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A bike and a battery and a very big dream

Exclusive recorded conversation between Kagiso Khaole, GM, Uber Sub-Saharan Africa and Mahomed I E Jeewa (also known as MI to his friends), Founder and CEO, vALTERNATIVE Energy. Less than a year after meeting at the inaugural Africa’s Green Economy Summit in February 2023, the two companies launched a last-mile delivery service called Uber Package.

Let’s start with a quick background about yourselves and your current roles.

Mahomed: I started in the family business at the age of 16, then worked my way up into the management roles and then later on the executive committee of the business. I ended up as financial director for about 15 years in a multinational import and wholesale company and then became the CEO of the World Focus Group, which we formed in 2017. And then last year, I decided to step down from the CEO position and take the role of chairman. And now I’m CEO of vALTERNATIVE, where we plan to revolutionise the last-mile with you and Uber, brother. (laughs)

Kagiso: Yeah, it sounds like you got an MBA from home, right? (laughs)

Mahomed: Yeah, something like that.

Kagiso: Now, from my side, I am the general manager for Uber in sub-Saharan Africa. We’ve got some fantastic businesses in West Africa and East Africa as well as South Africa. So, I’m in charge of reimagining how people move in those markets. Previously, I worked in consumer electronics, financial services, consulting and the like. So my background is a bit of a mixed bag. And I had to do an MBA. (laughs)

Mahomed: Yeah, I learned the hard, okay, I’d say the easier way, right? (laughs)

Kagiso: Yeah, I think your route is more robust. Work your way from the delivery, to packing, to running the actual business.

Mahomed:
Which is experience, right? Experience is almost everything. But you’ve got a serious background there. Well done.

How and where did Uber and vALTERNATIVE first meet and how did this joint project start?

Kagiso: It was at Africa’s Green Economy Summit. I was told about a company that I have to meet. I think during one of the breaks, we bumped into each other. I got a quick download of the ambitions. I think at the time, all you had was a bike and a battery and a very big dream.

Mahomed: Yeah.

Kagiso: And, I think, I think one of the things that quickly got me excited and really keen to continue evaluating your business and seeing what potential could come out of collaboration was, I think the diversity of the experience of your team. I think at the time I met Andy and met Daniel. You had already started connecting with government as well. You were really looking to be a full ecosystem player. And I think that was something that stood out at the time. And I think that’s what got the ideas flowing. I was also really encouraged about the discipline and structure in the back end. It was really building for the long term as well. And yeah, I can’t forget the handshake that we had to, at least, have another conversation, right?

Mahomed: Yeah, so on that point there, I think it was Victor who introduced us to each other, right? And when we met each other, if you look at the team, and I’m glad that you understood it back then, yes, vALTERNATIVE is a startup, but if you look at the seasoned entrepreneurs that are involved in the business—whether it’s technology, finance or operations—it led itself to where we are today. And yes, that million dollar handshake, when you told us there’s no deal (laughs). And now, well, we have the hard work that both teams put into this project. We have got something that we can really be proud of.

Kagiso: Yeah, and I think also the discussion around the product portfolio and really building it bottom up with the consumer in mind. I think that was also a big piece of it. It wasn’t trying to fit a product and mashing it up into a service and giving it to customers. I think we really took our time to look at where the opportunities were. We ended up landing on electrified Uber Package. And I think that was a very good decision. And I think the steps that you took where it was very customer-centric, where even the bikes were designed for the South African market. I think that puts us in a great position to scale like we’re busy doing into the long term as well.

Tell us more about how Uber Package works.
Kagiso:
Uber Package is an on-demand delivery service. Instead of waiting a day for somebody to come in and collect your package at an inconvenient time, you’re able to request someone to come and pick up your package, whether it be a jacket you left at a restaurant; you might be selling arts and crafts; you might be a repair person, and you’re trying to get the device back to a customer.

Uber Package allows you to request and get a vehicle to come to you, and the driver will be able to take that package in a few minutes and send it to its destination. You can even request, let’s say you ordered a cake from somebody, and you need it to be brought back to you. You can request Uber Package to go and grab the cake and bring it back.

And what’s been interesting is just how quickly we’ve been scaling out this new product and it’s been super successful. And now we’ve added store pickups. I think, MI, you’re really excited about that one. So if you order online and you want to return some goods, you’re able to even use Uber Package for that. You can upload, let’s say, the QR code that that e-commerce merchant utilises to be able to do the return or even a pickup. They can do that for you and bring it to you. So, this product as an on demand product is really exciting, and to do it with electric bikes now is really phenomenal.

Mahomed: Just to make everyone understand around the electric bike: everyone is trying to get into the last-mile on electric bikes. And as we discussed with Uber and Kagiso, it’s range anxiety and issues around the charging infrastructure which really cause problemd for anyone to scale up when it comes to electric vehicles. So, we adopted some technology that uses battery swapping technology. We’ve got location partners like Shell, where our swap stations are going to be positioned. And the riders, whenever the battery reaches about 20–25%, they get to the stations, scan a QR code from the app, swap the battery out, and they can theoretically be on the road 24-7 without ever charging their batteries. So it’s actually a very clever system backed by smart software.

Kagiso: Yeah. And then, I’m looking forward to ensuring that it’s enterprise-ready as well. So people, bring your businesses on board. You can utilise the Uber for Business platform to be able to do those deliveries. And again, the Uber for Business platform is built to help you with reporting about your carbon savings as well. So that’s another added benefit of electrifying Uber Package in South Africa.

There are always challenges, what have been the main ones in this project?

Mahomed: So from our side, getting into the vehicle market, obviously, the regulations and certifications were a bit of a challenge. But luckily for us, we had our technology partners and our factories and our suppliers. Everyone was ready to help to make sure that it’s seamless. We had a few delays in the country, but nothing that we couldn’t get through. So when it comes to even Euro-type certification, homologation, that was a bit of a delay, but we managed to get it through.

The other major challenge that we had was empowering the youth. Both Uber and vALTERNATIVE we’d like to empower the South African youth. And we all know that the last-mile is dominated by foreign nationals, which we actually employ both now, but trying to empower the youth has been a serious challenge. So what we’ve done is create some training programmes. And because of my history in the fashion industry, we are actually kitting out the youngsters in nice uniforms, fancy helmets and the electric bike looks nice. So we try to make it sexy for the youth of South Africa.

Kagiso: I just can’t believe you didn’t mention the Durban port, trying to get all the charges in on time.

Mahomed: That port was a 45-day delay, it pushed us out by 45 days. (laughs)

Kagiso: (laughs) Yeah, I’m really glad that we managed to get it over the line. So these launches are always very tense. The number of moving parts, there’s a lot of things that are known and unknown. I think together, in the spirit of partnership, we’ve been taking on these problems together.

And what I like about what you said is also the focus on ensuring that we bring people along. I think the broader mission of South Africa and the Presidency has always been about that just energy transition. And to make sure that it’s just, it’s about ensuring that the people of South Africa and the people inhabiting it can also participate. And I think the efforts that you and your team have also made around going out and proactively seeking out riders. We know South Africa doesn’t have a bike culture, and you have to change people’s perceptions about riding motorbikes. I think we started really well and I’m really keen to see it scale up and try to get more youth to have these earning opportunities and make money for themselves. It’s going to be really important that we get that right.

Source:Uber: More than just moving people but also driving impact | VUKA Group (wearevuka.com)

What has been the most surprising in this whole process for each of you?
Kagiso: Again, I think what was really surprising for me I think during this whole process, is just how ready the riders are to adopt electric bikes. I think we underestimate how much desire there is to adopt this new technology. I mean, you were on the ground a few weeks ago as well…

Mahomed: Exactly. The major difference, even for the young South Africans, is I think when they look at a petrol bike and it’s got its gears and clutches and noise, it’s a bit intimidating. Once they jump on the electric bike: it’s automatic, there’s no sound, it’s smooth, there are no vibrations. The uptake, even for the riders that have been riding for many years, they actually cannot believe what an experience it is. And there’s a massive cost saving also around fuel versus electricity. So, the riders that we’ve already put on the road are extremely happy with us.

Kagiso: I think that’s a massive call out in terms of that. I think, again, it encourages other projects and other companies to really be bold and take a few chances in terms of moving their businesses to the green economy. People are ready for it. You just need to go out and build it.

