The landlocked country is just south of Malawi, Tanzania and DRC, and has the great Zambezi river as it’s border with Zimbabwe, Botswana and Namibia.
Economically there’s a lot of copper and mining exports, and my sense is that the development of local services is most in line with Uganda or Tanzania, rather than Kenya (more developed) or Rwanda (less developed).
In this episode, I speak with Greg, who runs a car hire company from the capital Lusaka.
It started 10 years ago and now has operations across the country.
I really enjoy hearing how businesses in the region adapt traditional business models to provide a superior service to existing alternatives.
Yes, there’s a lot of excitement in developing off-grid solar solutions using mobile money, but there’s also a lot of merit in running a business with professional service that an emerging economy is going to demand.
In this case, good quality and reliable car rentals.
Greg and I discuss the company’s formation, how they modify their cars for Zambian roads (such as switching out the Japanese cold weather tyres), how their fleet is now over 500 cars through an innovative leasing programme, and how the payback on vehicles they purchase, is just 4-6 months.
There’s also lots of good advice from Greg about building a company organically and strategically thinking about where you can be valuable to clients.
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Sam: 00:02 Intro.
Sam: 02:43 Cool. So we’re here today with Greg from City drive. Greg, welcome to the show.
Greg: 02:47 Thank you for having me.
Sam: 02:48 That’s all. And so to get started, can you tell us a bit about you and a bit about City drive?
Greg: 02:53 Okay. So my names are Gregory Charmer. I was born in Zambia, Luapula province, but I grew up mostly in Botswana, and I came back in 2004 to Zambia for college. Basically. I’ve been back in Zambia since 2004 and I completed my college in 2007. I did ACCA which is basically…
Sam: 03:23 Accounting.
Greg: 03:23 Accounting, Yes, correct. Yeah. And I did that for three years. When I completed, I went and worked as an accounts assistant for a company called Global Logistics. I worked there for about two and a half years from 2007 to December, 2009. I then left to go and found City drive and run it full time.
Sam: 03:51 Cool. Okay. And City drive is car hires, is that right?
Greg: 03:56 City drive is car hire, but basically what we really are, we are, we consider ourselves to be a transport solutions company. The vision really has always been to provide and develop innovative transport solutions at the best possible prices. But then we had to start from somewhere because transport solution is broad. So we had to start from somewhere and we started with car rentals.
Sam: 04:21 Got it. Okay. So out of interest, where do you see transport solutions? Where could that end up?
Greg: 04:28 So for us really, we consider our transport solutions really covering not just car rentals, but when, and anything that will enable us to help our customers out there, move people or goods from one place to the other, to another from point A to point B, in a much more efficient and cost effective manner. That should include obviously car rental itself. But also we’re looking at a taxi hailing, we’re looking at a courier service, we are looking at several other services that have to do with transportation, but obviously with the aim of making it a different and better in a way that will save our customers money and time.
Sam: 05:20 Okay. Okay. So let’s sort of talk about what the situation was like in Zambia before City drive.
Greg: 05:29 Yeah.
Sam: 05:29 So when you say you’re sort of looking, let’s as we currently looking at car hire, car rental?
Greg: 05:37 Car rental yeah.
Sam: 05:37 So what was, what was the process like before City drive?
Greg: 05:42 Yeah, so the current industry in Zambia at the time that we were coming into the scene was still not very developed. It’s still not that developed, though we’ve made some significant progress. But I think when, when you came into the scene, we had a few car rental companies, and a number of them. We had about two, which were sort of dominant, right. But then one of the main problems that we discovered when we did our market research is that the most of the current companies then we’re mostly catering to expatriates, basically customers coming from outside the country. Because one of the conditions was was that they needed someone to have a credit card in order for them to hire a vehicle.
Sam: 06:33 Interesting.
Greg: 06:33 Yeah. Now, when you look at the majority of the Zambians, majority of the Zambians don’t have credit cards. So what that meant was that a large chunk of the people in Zambia who are not receiving car rental services.
Sam: 06:48 So even if they wanted to.
Greg: 06:51 Even if they wanted to.
