Drivers get a motorbike: The Ugandan with a clever model for e-commerce delivery
Brought to you by: The Anzisha Prize
Last year, Ugandan business student Daniel Mukisa placed an order on an established e-commerce site for a pair of shoes. He was promised same-day delivery, but they took about a week to arrive. And this got him thinking.
“I figured out, together with a colleague, that this could actually be a business opportunity that no one was really noticing.”
His colleague was also working at an online retailer in Kampala, and was witnessing similar struggles with same-day delivery. Poor road infrastructure and heavy traffic congestion made it difficult for these businesses to deliver their goods in a cost-effective and timely manner. And while e-commerce companies were growing in the market, many struggled to invest in an adequate transportation fleet – burdened with the cost of maintenance, training and insurance of both vehicle and driver.
For Mukisa, the challenge sprung a question to mind: what if there was a company that online retailers could outsource their deliveries to?
The duo started piloting the service in November last year and by January they had formally registered their company, Transporter Corporation. Today it hosts a fleet of 35 motorbikes – the most efficient way to get around Kampala’s traffic – and delivers between 100 and 150 orders a day for clients such as Hellofood.ug and GoodsExpress.com.
Mukisa, who is only 21, has been selected as one of 12 finalists for this year’s Anzisha Prize, Africa’s premier award for young entrepreneurs.
The company’s first motorbike was financed through personal savings that both co-founders had accumulated from previous jobs. However, in order to be able to handle deliveries for Hellofood, the founders had to grow capacity fast.
“Hellofood said they wanted us to have seven bikes in order to do a test run with us. We told them to give us one week,” said Mukisa.
They managed to secure a loan from a friend in exchange for equity, and purchased bikes on credit. After a month’s trial, Hellofood decided to use the service on a permanent basis. The business has since grown organically, alongside demand.
A lot of the company’s rapid growth has also been due to its strategic operations and innovative employee remuneration model. In terms of operations, Transporter assigns motorbike drivers to its clients’ locations, so when orders come through, there are drivers waiting to deliver immediately.
Furthermore, the business allows its employees – mostly students – to own the bike they use after a year of working for the company. This is in addition to a monthly salary.
“We decided to do this because, in the beginning, we noticed that some of the riders were reckless with our motorbikes. So to curb this we just had to tilt their mindset,” he explained.
“Yes, we reduce their salary by a little bit at the end of each month, but the system works. And now we have fewer accidents and the riders are more careful. They are more passionate about what they are doing as well.”
The founders are also in the process of developing an app for their Transport.me business, a cab-hailing service that works similar to Uber’s. Passengers can select their vehicle of choice, enter a destination, and receive a fare estimate via the app. They are then connected to a driver closest to them.
If not us, then who?
“I have had it in my mind for a long time that I have to be an entrepreneur, and I have to do something to impact my generation. I know that if there is going to be any change in Uganda, in East Africa or across Africa, then that change is going to have to come from me. I need to do something about it.”
Mukisa is currently in his third year at Makerere University, completing his bachelor of commerce and majoring in marketing. However, he attributes his entrepreneurial drive to his business-minded parents.
“They came from poverty and are entrepreneurs, particularly my mom, who sells clothes… I remember as a kid my siblings and I went to a neighbour to watch TV and when we got back she smacked us and said we mustn’t sit back and just watch other people’s TV. If we wanted a TV, we needed to go and make our own money, buy a TV for mom and then we can all watch,” he recalled.
“As a young person, I thought she was being so harsh. But as I grew up I knew I had to make my own way in life… because I was brought up in that culture.”
In school, he hired out his writing skills to other students in his class – from writing proposals to love letters. And he spent his vacations finding employment, networking and learning as much as he could.
“One of the things I believe is I have to learn every day from work mates, the internet, and books I come across… And because of this continued desire to find out things and network, I think, in a way, it made me move towards entrepreneurship.”
Knowledge is power
His advice to other young entrepreneurs on the continent is to believe in their vision, but make sure they conduct research into their market and arm themselves with understanding and knowledge through reading, networking and attending industry-related conferences and events.
He also warns others against becoming too complacent in their markets, as it might result in a competitor swooping in and putting them out of business.
“I could wake up one morning and find there is a competitor that has come up and then I have to go back to the drawing board again. So it is very important to make sure you keep researching and finding out everything about your market,” he emphasised.
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