Mahomed: Yeah. In fact, we’ve got quite a few already. I think you are going to be our  biggest client, but we have already identified a few more of the corporates, like Famous Brands and Debonairs, we’re doing a pilot with them now. I think with all, there’s a need for a cost saving and to do right by the climate, carbon credits, and adding that extra buck into the rider’s pocket, right? If the community and the economy turns better, it’s better for all of us.

What is your vision for emobility; where in your view are the opportunities for investors?
Kagiso:
In terms of what the future holds and the bigger vision, as a business, we’ve got the 2040 goal. And we put it there, we knew it was big, ambitious and hairy. It’s something that also gets us excited. Looking at the pace of how we met in February last year, that was the time when I was also being told that South Africa isn’t ready for this. And I always say it’s like running the four minute mile. As soon as the first person starts running, everybody else is going to be able to run a sub four minute mile. I think it’s the same for this green transition. At the end of it all, as a business, for Uber, we see that we’ve got one world and we need to do whatever it takes to look after it for future generations. As a key player within the space, we have to do everything we can to make that transition. And I do see that one, South Africa is ready for this: I love what the Presidency has done. I love what entrepreneurs like yourselves and vALTERNATIVE are doing. I love that ecosystem that has been built, this community of businesses and thought leaders.

When I look 5–10 years into the future, I actually see it as being a normal thing. We will look at ICE vehicles as being the unusual thing on the road, something that might be a pastime, etc. So I think emobility will grow in a big way. We’re just at the beginning. We’re really just scratching the surface. My big dream is to make sure we can attract more manufacturing in the sector into South Africa. We’ve shown we can do it. We’ve been making cars in this country for a very long time. And this new sector unlocks a new opportunity. And just looking at the impact it’ll have on our economy, I think, as a South African, I’m really excited to see just the mass adoption of this across the board.

Mahomed: We share that vision because after we got into the emobility space, we definitely see the opportunity for scale on another level. For example, China in the last few years, I think they came out with a hundred new car manufacturers, right? So the opportunity for the manufacturing sector in South Africa is tremendous. We plan to put up a plant by early next year and hopefully export to the neighbouring countries. It’s easier to enter the market. Obviously, there’s some battery technology and technology that needs to be learned and adopted. But you don’t have an engine that has a few thousand parts in it, right? So the transition is much, much smoother. I foresee the last-mile emobility sector growing at a rapid scale.

But to our surprise, at the few events that we’ve been to, the interest from the consumer market in South Africa, which we never thought there was a bike culture, right? In fact, we’ve got two consumer bikes launching by the end of this year, because that’s the demand in the market. The youth of today, they want to save on costs and save the planet, something light on their feet, and a two-wheeler electric bike ticks a lot of boxes. So we’re hoping to see that.

Kagiso: Yes, we need to get them investors. We do need to ensure that we advertise these projects and these initiatives and these startups. I think there’s great return on investment on the continent. So yes, I’m actually looking forward to that.

Entrepreneurship is so important for the future of the continent’s economic growth. Do you have any advice for other green entrepreneurs?
Mahomed: For vALTERNATIVE, we’ve already been speaking to a few investors around the country. If anyone’s interested, the can just drop us a message on our LinkedIn page.

Kagiso: (laughs) So I think that’s a good piece of advice for green entrepreneurs, always be selling, right?

Mahomed: Yip. (laughs)

Kagiso: So what advice would you have? I mean, you’ve walked this journey from idea to that first trip.

Mahomed: Yeah. I would say basically three things: One is focus. You’ve got to focus on the exact problem and solution that you’re solving and going down the line of creating a company like for us at vALTERNATIVE. You get sidetracked along the line at so many different opportunities. The trick is to stay focused on the first idea that you had and see that through. It’s like for us, we started with the last-mile delivery bike. There are multiple products coming after that, but until we got that product right, and we got our customer, and we got a direct route to market, stay focused.

A second piece of advice I would say is get the right team. We are lucky at vALTERNATIVE: I managed to build this business with five partners, five founders. Four of them I know from the age of 6 years old. So it’s quite an exciting story. And it’s that kind of trust and loyalty that you need to grow a business.