Sam: 06:52 The fact that they don’t have a credit card…
Greg: 06:53 They don’t have a credit card, they wouldn’t actually hire vehicles. So that was an opportunity that we saw. And when we founded the company, it was really with the vision of enabling ordinary citizens out there to access affordable and efficient car rental services. So, over the years I think we’ve stayed true to that mission. And we have actually provided services for customers, not only in Lusaka but basically across the country because we operate in four provinces in four towns. And we believe we, we have made significant progress in attaining our mission and vision of enabling ordinary citizens out there access affordable and efficient car rental services.
Sam: 07:46 Very good. Okay. I’m interested why is, I know very little about the car rental market. Why did the, the two incumbent car rental companies, why did they insist on people using credit cards?
Greg: 08:04 It’s much safer, right? Because then the credit card becomes security.
Sam: 08:10 What does that mean? Security?
Greg: 08:12 Yeah. So basically the credit card becomes the security deposit. Yeah. So you say maybe there are damages to the car or the car is a right-off they would actually charge.
Sam: 08:26 So they can get the money back?
Greg: 08:27 Can get the money back. There’s a percentage that they’d actually charge immediately on the credit card to get to, to recover their money. So that was one of the reasons which they, you know, they believe that it would actually be safer for them to actually hire out vehicles to people with the credit cards. The, I think, but I think the other reason was was that perhaps the just possibly, maybe we’re not just not interested. They, I think, they thought that it was more lucrative dealing with people coming from outside expatriates, rather than the local market. I think they didn’t really see much business sense in the local market and also concerned with the fact that local market was much, much, much riskier compared to the international market. Yeah. I think those were the, there could be other reasons, but I think those were the two main reasons that we actually discovered when we were doing our research.
Sam: 09:33 I mean, the first, so the second one, I mean, that’s just, I guess the judgment that they’ve made. With the first one though, I mean, that sounds quite sensible. If you’re giving someone a car that you’ve got a way to get a security deposit.
Greg: 09:47 Yeah.
Sam: 09:48 If you don’t take credit cards, how do you get over that issue?
Greg: 09:52 Yeah, because I think that’s, that’s, that’s a question that we had to think hard about when we’re, when we’re setting up the company because I think for us, the vision was just not to cater to expatriates, but also most importantly to the, to the local market, because, you know, I think we believe transportation is very critical in driving the economy forward. And we really wanted to participate in the growth of the Zambian economy. So, we just really had to come up with a plan. What we call a risk management system, which would actually enable us, to hire out vehicles to people without credit cards. And it essentially involved putting in place a screening process. Yeah. So for example, anyone who has a car, we need to they need to bring forward a copy of their utility bill because we need to ensure that we know where they stay. Okay. So there has to be a copy of a utility bill, which can either be an electricity bill or a water bill or a tenant’s agreement. Right. And then of course also when thEy’re filling in the contract, they need to give us at least two emergency contacts. Okay. And we need to know the names of those emergency contacts, where they stay, their contact numbers, where they work. Yeah. And also when they come through there are just a few questions that we ask them. Yeah. It’s part of the screening process. We developed a screening process to manage that risk which we use to actually assess the credibility of everyone who comes to hire a vehicle. So that is the first stage. If that first stage fails, we’ve put compressive insurance on all our vehicles. So in the event of them being stolen, then now insurance will cover the vehicle and have the vehicle replaced. Yeah. So it’s a two-stage risk management system that you have in place, which has actually enabled us to be able to hire out vehicles to people without credit cards. And from the time that we, we actually started operating, we’ve had very few incidents of you know, vehicle theft clients not wanting to pay. Yeah. Et cetera, et cetera. Yeah.
Sam: 12:44 And I mean, rough, say if, I mean, that sort of makes sense. If you’ve sort of come up with your own risk-mitigating criteria and just in terms of the rough scale, how many customers have you got or have you had?
Greg: 13:02 We operate in four provinces and I think over, over the years our customer base has been growing. So roughly in terms of numbers maybe we are looking at a 200, 300 division, 200 and 300 customers.
Sam: 13:22 Yeah.
Greg: 13:23 Yeah.
Sam: 13:23 Are many of them repeat customers?
