Onyeka Akuma, the CEO of Treepz, an embattled Nigerian transportation startup, recently shared new details about the company’s pivot to car-sharing services across Nigeria, Ghana, Uganda, and Kenya. The announcement, made on May 3, 2023, drew mixed reactions from the media and technology communities. While some applauded the innovation, others expressed concerns about the business model and market size.
Treepz originally launched in Lagos, Nigeria, in September 2019, pioneering bus hailing in West Africa. However, the public transportation industry’s high price-sensitivity posed a challenge, with the company spending $1.5 for every $1 earned and resulting in a negative gross margin of 5%, Akuma says in a statement. After carefully analyzing their offerings, Treepz then decided to prioritize car rental as their core business and discontinue other services. The decision to re-launch their B2C product with a car-sharing model and marketplace for car rental companies (hosts) as their single focus was made on May 3, 2023.
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Besides financial considerations, Treepz notes that it recognized several compelling trends that underscored the untapped potential of the car-sharing/rental market in Africa. First, the company observed a notable shift in consumer preferences towards flexible transportation solutions, with people and organizations prioritizing convenience, affordability, and environmental sustainability. Second, globally, the car-rental market is expected to reach USD $121.1 billion by the end of 2031, with more individuals and businesses seeking flexible transportation options. Third, over the past decade, the mobility landscape has undergone a transformation driven by technological advancements, rapid population growth, and urbanization.
Treepz claims prioritizes both sustainable and equitable transport, recognizing that they can coexist and reinforce each other. The company says the new business model addresses the issue of equitable access to transportation in Africa. Treepz is a car-sharing marketplace that connects car owners with individuals in need of transportation. Through the platform, owners can rent out their vehicles on an hourly, daily, weekly, and monthly basis, and users can conveniently browse, book, and unlock cars using the Treepz app.
By leveraging the sharing economy, Treepz aims to promote resource efficiency and reduce congestion. By offering a cost-effective and convenient solution, the company believes they can attract price-conscious consumers who are more responsive to changes in price, thereby impacting price elasticity and expanding the addressable market of car-sharing.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert.
As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard