SUCCESSFUL BUSINESS BUILDS CASH COW FOR EXPANSION â€“ ONUNG, REMLORDS BOSS
As a microfinance expert, how have used this tool to improve the lives of the people, especially in Calabar where you are based?
I helped to introduce the micro-finance aspect into the transport business. Our dream was to have 2,000 taxis in the city of Calabar through the microfinance scheme. The state government created the scheme to empower people in different ways. But transport has taken N1bn out of the scheme. We did that with the first 50 taxis. We were already getting set for the banning of the bike. Under the micro credit scheme, those taxis would eventually belong to the drivers. They are made to pay a little sum of about N50,000 as a deposit. Once the car is handed to the driver, he is expected to pay N2,500 everyday and after three years, the vehicle belongs to him. This is regulated by the department of public transportation.
We have created our own brand, which we just commissioned. Now, there are 50 of the vehicles in our fleet. The target is to make it 500 units. We have products that will make us put more vehicles on the fleet without spending any money. In the next three months, we will be hitting about 100 vehicles.
As the first approved operator of modern urban taxi in Cross River State, why did it take you such a long time to roll out?
We got our licence in March last year, by November, the Canaan Cabs started operation. We had about 20 to 25 cars. In January, we added the next 25cars. We had to postpone the launching of Canaan Cabs in order to make the office ready.
Why did you go into the taxi business in Cross River State?
Before the Cross River State Government banned okada in November, I already knew there would be great opportunities in the new taxi business. We were the first company to get the franchise for modern urban taxi from the state government in March last year having met all the conditions.
How do you recruit and train drivers for the operation?
Every driver that will do business with us must go through the due process. The Department of Public Transportation must first do all the tests, including the eye. We pay for that. The government also has a data base to keep track of every driver. It is the government that gives them ID cards as a way of regulation. As you are entering a cab, the cab has a number; the driver too has a number as well.
For us too, there is a periodic training for the drivers to keep them abreast of the latest technologies and improve their manners.
What informed the choice of the brands?
First, we are aware that the Chevrolet is a very good brand. And the company has a well equipped workshop in Calabar. Kia too is also coming up. The issue of Kia coming on was not initiated by us. It was the lobby from the Kia people that made us go for the brand. They were not comfortable seeing too many new taxis in the city without their brand. They had to give us a lot of concession. The two brands have workshops in the city. We noticed that some other people doing similar business have no workshops and there are usually problems arising from this.
The Piccanto we chose is in short supply. We have not been able to get the quantity we require.
How much have you invested in the project?
For the 50 vehicles, we've already spent N100m. We don't intend to do too much of real investment by ourselves, being a franchise. So we are developing also that product, just like what Suzuki is doing with C&I Leasing. For instance, you pay N500,000, we ask the bank to make the balance available and we pay you some money. Thereafter, you can take the car if you want. That, we believe, can also increase our stake. Again for us, the cabs will be acting as the cash cow, which is the interesting aspect of the response. This is because the risk is very low. If we invest another N100m on 50 taxis, you are sure of recovering the money in 10 months. For us, if we need to invest directly, why not.
Do you have enough staff and facilities for effective management as a pioneer leading the operation?
For the staff strength, we have different products of the Canaan Cabs that enable us to open offices here and there and put people there to manage them. There is the Park and Pay. This is a bit easy. What we do is to condition the driver to send the vehicle and he brings a particular amount of money in a day so that he can serve the different nooks and corners of the city. You now have a dedicated account, like somebody who doesn't have a car. The driver picks him or her in the morning and drops in the evening. The drivers are permanent staff. Our offices are equipped. The head office is well equipped with the fleet management system, the core centre service, all of which would enable us management the business very well. The mileage also shows on the system so that we can withdraw the cars when they are due for services. All these things have been put in place so that we can have prompt and efficient services.
Apart from the dealers' workshops for the brands, does your company have its own workshop?
I have a workshop which is the Crossline workshop, with two sets of staff that repair vehicles for the Crossline and Remlords. The head of operations is supposed to head the workshop. We have more than 200 Toyota cars on our fleet. We are modernising the workshop to be able to handle what we are doing now.
How do you insist on everyone using the cab to patronise the workshop?
Nigerians are yet to fully embrace the culture. They think to buy a brake pad, for instance at N7,500 at a workshop may be expensive when they can get something like that at N1,500 outside, even though it may not last. But we try and give some discount that is reasonable. If the service will cost N14,000, for instance, it may be reduced to N8,000. We also have the same partnership with Kia even though it is not as elaborate as the one with Chevrolet. This is done to cater for everybody. Apart from our fleet of Canaan Cabs, all other green and blue cabs are attached to my system. We also have to direct them because they are linked to my bank. It is like an octopus. It is my bank that will collect the money and when you don't pay, we hack you down. When you also do not service, we direct you to the workshop.
What cutting edge do you have to encourage people to use Canaan Cabs?
We have branded our drivers to make them look unique from other taxi drivers.
When do you hope to complete the target of 500 cabs?
We are looking at the infrastructure available in the state. Can it cope with the figure now? Each of the approved operators is to do 500 taxis, that means 2,000 units. Everybody is looking at this. Government is doing a lot. We now have the traffic light. They are also putting in feeder roads. What government wants to do is that in the next six months, it would move all major garages out of town. That will create more business for us. If you to travel to Aba, for instance, take a taxi to the garage. For the things that we have set up, we are sure that next month, we would have more than 100 cabs at Canaan. Like I said, when you do a business, you build a cash cow. That cash cow will fund the next aspects of the business. That is my strategy as a businessman. And the plan to make that happen with the Canaan Cabs in the next few years is on course.