Truck service startups are on the rise in the UAE

Truck service startups are on the rise in the UAE

While truck companies have been around for decades to transport large shipments of goods, the UAE is now seeing a rise in truck service startups that use technology to match trucks with clients.

Elie El Tom came to Dubai 14 years ago after graduating with a civil engineering degree. As a certified project manager working in the water treatment industry, he often dealt with transportation companies in the region.

“In the companies I used to work with, [all departments were] advanced,” he said. “But when it came to trucking and transportation, they still [went] the traditional way of calling drivers to go around the city for pickups.” When, at one point, it took him a day to arrange for a single crate of goods to reach its destination, El Tom decided to devise a more efficient method of picking up cargo.

Shipping at the palm of your hand

In October 2016, El Tom founded Yalla Pickup, an on-demand truck service . His startup recently graduated from the first class of Sheraa’s Accelerator Program. Instead of arranging truck services through the phone or in person, Yalla Pickup links businesses and individual customers to trucks through a mobile and web platform. Based on location, date, time, and shipment, each service can either be scheduled for later or requested in real time. Yalla Pickup’s client list includes over 50 businesses and 300 individual customers in the UAE. The startup has seen a 200 percent month-on-month growth since January 2017.

Yalla Pickup’s team (Image via Yalla Pickup).

The cost of pickup depends on the shipment, distance and truck service among other variables. Yalla Pickup takes a commision fee per deal.

Listening to a friend complain about the problems plaguing his company’s truck shipments, Gaurav Biswas wondered why there wasn’t an Uber for trucks. Partnering with his childhood friend, Pradeep M., Biswas launched TruKKer.ae in the UAE, also in 2016, as a business-to-consumer company with a trucking service app and web portal. Biswas is the CEO, while Pradeep M. serves as CTO. The company has 11 employees in the UAE and seven in India.

TruKKer contributed more than $300,000 of their own funds to launch. They have seen over 1,600 percent growth in nine months with average monthly revenues touching AED 500,000 (US$ 136,000). The cost per trip varies, with customers being able to choose from four service options – moving homes, delivering shipments, renting trucks for a day or for a trip.

TruKKer’s team (Image via TruKKer).

“As much as we describe our business as an Uber for trucks, I can go on for hour[s] describing how it is not [like] Uber or a cab hailing business,” Biswas said. For one thing, unlike cabs, where the service is completed once the client steps out, the pickup and drop off of shipments are more complicated. Some clients even request, and receive, a credit-based service ranging from 30 to 90 days. There’s also a relatively elaborate documentation process for meeting insurance, regulation, and shipment-packaging criteria.

Challenges

“A few VCs [have asked], ‘What is the tech barrier to entry?’ ” said Biswas, referring to questions from venture capitalists about technology-related obstacles that might have blocked TruKKer’s entry into the market. The answer? “Zero,” he insisted. “This is more of an operations play and not a tech play.”

For El Tom, the challenge was in communicating the company’s mission of “on time, safe, and polite pickup truck service…something you can hardly find in this region,” to his drivers.

“[The drivers] are not used to having such a smart platform where they…work in a polite and safe manner,” he said. “The drivers come from communities which are sometimes not very well-educated.”

Biswas said one of his challenges is to acclimate the client to digital interaction, as opposed to the standard industry practice of handling the process via phone or in person.

Versus competition

Both founders of the two startups claim to be largely unaffected by the competition due to the large market size. “The startups are competing in terms of the idea [or] fundraising…as a business we are not competing,” said Biswas.

Referring to companies like Carry or LoadMe, El Tom said competition is healthy, because “at least we are creating this awareness among businesses and people that [the] service exists.”

In fact, El Tom said he turns to the ‘big boys’ like Careem for advice in contributing to the region’s transportation ecosystem. Initially bootstrapped at nearly $500,000, Yalla Pickup just announced AED 1 million (US$ 272,000) in funding from strategic partner The Box, a storage facilities company based in Dubai. Yalla Pickup’s team of 10 also shares operations with The Box, allowing them to provide storage services to their customers.

“We were working on a similar ‘Uber for trucks’ concept prior to this,” said Wadih Haddad, founder and CEO of The Box. “The collaboration with Yalla Pickup works because they have the service in place to drive forward with the concept, while The Box offers the infrastructure to make this happen.”

After 10 months of recorded client feedback, Yalla Pickup will launch a technologically enhanced version of its services at GITEX 2017 in preparation for penetrating new markets.

Meanwhile, with the business-to-consumer side of the enterprise growing apace, Biswas has shifted TruKKer’s focus to its business-to-business operations, and will continue expanding its cross-border services to Saudi Arabia, Kuwait, and Oman. TruKKer is now in the middle of raising funds for its seed round.

Feature image via Stockvault

Source: Wamda – Truck service startups are on the rise in the UAE

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