Greg: 13:27 Perhaps a quarter of that.
Sam: 13:29 Okay. What’s the, what’s the main demographic or like what’s the main reason that people come to City drive?
Greg: 13:37 The main, our main strategy really has been to provide a unique experience. Right? We ensure that from the time you make an inquiry to the time you confirm a booking, the time you get a vehicle and the time you return the vehicle, we ensure that we actually give you an experience which is unique and you can’t get anywhere else. So we, we are into car rental and you know, transport solution. But what we sell is the experience, a unique experience. And I think over the years, that’s really what has made us to stand out.
Sam: 14:20 So, in terms of the purpose. Yeah, that people use the cars, are they doing it for a holiday, are they doing it to move, to move house. Are they doing it to do a long business trip? Like what are some of the reasons that they’ll hire a car?
Greg: 14:35 Yeah, it really depends because you know, we, we have got about four market segments, right? Basically we’ve got about two primary market segments. So those are the international clients and the local clients. With international clients, mostly they come, they come to Zambia and hire vehicles basically for two main reasons. One, they’re coming here as just, you know, business travelers, so they would want a vehicle to move from point A to B. So other than the business travelers. And then the second one is the tourists, right? So they’re coming here and they want to tour Zambia, they want to go to the Victoria falls, national parks, and other parks. So they would rather, most of them will either hire a plain four by four. Okay. Others would hire what we call a fully equipped four by four safari camper. So this basically, the camper basically comes with all the company equipment you need on there. It comes with a rooftop tent, a car fridge, comes with cooking utensils, everything that you need for you to go out there camping. So yeah, so those are the main two reasons for the international market. They’ll come either as business travelers or as tourists. On the local market, we have really clients hiring vehicles for two main reasons. The first one obviously, is for, is for them to, you know, get around. Right.
Sam: 16:16 Just like, like day to day, getting around or?
Greg: 16:19 Yeah. If they want to travel from one town to the other and they don’t want to use the bus.
Sam: 16:27 Okay. Yeah.
Greg: 16:28 They’d hire a vehicle some, if the, they’re coming from one town to the other, perhaps the, they get they use a bus. If they’re coming from Livingston, they’ve come into Lusaka, they get a bus, and then when they get here, they’d want to move around using a vehicle. So they’d actually hire a vehicle. The second reason is now the B to B business. And here we are looking at companies who don’t want to tab their funds in bank vehicles and maybe they’re doing a project. I saw they’d rather hire a car for two, three months for the duration of the project. And yeah, so they’d hire a vehicle as opposed to buying it. And then also we also provide services to insurance companies, so if you’ve got a if you’re insured with an insurance company, and your vehicle is involved in an accident your insurer would hire a vehicle from us for you to use.
Sam: 17:39 You’ll have the replacement.
Greg: 17:39 The replacement, exactly. So you would actually utilize that vehicle as you wait for your vehicle to come out from the garage. Yeah. Yeah. So basically those are the main reasons why people hire vehicles on the internet, on the local market. Yeah.
Sam: 17:54 Very cool. And the, how regular does the insurance one happen?
Greg: 18:01 Every month.
Sam: 18:02 Really?
Greg: 18:02 Yeah. Cause we have accidents every month. Yeah. Actually, I think it’s two fold. It’s sad that you know, your vehicle is involved in an accident, but again, it’s good because we still, the insurance to give you a vehicle to use.
Sam: 18:19 Yeah.
Greg: 18:19 Yeah. You know, there’s continuity on your part in terms of transportation. Yeah.
Sam: 18:27 Did you go to the insurance company and say, I think you should, like, I think this is a service you should provide, or did you, did you displace an existing car hire?
