I’m Titus, I want to bring the convenience of app hailed taxis to Nanyuki town and its environs.
Budget Breakdown (approx)
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Boda bodas have become the most reliable and affordable mode of transport especially in the rural towns. Although there are few cars operating as taxis in the rural town, most people prefer to use boda boda due to affordable prices and easy to access to the remote areas where there are no roads. This has left cabs only left to those areas with well-maintained roads.
With these reasons, boda bodas has become a major employment to youth in the rural towns. Most of these towns I have visited there are at least 500 bodas registered with either SACCOs or welfare groups on the area.
In general people have grown to be tech savvy and progressively loving products that offers new experience that makes their lives easy. It is then I decided to build a mobile application that will provide a platform for both riders and drivers to interact where a customer can set pickup location and request a ride. This request is sent to a nearby driver and once the driver accept the request, the customer is notified that the driver is on the way to pick him. The driver follows the already provided location in the application to pick the customer.
This Tax hailing application will mostly help people residing in remote area who can request to be picked-up using their mobile phones from their homes either by a cab or boda boda. This will enable the people even to request pick up at night where it has been impossible to get transport at night.
This platform will provide the safest, reliable and affordable service since customers will be charged based on distance and time taken and before drivers get the access to the application there will thorough vetting and training on road safety.
Our first phase marketing plan will purely depend on SMS campaigns and social media platforms such as Facebook, Twitter and Instagram to increase brand awareness and drive traffic that will lead to our Apps downloads. It is the second phase where we will turn to outdoor marketing such as billboards, wall branding and bus branding.
Customers will get discounts for both using our platform and also referring customers to our platform while drivers will receive incentives such as bonuses based on their performance on using our platform. Motor bike drivers will get branded helmets and reflective vest at free or subsidized cost. The branded helmets and reflective vests will also be used to increase our brand awareness.
In month 1, drivers/Vehicles acquisition target is 200 and 50 for Boda Bodas and Cabs respectively. Apart from the acquisition target, I expect to bring on board around 100 drivers, 20 from Cabs and 80 from Boda Boda to participate on beta testing program.
We will charge a commission of 15% on fare paid by customers to the drivers. Our projections states that drivers will make an average of 10 trips per day. We will use minimum payable fare per trip to compute our revenue projections. Minimum payable fare for Boda Boda is KES 100 while that of Cabs is KES 200. We are also going to assume drivers worked only for 26 days per month.
Break Even Point
With the projected monthly operating costs KES 1,255,000 in month 1, 2 and 3 expect to break even with 250 Boda bodas and 55 Cabs as illustrated below;
Revenue for Bodas = (250 Bodas X 10 trips X 100 Min fare X 26 days) X 15% = 975,000
Revenue for Cabs = (55 Cabs X 10 trips X 200 Min fare X 26 days) X 15% = 429,000
Total Revenue – 975,000+429,000 = 1,404,000.
Revenue Projection Confidence Level is 90% that translate to 1,404,000 x 90% = 1,263,600
Based on this projection we expect to break even in our second month of operations.
Although in our break even point computation we have assumed that each new boda boda driver will be given 2 free branded helmets and 2 free branded reflective vest, we are also weigh option of buy one get one free. This will reduce our cost to KES 1,450 per boda boda. This will translate to KES 290,000 saving in month 1 only.
This amount can be used on discounts offered to new referrals. We have not yet come up with the details of discounts given on referral program.
The minimum capital to make this project operational in Month 1 KES 2,000,000. This amount will be utilised in final stages of Apps development and testing, Office setup and staffs recruitment and costs of users acquisition.