Arcab, a Dubai-based mass mobility solutions start-up, is driving change in the UAE's public transport sector by helping bus operators to make use of idle fleets and ensure commuters arrive at work safely and on time.
Founded by Bilal Shabandri and Kevin Martin in 2019, the company is currently working with more than 40 bus operators in the UAE to help at least two dozen companies carry their employees to work.
“We enable the fleet operators such as Dubai Taxi Corporation, Europcar and Emirates Transport, which own thousands of buses in their fleet that might be idle, that might not be fully utilised, and we help them to bring in additional revenue and increase their gross margins – all of these with vehicles they already have in their fleet,” says Mr Shabandri, chief executive and co-founder of Arcab.
“For example, we brought in half a million dollars in revenue for some of the largest operators and we increased their gross margins from 7 per cent to 30 per cent in less than a month with vehicles they already had in their fleet.”
Mr Shabandri and Mr Martin founded the company after noticing how commuters struggled to reach their workplaces on crowded buses and trains.
“I was working with a large corporate in Business Bay, while Bilal went to work at Jebel Ali. Getting there was not pleasant. The amount of time, stops and costs didn't fit the bill for us and we felt that many others felt the same way, too,” Mr Martin says.
The co-founders initially started with a simple bus-pooling app to solve their problem and steadily transformed it into a connected suite of products to help small and large-fleet operators run their businesses better.
Since then, the start-up has developed different products to run their operations, including a mobile application to help passengers and drivers to track transport, as well as a dashboard for operators to run and schedule buses. Companies that hire buses to transport their employees can also monitor and manage the movement of vehicles through the dashboard.
Owing to the coronavirus pandemic, demand for Arcab's services has increased as companies focus on transporting their employees safely from their homes to work and vice versa, Mr Shabandri says.
“The pandemic presented a blow to many of the bus-related apps in particular, which had, before the pandemic, been one of the fastest-growing segments in mobility,” he says.
“However, for us, despite the shift in place of work, we saw that businesses were increasingly looking for high-capacity, private, sanitised vehicles to avoid the risk of infection for their employees who would have to otherwise travel in unregulated or overcrowded modes of transit.”
On the supply side, operators were trying to figure out how they could come up with innovative business models and drive towards profitable growth.
“As such, we saw a boost with fleet operators leveraging our technology to increase vehicle utilisation and profit margins as opposed to procuring new assets. This was a win-win for us and other operators on the platform,” Mr Shabandri says.
As demand for its services grew, the company’s revenue jumped 22 per cent per month and the business, which is part of Abu Dhabi’s Hub71 and the Dubai Future Accelerators programme, is now looking to expand to Saudi Arabia, the Arab world’s largest economy, in the coming months.
“We are quite optimistic about the massive opportunity across emerging markets, especially in this region. There is an increasing demand from corporates and fleet operators globally as they move towards initiatives that allow them to operate more efficiently and profitably,” Mr Shabandri says.
Arcab, which previously raised capital through angel investors and grants from UAE-based entities, is currently in the process of closing a seven-figure funding round involving angel investors and venture capital firms from the region.
“Our current focus is to on-board 600-plus transport companies authorised to provide transport by entities such as the Roads and Transport Authority. We are also looking forward to replicating our success and improving millions of daily commutes in other regions within the Middle East,” says Mr Shabandri.
The total funding secured by start-ups in the Mena region rose by 64 per cent in the first half of the year as economies continued to recover from the coronavirus pandemic.
Funding for Mena start-ups during the period was $1.2 billion, more than the $1.09bn raised last year, according to the latest report from data platform Magnitt.
Q&A with Bilal Shabandri, co-founder and chief executive of Arcab
What successful start-ups do you wish you could have started?
A start-up I’ve come to admire the most is Shopify. They’ve not only managed to create an amazing tool that democratises the ability to create an e-commerce website, but also ventured into a complementary range of services from emailing, shipping, third-party apps and even financial services. I am excited to see what more they can do with something that started out so simple.
What is your vision for Arcab?
I think we’re at this phase where the movement of people and things is transforming at full speed. With apps and delivery for everything you can imagine, we are looking at ways by which we can move people and things in the most efficient way possible. The obvious answer is mass transit, moving them together, but I believe that we can take something that is archaic and then revolutionise it for the modern world. At the end of the day for us, it's all about building a sustainable business that every partner who works with us loves being a part of.
Where do you see yourself and Arcab in five years?
We’re just getting started and in the next five years, hope to be a leader in aggregating millions of vehicles and putting them to use in different ways for making moving together possible and to empower the operators we work with. In five years, we would have mastered and maximised utilisation of traditional assets. As for me personally, I am really passionate about the problem we are solving and I would love to continually attract the best talent to work with us while creating a fantastic work culture.
What new skills have you learnt in the process of setting up Arcab?
With the talented team that I am surrounded with, I am constantly in a learning mode. My view is that running your own business teaches you much more than a formal education or a regular job. It is akin to a real-life, accelerated master’s degree in business administration programme, but much better since you actually are able to apply learning and test it in the market. I had to learn about and become an expert at fund-raising. To do this, I had to improve my pitching and communication skills, expand my network for warm introductions and have a full understanding of the venture capital process and start-up lingo so that we could attract the right investors, partners and talent. Being a founder and chief executive is a massive responsibility, but it is extremely rewarding and humbling.
Launch year: 2019
Number of employees: 14
Funding: the company is currently in the process of closing a seven-figure funding round involving angel investors and venture capital firms from the region