Greg: 18:40 Actually when, when we started and I think we are, we are proud to, to actually have, having you know, contributed to the growth of the insurance market, with regards to replacement vehicle because when we started, most insurance companies used to payout. Right. So if your vehicle was involved in an accident, they’ll say ok, you know what, sort yourself out, go and hire a vehicle, just brings us the bill. But then what we did is that we, we came up with the proposal. Yeah. And we visited most of the insurance companies and we presented to them that look, would be more beneficial for you if you hire a vehicle on behalf of your policy holders as opposed to letting them, you know, just giving them a blank check and telling them to go and hire a vehicle because one, you won’t have control over the costs. Right. And then you also won’t to have control over the quality of the vehicles they are hiring. So if you hire a vehicle for them from a reputable company like us, you can be assured of, one, ensuring that you have control over your costs because you only pay, you will know what you’re paying for upfront. Right. And then we have a good fleet of vehicles, cyclists, you know, you can be, you can rest assured your clients will have access to quality vehicles, which they can, you know, continue driving around as they wait for their vehicle, which in turn will also, enhance your reputation as an insurance company. So in the beginning, the majority of them liked the idea. And I think a couple of them, we, we started off a world of them, decided, you know, getting vehicles. And over the years the industry has basically moved to that. So insurance companies don’t actually pay out any money today. They would rather hire a vehicle for you because they’ve actually realized that they get to save money, and it’s more beneficial in their part. And also they are, their policy holders get to have access to a vehicle much quicker as opposed to the way it was before. Because the way it was before, they would just tell them, look, go and look for a vehicle. Right. But then if they call us and tell us, look, we’ve got this policy, please arrange for a vehicle, we say ok, fine, there’s a vehicle we can deliver to where they are. So it’s much quicker. So yeah, it’s been an interesting and good journey.
Sam: 21:22 Yeah, that’s really good. Great. Can we talk a bit about the economics of car rental? So I’m interested sort of roughly, how much did it cost to buy a car and then what’s your sort of expected payback in terms of being, and maybe some other additional costs that might have to be considered when you’re buying a car to hire as opposed to just to, to drive for yourself.
Greg: 21:50 Yeah. So, you know, buying vehicles in Zambia is quite expensive, especially if you’re going to be buying new cars, right. Because, you know, like say Toyota, Alex, the new Toyota Alex will cost you between $40,000 and $50,000, which is a lot of money. So when we started we started with basically, because, you know, we had to start from somewhere, right. And we started with basically buying second-hand cars yeah, so we would buy second-hand cars from Japan and those are the cars that we were actually hiring out. And so, buying a second hand, a good second hand vehicle from Japan would almost cost you a quarter of the price of a new vehicle in some way. So because of that, we were able to actually you know, grow our fleet over time. And we actually had the payback period for the second-hand vehicles from Japan, the payback period is between, is between four and six months.
Sam: 23:08 What?
Greg: 23:09 Yeah.
Sam: 23:10 Four and six months?
Greg: 23:11 Yeah, between four and six months. Yeah. So you’d get back all your money.
Sam: 23:14 What’s the, what utilization do you need for that? Like how often does the car need to be in use?
Greg: 23:19 Well, the utilization in a month, if you can have at least a utilization of at least 20 days.
Sam: 23:27 20 days in a month?
Greg: 23:28 20 days in the month, between 15 and 20 days in the month, you should be able to get your money back between four to six months.
Sam: 23:36 Are you calculating the total cash amount? Or are you saying, are you factoring in a depreciated value of the car if you were to sell it?
Greg: 23:47 Yeah, so basically the initial investment on the vehicle.
Sam: 23:50 Okay. So let’s say, let’s say it costs $10,000 to buy the car. Are you saying you’ll recoup $10,000 in six months?
Greg: 23:58 Yeah, six months, guaranteed.
Sam: 24:00 Really?
Greg: 24:00 Yeah.
Sam: 24:00 Okay. So it’s not, cause it’s not even, cause you might, cause even after six months, you want to say, right, I know I want to sell this car. You might be able to sell the car for $5,000. Yeah. Get some cash back or…
Greg: 24:11 After six months, yeah. Possibly you might sell it for three quarters of that. Yeah.
Sam: 24:17 Yeah. Wow. So how much does it cost for a day?
Greg: 24:21 For a day, it depends on the vehicles. So our smallest vehicle, which is basically the hunchback vehicles, that the likes of the runx those their costs are 33 Kwacha per day. 33 Kwacha, which is which is about $38.
Sam: 24:41 $38?
