Have you ever hired a car to attend a family or business function? Most probably, you were anxious, and feared being scammed, or getting a car without the specifications advertised.
And if you are a car owner, there is the possibility that your client could take off with your car, damage it, or refuse to pay the balance owed.
“Being a two-sided market, we thought of creating a platform and offering a solution to connect the two sides, act as a trust arbitrator and control both sides through vetting,” says Denis Kibebe, co-founder of RIDE, a peer-to-peer car rental platform.
Kibebe says that there are a number of car owners or car rental companies that may want to earn some extra money by renting out their vehicles but are hesitant to take uncalculated risks, so the platform gives them a de-risked opportunity to do exactly that.
He explains that due to the value RIDE creates by allowing that transaction to happen, the company only takes a fraction of the revenue, remitting the bulk of it to the car owners.
“On average, we take between 15percent to 18percent depending on the transaction,” explains Kibebe.
The former banker says that one of the key aspects of this business is vetting of clients and being able to decipher the motivation behind them renting a car, adding that for RIDE, a customer has to be at least 24 years and with a minimum of two years’ driving experience.
“We had fears of how to handle accidents, issues of fuel and conflicts between the two parties, but a lot of these have since fallen off. The real issues became vetting of customers, to ensure that the car was in safe hands,” explains the businessman.
Having worked in the banking sector for over 10 years, taking a plunge into the world of entrepreneurship was motivated by the zeal to try something new, especially finding real solutions to problems that exist, creating value and eventually building a big business empire.
“We started in 2020 at the height of the Covid-19 pandemic with eight cars, currently we have 360 cars on the RIDE platform and are still growing. However, we are trying to limit the number of cars we onboard to guarantee robust business,” he explains.
He emphasises that being a startup, they are still moving towards profitability since they are still focused on growing the business.
“We are trying to remain a float, setting things right so that we don’t get distracted from the path of our bigger vision by trying to capture low hanging fruits, and even though low hanging fruits may give you profits, those are not sustainable profits,” he clarifies.
RIDE funds its growth purely from the commissions earned with zero borrowing from banks or other financial institutions and even though they have had some international investors knocking on their door, the biggest question for them is whether their problem is actually funding.
Denis Kibebe worked in the banking sector for more than 10 years before founding his business.
Photo credit: Pool
“We first need to build our market to be big enough to accommodate more car owners. A lot of startups are shutting down after raising billions of shillings in funding because they are being pushed to grow where they can’t grow and deliver results where they can’t,” he says.
Developing and improving the technology is one of their biggest cost centers, with marketing coming in second, fortunately, the platform operates a light asset model type of business.
“We are currently building an app to support our web platform, which will allow end-to-end transaction,” he says, adding that the plan is to layer the app on other lifestyle apps such as Mpesa, meaning that one does not have to download it as a stand-alone app.
Initially, one of the challenges they had to contend with was car owners listing their vehicles on the platform, but upon request by a customer, they would claim to want to use the car or even ask the company to pick or deliver the car from their homes.
They tackled this by roping in car rental firms, which manage their clients’ cars, since they have the capacity to deliver, pick up, do maintenance and generally manage the fleet.
Another challenge they have had to grapple with is clients contacting car owners off the platform after doing business on the platform.
Kibebe says that aspiring entrepreneurs and those already in business should always ask themselves one important question - whether the problem they are fixing exists, or whether they want to create a problem and offer a solution, and if the problem does exist, how big the problem is.
“Do you want to focus on the existing market or do you want to build your own market? We are building a totally new market, solving an existing problem, amplifying that problem and giving a solution to it,” he says of his venture.
Kibebe clarifies that they are not just entirely focusing on people who can afford to rent a car, but the bigger portion of people who wish they could rent a car but are not able to. Similarly, there are car owners who wish to do car rental business but cannot, so they create a platform to enable them to achieve that.
“You may not be aware that your neighbour wants to rent their car and earn some extra money due to the structure of the society we are in – a low trust society, so we connect the two through technology and create peace of mind for both parties,” he concludes.
