As youths in South Africa, we step into the dynamic world of entrepreneurship in the country where a burgeoning trend since 2020 has sparked the rise of a new generation of logistic entrepreneurs. These trailblazing entrepreneurs are reshaping the landscape, catering to major grocery giants like Pick N Pay, Checkers, Woolworths, and Spar, among others and providing a service for foreign nationals and young South Africans without a job. Fueled by unprecedented demand, this business avenue has become a magnet for ambitious young minds eager to carve their own path in the market. Join the wave of opportunity and discover how these visionary individuals are seizing their chance to thrive in the bustling realm of logistics.
The business that we are speaking about in particular is the e-hailing business specifically in the goods delivery space by using motorbikes as a mode of transport. While there are many articles that speak about the business as a driver or rider, we have decided to look at the business from the leaser of the motorbike. Apart from looking at the business as a through various lenses, we aim to answer one major question – is this business a profitable one? Lets get to it!
MODELS
Business Model 1: Buy to Lease
Once you’ve taken the bold step of investing in a delivery bike, the next thrilling chapter awaits: finding the perfect partner to rent your bike. It is advised that you make friends with with experienced riders at your local fast-food joints or supermarkets—they’re often the key to finding your ideal match. Remember, while locating a driver may be straightforward, discovering the right one is where the true adventure begins.
Places to purchase a bike:
Alright, so you’ve found someone who might want to rent your bike. Now comes the tricky part: figuring out how much to charge. Since there are a lot of people renting out their bikes, it can be tough to get the price you want in certain areas. Some folks manage to rent out their bikes for between R600 and R800 per week, while others might only get R450 to R550. It’s important to think about where you’ll find your drivers and how much demand there is for your bike. Just remember, you’re not the only one renting out delivery bikes, so you’ve got to offer a competitive without compromising your bottom-line.
Once you have found a driver and have managed to get to charge a favorable price, you may then simply draw up a contract that states the terms of engagement and emphasis when you expect payments to be made to you.
Expenses to consider:
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- Insurance for your bike
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- Vehicle tracker subscription.
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- Insurance for the driver.
You are in this category if you have decided to purchase the bike with the aim of keeping it indefinitely. Here you have the option of changing drivers if you feel the need. You call the shots as the assets is yours.
Model 2: Rent to Sell
If you are more experienced or have the financial means, you have the ability to purchase in bulk for the sold purpose of making it easier for other people to own it over a certain period. Through this business model, you are essentially selling your bike on credit with a mark-up. With each payment you are reducing your ownership of the bike.
Benefits:
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- Ability to purchase a brand new bike closer to the end of the lease to purchase contract.
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- Little to no responsibility after contract has been signed.
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- Bulk purchase allows for quicker scaling opportunities.
Companies that do this:
In conclusion, starting this business is pretty straightforward, which means there’s a ton of competition out there. Lots of folks are hustling to rent out their bikes to as many people as they can. While there’s money to be made, the profit margins aren’t huge. It’s perfect for a side gig, but we suggest having a main business to fall back on when times get tough. So, dive in, give it a shot, but make sure you’ve got a solid foundation to lean on along the way.
#Youthdevelopment #ScootersBusiness #DeliveryBikes #SouthAfrica #SouthAfricanEntrepreneurs #SouthAfricans