Greg: 24:42 $38, So cause I think that’s the other thing, one of our strengths is that we, we actually have got very competitive rates. We have got one of the lowest rates in the industry. And it’s deliberate because we believe that it’s the only way that we can enable people out there to, ordinary people to access car rental. Yeah. So they range from $38. The sedans range from $38 to $55, and then we have the four by fours which range from $90 to $130.
Sam: 25:18 Okay.
Greg: 25:18 Yeah.
Sam: 25:19 Wow. So with this, with a sedan, you were saying in six months, thats maybe a hundred days driving. So it’s about $5,000 to buy car?
Greg: 25:27 To buy a car from Japan?
Sam: 25:29 Yeah.
Greg: 25:30 Yeah, you can, you can buy, you can have it landed for about that much, basically between 5,000 and 6,000. Yeah.
Sam: 25:38 Are there any things that you need to do to the car? I mean, you said one is to prepare them for Zambian roads and the other is to prepare them for being rented out. So yeah. Are there any, so are there any things, I’m trying to think. There might be more potholes in Zambia, there might be, the roads might be hotter. Are there any sort of changes or modifications you need to make to the car?
Greg: 26:07 For the majority of the cars, no. The only thing you need to do is really just when, once, once it arrives, have it registered and maybe at that time what we found is that the tires that the vehicles come with, they are mostly meant for the cold environments in Japan. So once they get here, you need to change them. Yeah.
Sam: 26:29 What do you do the old times?
Greg: 26:31 What we do with the old tires, usually if there are people who are interested in buying them, we sell them, but we explain to them the look, this tires came from Japan. So you’re gonna have to buy them at your own risk. Yeah.
Sam: 26:43 I would say that, is there any use for cold tires? What would you call it, cold surface tires. Have you?
Greg: 26:52 Yeah, in Zambia, usually the tires just don’t work, because if you continue with them, they usually, they’ll either burst or the top part will just come out.
Sam: 27:04 Okay.
Greg: 27:04 Yeah. Just shut off. Yeah. Which is not good.
Sam: 27:08 So is there any other purpose for cold weather tires?
Greg: 27:12 Cold weather tires, here in Zambia we haven’t found any.
Sam: 27:17 Ok, have you just got a pile of these tires?
Greg: 27:21 Yeah, we do have a, I think what we usually do is that we try, by all means to get rid of them. So if we have, if we can find a buyer, we sell them.
Sam: 27:34 Okay. Yeah. But I mean most of the people who are buying them are kind of doing it slightly risky.
Greg: 27:41 Yeah. You usually, it’s usually those who live in the, the, in the rural areas they’ll use it for what we call, this, in a way, you, you have a trailer and then it’s been pulled by either a cow, donkey.
Sam: 27:56 Like a cart.
Greg: 27:57 The cart, exactly. So they’ll usually use them for that.
Sam: 28:00 They’re not going very quickly. Okay. And then are there any other things that you need to do to the car before you start?
Greg: 28:08 I think the other thing that we’ve discovered also is that usually the engines come with what they call a thermostat.
Sam: 28:15 Okay.
Greg: 28:15 Because of the cold whether there. Now, the thermostat, usually only works best in cold weather in Japan. When it comes here it tends to expand and blocks the radiator.
Sam: 28:29 Okay.
Greg: 28:29 Yeah. And if you’re not careful, it might actually lead to the car over boiling and then it might damage the engine, So one of the things we do is that we actually remove it.
Sam: 28:41 Okay.
Greg: 28:41 Yeah, we remove the thermostat.
Sam: 28:43 Alright.
Greg: 28:43 Yeah.
Sam: 28:44 Okay. And does that have any adverse effects?
Greg: 28:47 None.
Sam: 28:47 No. Okay.
Greg: 28:48 The car continues to operate.
Sam: 28:50 And so that’s kind of, you get the car from Japan and you kind of make it Zambia ready.
Greg: 28:55 Yep. And customize it.
Sam: 28:56 Do you need to then put anything like a tracking device in the car or anything? Any other things like that?
