Back in Q4 2013, Hazim and 2 friends had just started their careers in the corporate world.
They’d always wanted to start a business though, yet had no idea what to sell.
Not to mention, they had little capital and no exposure to the business world.
But one day, at a mamak in Wangsa Maju, the three made the decision to just jump into a car rental business for university students.
“Why? Because the business enabled us to start with almost zero capital, by just using our loan facility to buy a car, and put it at a university, a market that we were quite familiar with,” Hazim shared.
They had no clear expectations on how the business could turn out.
However, a year later in 2015, the amount of handsome profit they’d gotten from that one car caught them by surprise.
So they got serious about it, and ventured into the open market with The Carpedia.
It Begins With Understanding Your Customers
“In car rental businesses, getting a long-term leasing (3 months and above) is a blessing,” Hazim shared.
“We found it quite challenging to get a long-term leasing with corporate, government and tourism clients, but it was almost effortless for us to get long-term leasing from e-hailing drivers.”
In fact, they’ve got drivers who’ve stayed with them for 4 years even.
On average, a driver would stick with them for about 6 months.
Hazim credits their achievements thus far to getting that personal touch with their customers, and collecting data to understand them better.
From there, The Carpedia got more creative with their offerings to suit their needs, and they evolved from being a traditional car rental business to becoming a car-sharing platform for gig workers.
Now, if you’re confused about how The Carpedia differs from other e-hailing or car-sharing platforms out there, let me try to break it down.
Firstly, the cars. The Carpedia’s fleet is made up of idle cars owned by those who have little use for them, and find them to be a financial burden.
They also have cars from hosts who don’t own extra cars, but instead purchase new cars to place on The Carpedia to generate passive income each month.
These cars are then rented out to gig workers who could use a car to perform e-hailing, goods deliveries, and other transportation-related gig jobs.
Branching out that way wasn’t really in The Carpedia’s plans, though they’d already been doing similar small-scale projects for merchants since 2018.
Pivoting Just In Time
But then COVID-19 and the MCO happened; this meant e-hailing activities were impacted.
“Drivers’ incomes reached rock bottom. Most of them gave up, and the number of idle cars in our garage increased tremendously.”
“That was when we realised that we depended too much on e-hailing activities. There was a high urgency for us to pivot quickly,” Hazim recalled.
The Carpedia’s core revenue has always come from their car rental fees, and so they felt it was a good move to help their drivers earn income by doing other car-related gig jobs.
These included parcel deliveries, personal grocery shoppers, and also car-wrapping advertisements.
“We started to initiate collaboration with those related merchants and we were doing it as a charity for the drivers. We didn’t take a single cent from the job commissions,” Hazim said.
“The idea was, if we help drivers to earn enough income for themselves, in turn they would have enough money to pay for the car rental fees. The plan eventually worked out pretty well!”
Working Smart After Tough Lessons
When Hazim and his co-founder saw their good progress of growth in 2016, they grew too ambitious.
They wanted to expand aggressively in 2017.
“We wanted to grow the fleet too fast without realising that we had a fragile foundation to our business operation.”
“Looking back at it, we were not ready yet to grow the number looking at the readiness of process flow, manpower, resources and also cashflow management. But we did it anyway.”
And everything turned upside down.
Their on-ground operations went haywire, they were bleeding money, and due to poor governance, one of their cars even got stolen.
It was an expensive lesson. The Carpedia took the entire year of 2018 to recover from the impact by doing major business restructuring exercises.
Doing More Than Just Business
The competition from other gig platforms doesn’t scare The Carpedia. It motivates them to innovate.
Most of all, the team wants to prove that their drivers are also highly skilled and educated individuals.
The Carpedia introduced a Learning & Development (L&D) product for their drivers and jobseekers.
Through that, they’re able to upskill and increase their employability as per the current demands in the job market.
“In addition, we are also working to ensure a comprehensive support package for drivers, which includes insurance, savings, and investments, which definitely adds values to our offerings,” Hazim said.
Over the next 5 years, their ultimate target is to grow their revenue by up to 40x by becoming the preferred asset light-logistics service provider.
They’d also like to have a fleet size of 2,100 vehicles.
In the meantime, to support the growth, we are building a sustainable ecosystem to the business by putting in place digitalisation initiatives and strategic partnerships with gig economy industry players.”Hazim, CEO and co-founder of The Carpedia
- You can learn more about The Carpedia here.
- You can read about other gig economy related articles here.
Featured Image Credit: Hazim, CEO and co-founder of The Carpedia