Third, I had a chat with a lady from NASPAS Labs, Thembi, and she wants me to do a talk for some young entrepreneurs in Cape Town. So, the world thinks, you have a bright idea, you put together a nice business plan, you put together a pitch, and you’re going to raise money. It doesn’t work like that. You’ve got to have skin in the game. You’ve got to work at it, day in, day out. Myself and the team, I think we put in 16-hour days for the last 12 months. It’s been long, it’s been hard, but if you put in the time, you’ll see the results.

Kagiso: Yeah, definitely. I think, briefly from my side, there are opportunities everywhere, but they show their heads at very specific times. And I think this is a time where the whole landscape is shifting. Brands that you knew that were synonymous with cars are lagging behind. There are names we’ve never heard of that are popping up. And there’s an opportunity now, especially within the broader green economy. Things are new. We don’t know who the winners are going to be. If you have something that you think will be able to add value, pursue it, run after it in a big way. Solve problems in South Africa, and I promise you, you are solving problems for a lot of the world. So I think that would be my advice to those entrepreneurs.

Mahomed, you mentioned you are starting to produce ebikes next. Any other joint projects with other partners that we can look forward to?
Mahomed:
We’ve got a few other corporate clients that we are in discussions with. When it comes to the manufacturing plant, we’re actually deciding now whether it’s going to be one of the three major cities. We are speaking to the provincial governments, the SEZs. We’re definitely talking to the IDC in South Africa, DTIC and InvestSA. So, we are trying to create an ecosystem where we can join forces with multiple partners to see this project through.

Uber Package started because you were both at the inaugural Africa’s Green Economy Summit in February 2023 in Cape Town. How important is such an event on the continent in your view?
Kagiso:
Africa’s Green Economy Summit was really powerful in a number of ways. And one way that stands out is that it really brings like-minded people together. I was reading a book about why cities are important in terms of human development; it’s because they reduce the distance between people: ideas are shared, conversations are heard in coffee shops, etc. And events like this are akin to what cities are, and that’s why cities drive innovation, and events like this also drive innovation. What is a 5–10 minute quick intro or chat during a break can turn out to be a transformational initiative, and I believe this Uber Package initiative that we electrified has actually kickstarted a lot of projects and the confidence that I think entrepreneurs, investors, government now have about transforming the emobility sector. It has been amplified and it really started at AGES and I think summits like these are really important and for the right stakeholders to make sure that they’re part of it.

Mahomed: I agree. For us, it was our first time we went to an event like this. And we were just, I’ll say, in our infancy as a company, and we managed to meet you. We were lucky to meet you. We got to meet a lot of potential investors. There were also quite a few interesting speakers at the event that shed a lot of light on the green economy. So it’s really good, really important.

Anything you would like to add?
Kagiso: From my side, I really I think there’s just so much that we’re working on. But I think what I want to leave with anyone that’s watching and listening to this is that we do need to stay the course. I think there are going to be obstacles in the way, but the reality of it is that we need to go and solve those challenges, whether it’s energy, whether it’s infrastructure, whether it’s investment, whether it’s route to market. All these things are challenges that we have to overcome. Even a business like Uber, even with this launch, we’re still solving things and solving things together. It’s that mindset of rolling up your sleeves and tackling the issue. That’s what’s going to take this country forward. And I think we have a beautiful country. We have the right skills, the right environment to be able to excel and be a leader globally within the broader green economy, and specifically, within the mobility sector.

Mahomed: I agree. And I would like to add, I’d like to thank AGES for this interview and for allowing us to meet Kagiso and his team. I’d like to thank Kagiso and Uber for the opportunity and the opportunity for us to build something great across Africa. It is really encouraging to see what can be done when great minds think alike. And we’re solving some serious problems. And also like to add that out of this partnership, there are a lot of new products that are going to be coming shortly in the next few months. So, yeah, stay tuned.

About the author

VUKA Group
Staff Writer
VUKA Group is a business with a purpose. We are deeply engrained in the fabric of Africa and the emerging industries therein. As the parent company of leading conferences and media publications in various industries across Africa, VUKA Group serves as the central hub for all key sectors. With 20 years of experience operating in the African market, VUKA Group has become an ...
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