Entrepreneurship Zone: 29 April 2021: How this company digitised bus transport in Uganda

Thu Apr 29 09:15:17 CAT 2021

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Entrepreneurship Zone: 29 April 2021: How this company digitised bus transport in Uganda

 <https://www.nicozdiamond.co.zw/> 

We speak to Ronald Hakiza, the co-founder of UgaBus, a Ugandan company providing technology solutions for the bus transport industry. One of its products is a digital platform that enables users to book bus tickets.

1. How did you come up with the idea to start UgaBus?

I used to travel to my village by bus and each time I would have to physically book a ticket at the bus park. On one particular trip, I’d forgotten to book my trip beforehand. Buses travel through the night and leave at 6pm. I got to the bus park 10 minutes before departure but tickets were sold out. A guy approached me. He claimed to have cancelled his plans and offered his ticket for an extra 10,000 shillings.

I was desperate so I paid him an extra 10,000 Ugandan shillings. Once we were on the way, the inspector came around to check our tickets and told me I had a fake ticket. I had to pay extra or get off the bus.

When I returned, I tried to find this guy who had conned me out of my money. Some of the people I asked told me that I would not find him and even if I did, he would deny it as I had no evidence.

I had just lost my job at an NGO and saw a business opportunity. I told my friends to call me each time they wanted tickets. I would book their tickets for them and made some money. In six months, I sold 600 bus tickets. My friend suggested we build a website, so we brainstormed a bunch of ideas before settling on UgaBus.

2. What products do you offer?

We started by selling bus tickets online directly to consumers. Since then we’ve also launched a bus management system, a software-as-a-service (SaaS) product for bus operators. This is currently our biggest product. It is a platform for bus operators to digitally handle every element of their business: from inventory and employees to accounting and issuing tickets. UgaBus has digitised bus transport.

3. Describe UgaBus’ revenue model.

The SaaS product generates money from bus companies through monthly subscriptions based on usage of the product. The online bus booking platform generates a 5-10% commission on each ticket sold.

We also white label the product; we develop the software and sell it to bus companies across East and Central Africa.

4. How did you gain a foothold in the market?

When I booked my tickets at the bus park, I built connections with bus owners, booking clerks and every single stakeholder in the industry. When the time came for us to launch our online platform for bus tickets, we started with these booking clerks and our network.

A UgaBus employee demonstrating the app to a potential customer.

We also stationed ourselves at bus parks across Uganda dressed in branded clothing. Our team would talk to passengers about UgaBus and explain how to book online. From that, we got some of our first UgaBus app bookings.

5. How competitive is the industry?

It is very competitive and our biggest competitors are the brokers and touts: those young men positioned at the bus parks who use any means to convince passengers to use their buses. They have been there for so many years and have established themselves.

Other competitors also offer mobile applications to book buses but we have the experience. We have been doing this for the past three years and have superior products. We have also fine-tuned our product based on market feedback.

6. What are the biggest challenges to be successful in your industry?

Bus owners are still far removed from the technological era. When we try to convince them we can make things simpler by shifting them into the digital space, they are sceptical.

The other challenge is that the internet is expensive in Uganda. Customers would rather inbox you on social media than download the app because their smartphones don’t have space for an extra app or they don’t have money to spend on data.

7. Explain the mistakes you made in business.

We rushed into hiring people because we thought a big team was what we needed to succeed. We were spending so much on wages for people we didn’t need.

We also spent too much money on marketing techniques that didn’t apply to our industry. I recall spending a massive amount on YouTube ads in 2017. Back then, a simple YouTube video would take 30 minutes to watch because of the slow internet. The conversion was so terrible, it didn’t make any sense. I also remember hanging posters without checking whether it was a viable marketing approach.

We thought we knew it all in the beginning, yet, there were people with the expertise who would have helped us move faster if we had just reached out to them and listened.

When we were starting, we thought if we built the mobile app, people would use it. We were wrong. Having the app is only 5% of the work; the real hustle is offline, getting the product into the hands of users. That was when we shifted tactics and went to the bus parks and marketed directly to passengers.

8. What has been your most successful form of marketing?

Word of mouth has been the most effective because it brings outright results. We offer a referral bonus for each person referred to UgaBus. And direct marketing; being present at the bus park and meeting passengers so that when they need to book a return journey, they use the UgaBus app.

We market the SaaS product by meeting with the bus owners. We onboard them using the freemium model and give them a 30-day free subscription. Once they discover how simple it is, we charge the usual rate.

9. Tell us about one of the toughest situations you’ve found yourself in as a business owner.

When lockdown happened, public transport closed, no revenues were coming in and there was no money to cover our fixed costs. As the founder of the business, I had to decide whether to lay off employees or cut salaries.

I called every single employee. I explained that nobody was going to lose their job, that each person would have to accept a pay cut while we waited to see how things played out. Once public transport opened again, we would get back to business and they would receive full pay. All of them understood.-Howwemadeitinafrica

Ronald Hakiza, co-founder of UgaBus.

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DISCLAIMER: This report has been prepared by Bulls ‘n Bears, a division of Faith Capital (Pvt) Ltd for general information purposes only and does not constitute an offer to sell or the solicitation of an offer to buy or subscribe for any securities. The information contained in this report has been compiled from sources believed to be reliable, but no representation or warranty is made or guarantee given as to its accuracy or completeness. All opinions expressed and recommendations made are subject to change without notice. Securities or financial instruments mentioned herein may not be suitable for all investors. Securities of emerging and mid-size growth companies typically involve a higher degree of risk and more volatility than the securities of more established companies. Neither Faith Capital nor any other member of Bulls ‘n Bears nor any other person, accepts any liability whatsoever for any loss howsoever arising from any use of this report or its contents or otherwise arising in connection therewith. Recipients of this report shall be solely responsible for making their own independent investigation into the business, financial condition and future prospects of any companies referred to in this report. Other  Indices quoted herein are for guideline purposes only and sourced from third parties.

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