Generation start-up: UAE's ekar drives car-share sector at top speed
Co-founders Vilhelm Hedberg and Ravi Bhusari rolled out the app-based vehicle sharing service after spotting a 'gaping' hole in the market
Car sharing has a come a long way from the early days of university students pooling cash to buy a car and sharing it among themselves to split the costs.
The concept is pretty much the same today but technology has made it better, turning car sharing into a mass-market business.
While car sharing is widely available in the developed world, in most major cities in Europe and in the US, it did not exist in the Middle East until a few years ago.
There was a big, gaping hole in the Middle East and we knew right away that Dubai being such a forward thinking city, as well as Abu Dhabi for that matter, would be perfect candidates to launch such a service in this region.
Vilhelm Hedberg, ekar
In 2016, Vilhelm Hedberg and Ravi Bhusari decided to fill the gap when they launched ekar, the first and now the biggest car-sharing platform in the region.
Ekar is a UAE start-up providing a network of vehicles that can be booked and unlocked via its mobile app.
“When I, in 2014, was looking into it with my partner, we noticed that the Middle East region had zero car-sharing operations,” says Mr Hedberg, who is also the chief executive of ekar.
“There was a big, gaping hole in the Middle East and we knew right away that Dubai being such a forward thinking city, as well as Abu Dhabi for that matter, would be perfect candidates to launch such a service in this region.”
The rate of growth from the early stages of ekar’s evolution, when friends and family came together to help lift the venture of the ground, has been phenomenal, says Mr Hedberg.
However, there are many milestones to reach and targets to achieve before he is ready for a break from ekar – to hit the beach or travel the world again.
Simply put, ekar is car rental simplified, without the hassle of being bound to a single location such as a rental kiosk. Customers can pick up and drop off the car at any location, while paying per-minute at a fraction of the cost of a ride-hailing or a taxi service.
The traditional car rental, Mr Hedberg says, is more of a “dinosaur” compared to ekar, where there is no human interaction and the process can be completed seamlessly through a smartphone.
“We are a much more user-friendly experience,”
The company, with a fleet of 500 vehicles and 75,000 members, is very different today from when it first launched operations in Abu Dhabi, offering its services to Etihad Airways’ cabin crew.
Why cabin crew? They are a very large “homogenous group of people who all have similar need for short-term car sharing”, says Mr Hedberg.
“We recognised the problem and we solved the problem for the cabin crew who are typically in the region for about 10 days a month, and it’s not cost-effective for them to have their own cars,” he says.
“Providing the cabin crew with a network of cars was a win-win,” says Mr Hedberg.
Soon after Etihad, ekar launched its service for Emirates cabin crew in Dubai.
“Ek” in ekar is inspired by the airline code of Emirates, which is “EK”, he says.
However, it was the company’s participation in Dubai’s Roads and Transport Authority car programme in January 2017 that helped ekar get traction with the city dwellers, when it launched services to the mass market.
The journey, as with most start-ups, has not been an easy ride for ekar.
The company vehicles were used for 30 minutes per car per day on average in the first month of the RTA launching its programme.
Fast-forward two years, vehicles are now booked for what is considered the optimal time in the car-sharing world – around seven hours per car per day.
It was with a lot of support from the RTA, in the form of branding at metro stations and radio ad campaigns, that helped ekar take off in Dubai and Abu Dhabi.
Word of mouth has also worked wonders with people across the emirates now booking cars with the company.
“We have in the neighbourhood of about 15,000 app openings everyday [with people] looking for a car, and we are only booking 1,500 [cars]. We are actually looking to significantly increase the supply of vehicles,” Mr Hedberg says.
Plans are now in the works to expand the fleet.
Ekar, he says, has strong relationships with a number of car brands, from Volkswagen to Mini Coppers and Infinity to MG. The company can either directly lease cars from dealerships or take them on a profit-share basis, under which ekar gets the vehicles for no cost and plugs them into its network. The typical profit split comes out to about 50-50.
“I can guarantee the dealership that we will have the car driven around seven hours per car per day, which is a highly profitable amount of time for that car to be driven,” Mr Hedberg adds.
To put things in perspective, the average economy car in ekar’s fleet is turning perhaps Dh6,000 to Dh7,000 of revenue per month, which is far better than the earnings of a rental vehicle on a monthly basis, he says.
Ekar last month said it has supercharged its Abu Dhabi fleet with the addition of Mini Coopers, Infiniti Q50s and Q70s, Nissan Kicks, MG RX5 and ZS cars.
Since the initial seed round of friends and family, which raised Dh1.5 million to help launch the company, ekar has gone through Series A funding with Audacia Capital and is about to formally close a Series B funding round, Mr Hedberg says.
Including the imminent funding coming through Series B, ekar’s total funding since the beginning is north of $16m (Dh58.7m), he says, declining to name the investors in the latest round.
With “great investors” on board, the company has been able to expand its fleet in the UAE and has extended its footprint to Saudi Arabia, the biggest Arab economy, where it is serving Saudi Aramco, the largest oil producing company in the world.
“We’ve been working with Saudi Aramco for around seven months and we have provided vehicles in Dahran compound in Dammam,” Mr Hedberg says.
Ekar is now getting ready to launch its operations in Riyadh where it has already set up offices.
“Saudi Arabia, we are there. [In] the remaining [Arabian] Gulf countries, Turkey and Egypt – we are looking to achieve the [expansion] goal by 2022 with 10,000 cars and a million members. That is the plan,” he says.
Updated: August 3, 2019 07:30 PM