Greg: 29:02 Yeah, so yeah, we do, we do. We do actually install tracking devices in our vehicles. In fact, I think that’s one thing actually left out as part of our risk management system. So we track all our vehicles. Yeah. Because obviously, I mean, if, you know, God forbid someone who’s not credible has the vehicle and they’ve got other plans. I would actually be able to track the vehicle. And just if they’re still not continuing. If they’re not bring back the vehicle, we would actually track the vehicle and switch it off, yeah.
Sam: 29:47 Switch it off? So, so, wow. So how does it, so what, what, what data can you collect? So this is like a little device you put in the car.
Greg: 29:54 Yeah, it’s a tracking device that we install on the vehicle, which enables us to track the vehicle and…
Sam: 30:00 So you’re getting the GPS location. It gives you…
Greg: 30:04 So it will tell us the real time location of the vehicle at any time. It will also, it’s able to tell us the speed at which the car is moving to be able to tell us whether the vehicle is stationary or it’s moving as well. It’s about to also tell us,some devices are able to tell us how much was in the vehicle? Yeah.
Sam: 30:30 So have you, have you got sort of a theatre border or like a bit on you on your computer where you can sort of click a button and you see a map and you can see where your car is? Yeah, yeah. We’ve got an admin panel where we’re able to track all our cars. Yeah. And I think I’ve asked you, how many cars have you got?
Greg: 30:49 Yeah, so that’s a good question because the model we use is one which, which we use our own cars and also third party vehicles. In 2016, we launched an online platform, which enables people from the public to list their vehicles. So you list your car and then we hire it out for you. Right. so our own cars, we’ve got very few cars, which are our own.
Sam: 31:18 Really?
Greg: 31:19 Yeah. So our own cars, they’re just about 25.
Sam: 31:23 So you’ve got, on your City drive balance sheet.
Greg: 31:26 Balance sheet?,
Sam: 31:27 You know, under assets, 25 cars.
Greg: 31:29 Just about 26 cars. Okay. Yeah.
Sam: 31:31 How many is in your fleet?
Greg: 31:32 Yeah. So basically on our platform, we’ve got a close of about 500 listed vehicles.
Sam: 31:41 500?
Greg: 31:42 Yeah. 500 listed vehicles. Yeah. So those, those listed vehicles in our own cars, when we combine them that’s the fleet that we basically used to hire out.
Sam: 31:54 Wow.
Greg: 31:54 Yeah.
Sam: 31:55 That’s interesting. Okay, so 25 so, the initial ones that when you started the business, did you own all the cars?
Greg: 32:02 When I started the business, we started one vehicle.
Sam: 32:04 One vehicle.
Greg: 32:04 Yeah. And yeah, and we did own it. Yeah. That’s in 2009 yeah.
Sam: 32:09 25 and then say, well wow. So you’ve now sort of invented this marketplace for people to, so the people who are listed, who’ve listed their cars, what do they, do they kind of drive and then they get a phone call from you saying, can you, can you rent it for a week or have they got extra cars? What’s the sort of demographic?
Greg: 32:33 So the way it works is that when you have your car listed, you get to keep it, right. So the, the, the, the marketplace is not a peer to peer marketplace, whereby a vehicle owner gets to actually just get to interact with the customer and then the, they handle everything, we’re not there yet. But basically what happens is that you have your car listed and then when there’s a booking on your vehicle, we give you a call, okay, we’ll give you a call and then we make arrangements.
Sam: 33:07 Is it basically, so let’s say that you’re paying $50, let’s say that the customer is paying you $50 a day. Do you then go to the people, the five, people who’ve listed and say, we’ll give you $25 a day.
Greg: 33:19 So, so basically the rate in our commission on the vehicles are actually prearranged, right? Yeah. So we usually typically get between 20% to 35% commission or niche higher.
Sam: 33:34 Okay.
Greg: 33:35 Yeah.
Sam: 33:35 And out of that 25% to 35%, that’s all your servicing costs. So your, the team who come and do the initial checks, all that sort of stuff that gets paid out tt that.
Greg: 33:46 Yeah. That gets paid out to you, so that, well our commission is, does cover all our operational costs. Yeah,
Sam: 33:54 Yeah, yeah. Wow. Okay. That’s interesting. So 500 cars, is it 500 people or like to certain people have multiple cars, have some, some people like made a little sub business out of this.
Greg: 34:08 Its actually quite interesting because when we launched the platform, some people started one vehicle. Right. And over time they actually had to buy extra vehicles from the money that they were making on the platform. So it is not, it’s not like, you know, one-to-one, but you have a number of people who have got maybe two, three, four, five vehicles listed on the platform. Yeah.
Sam: 34:35 Nice. And all in Zambia?
Greg: 34:37 All in Zambia, currently we’re just operating in Zambia.
Sam: 34:39 Okay.
Greg: 34:39 Yeah.
Sam: 34:40 Do you have plans to go elsewhere?
Greg: 34:41 Definitely. Definitely. We’ve had plans to go abroad. So yeah, that’s what we are working on.
Sam: 34:46 Where do you want to go?
Greg: 34:47 Well, you know, we really want to focus on, for the meantime, we want to focus on Africa. So we are looking at Southern Africa the neighbouring countries. Yeah. You know Botswana, Malawi, and then the other countries.
Greg: 35:05 And how are you gonna, what framework are you going to use to decide which country to go to next?
Greg: 35:11 Yeah. You know, obviously we need to start with a country which has got an investor friendly environment. Yeah. And…
Sam: 35:28 Because you’d be coming in as foreign investors?
Greg: 35:30 Yeah. We would become foreign investors. And obviously a place where, you know, it’s the, the people, the people there are more accommodative to technology. Yeah. Because our platform is a technological platform and we’d want to ensure that wherever we go, it has to be a place where you know, people are accommodative to technological things. Yeah. Because in many parts of Africa you know, people, this is when people are just getting to learn about these things. Yeah. So, yeah, I would want to go to a place where, you know, it would be easier for us to, you know, get established and have our platform be welcomed into, you know, people will find it easier to use, technologically.
Sam: 36:32 Yeah. And when he’s talking about technology, is this because City drive is a website where they, people go on and select their cars?
Greg: 36:39 Yeah, well actually we actually working on a mobile app because currently the platform is a web app. So you go, you go on the site, on the web and then you can list yoUR vehIcle there. But what we are currently doing that we’re working on a mobile app and yeah, once it’s ready then, you know, it’d be easier for us to scale the service, it’s, easier to scale, the service using a mobile app as compared to using web app so once the mobile app is up and running, then we’ll be able to then look at how we you know, have it exported outside the country.
Sam: 37:27 Hmm.
Greg: 37:27 Yeah.
Sam: 37:29 So most people, most customers, how do they, do they hear about you through a friend? Do they, are they Googling Zambia? Car hire? Like how do they find out about you?
Greg: 37:39 Well, so we, we have we market our products in many different ways. One of them is obviously using Google ads. Yeah, we use Google ads a lot, drives traffic to our site. And then also we have got listings on a number of sites as well. We’ve listed our services. And then also on the, on the local scene you know, we do do a lot of we put billboards we put billboards around and then we just have got a sales team which goes around just doing direct marketing. Yeah.
Sam: 38:26 Cool. How big is your team?
Greg: 38:30 So our team is basically spread across the four provinces. So we are talking about a 10 man team.
Sam: 38:43 10 man team. Okay.
Greg: 38:45 10 people.
Sam: 38:46 10 people.
Greg: 38:46 Yeah.
Sam: 38:47 You say 10 men, are they all men?
Greg: 38:48 No, sorry. Both. Both men and women.
Sam: 38:53 Okay. And we’ll go, we’ll just do a few more questions if that’s all right. So City drive has been going for nearly 10 years.
Greg: 39:02 Nearly 10 years, yeah. This our 10th year.
Sam: 39:04 Yeah. Since you started, what have been, if you sort of think about yourself 10 years ago, if I was to sort of ask you, when you started the company, what will City drive look like in 10 years? How do you think today is different from what you initially set out? Both positively and negatively.
Greg: 39:22 You know, in initially the vision was really to be an international company by the seventh year. Yeah. We’re supposed to have at least opened up branches outside the country. But I think one of the main hurdles we faced is that I think we realized as we went on that some of the assumptions we made were wrong. Yeah. Some of the assumptions we made were wrong and…
Sam: 39:48 Such as?
