Rwanda’s first ride-hailing app, YegoMoto launched in 2016 with the goal of digitizing the nation’s ride-hailing industry. According to Yego CEO Karanvir Singh, at the startup’s soft launch, the platform had a mere 600 riders. By December 2017 300 more had joined.
What’s unique about the YegoMoto story was the company’s ability to find their market fit without offering incentives or joining bonuses. Where ride-hailing companies like Uber and Taxify had failed because of an inability to meet Rwanda’s Data Localization Law, Yego Moto was able to change the face of Rwanda’s ride-hailing industry.
Most early stage startups go to VCs and ask for funding in order to gain traction. While for some, it provides them with the necessary funds for growth and development it becomes the beginning of , for many it lead to the beginning of the end.
The often mentioned Wework is a prime example. The company received $2billion in investment from Softbank group in 2019. Optimistic about the future, Wework started planning an initial public offer. By October 2019, it’s valuation tanked to a mere $10billion, forcing the company to layoff employees and scale down. Part of Wework’s problem was massive overhead triggered by large cash injections. If given the opportunity to grow organically and gradually raise capital, WeWork might have fared differently.
Understanding that capital injections don’t always mean success, Yego a previous AppsAfrica Innovation Award winner relied on their stakeholders to derive value. Yego, presence in the Rwandan ride-hailing market helped deal with issues related to security and crime and reduced the amount of accidents caused by moto-taxis.
For Yego, Rwanda was a proof of concept. After the company’s launch, the Rwandan government saw what Yego had to offer and reached out to collaborate. In January 2018, the government announced that it would be mandatory for all taxis to install Yego meters by the end of the year.
At this point, Yego had to challenge it’s desire for organic growth. Though the idea was taking off, the company didn’t have the necessary capital to invest in rolling out a nationwide meter service, and investors were hesitant to jump on board. Luckily, Yego was able to sign an agreement with the African Guarantee and Economic Fund for a loan allowing them to equip 20,000 taxis with Yego meters.
CEO Karanvir Singh acknowledges that the startup’s journey was not simple. Starting out in Rwanda presented a number of challenges that made creative thinking a must. In adapting to the country’s local market, Yego was able to launch a call center for customers to make requests without WiFi and better understand how to create mapping systems catered toward the Rwandan market.
As Yego continues to grow, Yego recognizes that the ride sharing industry is changing and the platforms that enable them must change as well. According to Singh, the earnings of drivers have already fallen 70% across the world. While companies continue to squeeze drivers and discount rides to corner in on the market, drivers comparison shop between 2 or 3 different apps. This cycle leads to a “race to the bottom” in which consumers and drivers are left out to dry.
“Government regulation of the taxi and ride sharing market is all but inevitable” said Singh. “today drivers don’t have a choice, but when they do, a mass exodous is all but definite”.
Singh understands that Yego’s way of looking at the ride sharing market is ambitious, but necessary amid the changing face of Africa’s platform economy.