Yuzah has been tagged Uber for Diesel; a tag the startup is wearing comfortably. Not the most original analogy, but effective. The startup recently scooped up the 1 million naira prize money in the Airtel catapult-a-startup competition along with six other startups. We hunted down the Yuzah CEO, Ovo Emorhokpor and delved into details about the company’s services and what’s in store for… users. (I know, I’ll show myself out).
TechCabal: Let’s begin. So Yuzah is Uber for Diesel. Interesting! Where did that come from?
Ovo Emorhokpor: It came out of several pain points I had personally with buying diesel as well as those shared by friends and colleagues. These include – spillage in your car, fuel queues which make it a tedious affair getting it from the station among others.
Ooookay…but why diesel though? Aren’t petrol and kerosene in the same category? Considering we buy them in pretty much the same way and there are similar hazards?
We decided on diesel delivery because it is the one retail fuel delivery service that is already on the ground and we could layer a technology platform on top of it to make it more efficient for the buyers and the sellers. The others will require infrastructure to execute, which we are not cut out for as a technology company.
I’m gonna need you to explain “the one retail fuel delivery service that is already on the ground”. Are you saying that diesel’s retail distribution is different from petrol’s? I assumed if you wanted any of these two, you would simply walk into a filling station to get them.
Sure. You can walk or drive into most stations to buy diesel, petrol or kerosene. However, there are trucks that also make home and office delivery of diesel in Nigeria. You really don’t have that for kerosene or petrol.
That’s very interesting. Who owns the trucks?
Some trucks are owned by the oil marketers but majority are owned by private individuals and businesses. They source for diesel from the importers of diesel and then market and sell to homes and offices around the country
Is this legal? Don’t you need a license or something to do that?
Definitely legal. All they need is to be registered with NUPENG – one of the major unions for the oil and gas industry.
What stops someone from just copying Yuzah right now? You know, build an app and sign drivers up?
Nothing stops anyone from developing a similar app. The key drivers of the successful execution of our strategy includes building capabilities and systems around some core elements such as technology, customer acquisition, yield management and customer satisfaction. We believe these are the advantages we will have over others.
So was it hard to convince the diesel truckers to sign up? How many are onboard?
It was difficult convincing the truck drivers. But the few that do get the idea and the potential impact to their business do jump on board immediately. We have about twenty (20) active drivers to cover our initial launch area – Lekki and its environs. As we expand, we will be looking to bring more drivers onboard.
What is the most compelling value proposition that has swayed these drivers so far?
The Yuzah platform has been a more efficient way for them to get customers. Otherwise, they’d have to do all the marketing work to find and convince these same customers to buy from them. So lower marketing cost, more customers and higher diesel turnover translates to higher revenue for them.
Great. Obviously, you think this has the potential to scale past Lekki then. How soon, and to where?
Yes it does because diesel is consumed everyday around Nigeria. Our immediate plan is to expand into most parts of Lagos by Q1 2016 and then figure out the next logical location outside Lagos to move into.
Just how big is the “diesel industry”?
Nigerian households spend roughly N700Bn per year on diesel for generators.
Wow! Hence, Uber for Diesel. Who came up with the analogy?
One of my team members.
What are your growth and revenue targets?
We don’t publicly disclose targets but suffice it to say we are very concentrated on getting Lagos right. That in itself is a very large market.
Are you in the market for investment?
We are not currently raising money but the interest is always welcome so we can have an available list of prospective investors to call upon when we do start to raise. This also gives us a chance to get to know the investor and he/she gets to learn more about us and our business. We will, however, be gearing up for the next round sometime this year.