This enterprising startup has taken a new approach in logistics services.
Logistics is an important aspect of any business, be it a big business group or a modest shop. Many goods and products such as furniture, gas, milk, hardware, etc. are being continuously transferred from one place to another within Kathmandu valley.
To cater to this need, Amigo Khadka led the operations of Upaya City Cargo with Sandip Subedi and Rahul Malla Thakuri as marketing and logistics heads, respectively. They operate under the guidance of a very experienced board of directors led by Suman Rayamajhi and Ranjeev Shrestha.
Before the implementation of the idea, the trio did extensive market research for months Rahul, visited different hardware and electronics shops and stores that sell construction materials, and furniture and tried to find how they search for vehicles, how much they paid and so on. Likewise, Sandip, head of logistics, did research on the problems faced by drivers. He spoke with them, analysed their lifestyle and behaviour.
From their research, they discovered that business owners bemoaned the unavailability of vehicles to carry their loads and drivers felt they were not getting sufficient work. To bridge the gap between the two, they started Upaya City Cargo in September 2018. Khadka says that thousands of bulk goods are transferred from one place to another in Kathmandu valley daily. Yet they are not managed. City Cargo wants to manage market inefficiency using technology.
Upaya City Cargo is a logistics marketplace that brings together clients looking for delivery services with drivers that are ready to provide the service. The online service provides vehicles for cargo service at an affordable price within the Kathmandu valley through an easy to use app. Customers can choose their pick-up and drop-off location, and the vehicle type. For now, the company operates two types of vehicles - TATA Ace and TATA Pickup. Customers can also choose multiple stop locations if they so desire. They can get their estimated price as soon as they confirm all the requirements.
The City Cargo team states that affordable pricing, easy availability, and convenience are the unique selling propositions of their company. “Our price is 25 percent lower than the market rate. Along with it, customers can get a VAT bill after reaching their destination”, states Khadka. They also have a tracking system whereby customers can track where their driver is. This solves the problem of drivers wandering off and delaying drop offs. The price for the trip is determined by the distance, weight of the goods and the number of stops.
People who want their service can reach them through their website, mobile phone or the app. They say that most clients contact them through the phone but with different offers and schemes, they are trying to increase the number of customers who approach them through the app. To reach their customers, they are doing below the line marketing and digital marketing. Soon, they are planning to do above the line marketing as well.
In eight months, they have secured over 1,800 clients who use their service to move things from one place to another. Their primary target customers are companies of hardware, furniture, paint, tiles, pipes, and sanitary items. Besides such companies, they also serve customers who are looking for vehicles to shift equipment from their homes or rooms. It makes the trio proud that big conglomerates such as Chaudhary Group, and Jawalakhel Group of Industries often use their service. In addition, they have various partnerships and collaboration with companies like Sipradi and Shikar Insurance. Today, the startup venture is growing at a rate of 40 to 50 percent every month. City Cargo currently has more than 350drivers. They train the drivers on professional etiquette and ways of handling customer complaints. Furthermore, to motivate drivers, they also give out a ‘Driver Partner of the Month’ award.
Motivated by Positive Feedback
The team is happy with the response and they say that it motivates them to work harder. Rahul shares how happy the hardware and furniture shops are to receive the VAT bill for the transport expense while transporting their goods. He further shares the story of an owner of a hardware shop who had his own vehicle. “The owner found our service so easy and effective that he was ready to sell his vehicle and use our on-call service instead,” says Thakuri. “Moreover, he is able to deliver his goods in multiple places at once. With his vehicle, he had to wait for one delivery to be finished before sending other deliveries. Now he does not have to”, he says.
Besides clients, the drivers working with them are also very satisfied. “Our drivers share that they are treated professionally by the clients. Before joining Upaya City Cargo, they say that they were treated as being inferior,” shares Sandip. “So their living standard has also increased”, he adds.
Prospects and Challenges
Sandip says that people do not want to use data as they think it is costly. Another thing is that people are hesitant to use any new products. “This is the reality of the market, yet we believe that people will trust us gradually,” says the trio.
Uncertainties in government policies are also a challenge for them. “Sometimes we don’t want to make mistakes, but it happens due to unclear policies”, they say, adding, “Issues of VAT and TDS are some of the unclear policies among many others”. They also say that they are unsure of where to go and who to ask if there is no clarity. Furthermore, they feel that space for innovation and experiment should be granted. The business potential in their line of work is huge, they say, because logistics is an important element of any company. “Currently we are operating only inside Kathmandu valley and we have used only two types of vehicles. We are planning to expand our service out of the valley and soon towards intercity. In this regard, there is huge market potentiality”, shares Khadka, highlighting their business prospects. However, currently, they are focusing on strengthening the service in the valley.
Mantra for Startups
The trio believes that energetic and enthusiastic youths should be guided by experienced people. “Although we are only a year old, I think we have found a mantra for startups”, says Khadka. They say that they are young, energetic and want to show their work, but they do not have the experience and network. While there are experienced professionals with vast network and knowledge who want to try something different and innovative but have their own jobs and other priorities that doesn’t allow them to risk it all. “So we have a separate management team where there are people who are experienced, who have a good network and can bring funds. They mentor the young and energetic operations team. Given the difficulty in receiving funding for startups, building network and partnerships, I think the value addition of this model is tremendous for any startups”, he adds. They believe that this structure of having separate management and operation teams is very important for any startup to sustain and succeed.