Greg: 39:50 Well, you know, we discovered that it is going to take a bit longer for us to actually you know, open offices outside the country. Mostly because of two main reasons: One, we found it extremely difficult to access capital to grow at the pace at which we had, we actually wanted. And then the other thing also is that we found it also difficult to, you know, to find skilled personnel who’d from whom we’d actually build a team that will enable us to scale the company quickly. So, because of those two main challenges we faced, we’ve taken rather longer than we thought to, you know, grow, grow quickly and open offices outside the country basically. Yeah. That’s what we faced. So we are currently operating in four provinces. Our hope is that in the next, in the next two years, we should open an office office office outside the country.
Sam: 41:09 Okay.
Greg: 41:09 Yeah.
Sam: 41:11 Well how have you, how have you financed the business? So I guess you’re having to, well, at least with 25 vehicles you’ve had to buy them upfront, how have you financed that?
Greg: 41:22 The acquisition of the vehicles has been done in two main ways. The first one obviously has been, we’ve been reinvesting our profits into the company, so I think the majority of the profits we make we’ve just been reinvesting in the company, in buying more vehicles. And then secondly, we financed the acquisition of vehicles through loan capital. Yes. So we’ve been fortunate enough to have to maintain a good credit rating. And we’ve been able to get loans from the banks and from private individuals.
Sam: 42:05 Okay.
Greg: 42:05 Yeah.
Sam: 42:06 Is this, are you, is this a kwacha financing or dollar finance?
Greg: 42:10 I think when we started in the early days, we were able to get kwacha.
Sam: 42:13 Yeah.
Greg: 42:14 But, over time we also managed to organize and negotiate for dollar loans. Yeah.
Sam: 42:23 Do some of your customers pay you in dollars?
Greg: 42:26 Yes. So we have, I think in terms of ratio dollar to Kwacha revenue, we have, it’s about 40 to 60.
Sam: 42:37 $40. 60.
Greg: 42:38 Yeah. 40% dollar revenue, 60% Kwacha revenue. Yeah. So because of that we’re able to actually get dollar loans, because then we just match the two right, the revenue against the expense.
Sam: 42:54 Yeah.
Greg: 42:54 Yeah.
Sam: 42:55 Very cool. Nice, great, people who are listening at home, how can they learn more about City drive and also, yeah. What’s your presence online like? How do people find out more about the company?
Greg: 43:06 If you just Google ‘City drive rent a car’ or ‘City drive,’ we’ll definitely pop up. So you can find us on Google business. You can find us on some other listings that we have. You can go to our website, www.citydriverentacar.com. You can also find us on Facebook. ‘@city Drive rent a car’ and then you can also find us on Instagram and Twitter.
Sam: 43:32 Oh, you’re on Instagram?
Greg: 43:33 Yeah. We’re on instagram.
Sam: 43:34 What’s your, what’s your, like what has been a popular recent post?
Greg: 43:38 A popular recent posts has been we recently hired out a camper to some tourists who came all the way from Netherlands and yeah, they had no problem in us getting photos of them with the camper. So we managed to share that on our instagram.
Sam: 44:02 Whereabouts was the photo taken?
Greg: 44:05 The photo was taken at our office.
Sam: 44:07 Really?
Greg: 44:07 Yeah, when they were collect the vehicle at our office.
Sam: 44:09 Nice. Yeah. And then they took it all around…
Greg: 44:11 They took it around and actually they still have it. It’s they’ve had it for three weeks. Yeah, they’re touring Zambia.
Sam: 44:20 Oh, nice.
Greg: 44:20 Yeah.
Sam: 44:21 Very cool. Nice one. And that is City drive on Instagram. Just like City drive.
Greg: 44:25 Yeah, City drive Instagram, yeah, so @city_ drive.
Sam: 44:31 Awesome. Very cool. Nice. Well Greg.
Greg: 44:34 Yeah.
Sam: 44:34 Thanks so much.
Greg: 44:35 Thanks a lot.
Sam: 44:36 Cheers.
Greg: 44:37 Thanks a lot for the time.