, Tanzania, and Ethiopia,” he says.
“In our drivers’ pool, we have women who are interested in owning vehicles but many of them are not able to pay the amount of money per week that men pay with ease. This is because they can’t start working as early or stay on the job as late as the men. Grants will help us facilitate these women and contribute to alleviating unemployment in the country.”
His greatest business lesson is, if you fail, implement the lessons you have learned.
“When you run a business there are areas you will realise you are not succeeding because of certain things. Do not dwell on these, move to the next step. Learn from the mistakes and move on.