In an African mobility space that is getting more crowded and attracting serious investor interest, Cape Town-based startup LÜLA has carved out a niche for itself with its app that connects corporate commuters to private shuttles on their way to work.
LÜLA aims to save commuters time and money, and allows them to request, track and pay for rides. It provides its solutions to individuals as well as corporates themselves, who want to shuttle their staff to work and back on a scheduled basis. Cape Town corporates using its shuttle service for employees include Aurecon, V&A Waterfront, RCS and Old Mutual.
The startup began life as a side project in 2014 when co-founders Velani Mboweni and Xabiso Nodada were students at the University of Cape Town, becoming a legal entity in 2016 with the goal of making transport accessible, convenient and safe for people in emerging markets by using big data, mobile ticketing and shared infrastructure.
“Underpinning this mission was the idea that without access to transport, you can’t access economic opportunities, without which, you can’t solve poverty and social injustice,” Mboweni told Disrupt Africa.
While taking part in the Startupbootcamp AfriTech accelerator in Cape Town in the second half of last year, LÜLA settled on its current model of connecting corporate commuters with private shuttles, to save them money and free up time. Essentially, it is an alternative to the likes of Uber and Taxify.
“We realised there was a gap in the market to provide a service that was cheaper than driving and taking e-hailing services on a daily basis, which is significantly expensive, as well as one that is more reliable, safer and convenient than public transport,” Mboweni said.
“Moreover, we knew that to do something like this at scale it would rely on private stakeholders making choices at a price point where the value proposition outweighed the alternatives.”
Uptake of LÜLA has been “overwhelming” in ways both good and bad.
“We did not think we’d see such a high demand for our service so soon, especially from individuals, let alone companies,” Mboweni said.
He pays tribute to the team at Startupbootcamp AfriTech for helping the startup reach the next level.
“It’s wonderful to be in a meeting with a client pitching our solution, and before you’re even done they start selling it for you to their colleagues and seeing what is really possible. It gets tricky when the client wants to tackle a lot of use cases which are out of our core focus, but nonetheless most of them have been gracious enough to give it a shot and patient enough to try another use case,” said Mboweni.
LÜLA also raised small amount of funding from Startupbootcamp, to go with a seed round it raised in July, and is in the process of taking on board more investment to assist its growth. It is planning pilots in Johannesburg this year.
“We would like to explore our solution in other developing world markets. However within the next 12 months we’ll be working exclusively on Cape Town and Johannesburg to prove scalability,” Mboweni said.
The startup makes money through single trips and subscriptions, whereby users purchase weekly and monthly passes for trips, and also charges operators a commission on trips taken.
“In terms of revenue and profit, most of the trips we’ve done so far have been profitable, but the business is yet to break even. Revenues have seen about 200 per cent month-on-month growth since the pivot,” said Mboweni.