Food deliveries have experienced a significant uptick since the pandemic struck. This gave South Africa-based media owner and social enterprise MotionAds – who started leveraging the ubiquity of food delivery bikes for mobile advertising three years ago – an unexpected and welcome boost. Their shared-value business model supplements the income of delivery drivers, a booming segment of the country’s gig economy. We sat down with founding partners, Jonathan Berkowitz and Elan Band, to learn more about their pioneering journey.
As with many companies, the business outlook looked rather gloomy in the early stages of the pandemic, says Jonathan. “We lost two large contracts at a time when we were really cash-strapped. Being a new kid on the block, it was a particularly tough blow.
“When the first hard lockdown kicked in, we had to pause our business for six weeks. Even though we had an attractive proposition, companies were scared to spend their advertising budgets in those uncertain times. Existing clients put renewal payments on hold, and we had to extend advertising campaigns by a month.
“Fortunately, as demand for food deliveries started increasing, clients soon saw the value of ‘moving billboard’ advertising to engage with an on-demand audience.”
Innovation during the pandemic
Both partners agree that their business wouldn’t exist without technology. Elan explains, “Covid forced our business to scale the team remotely across the country. Previously, we conducted inspections and driver meetings manually, and now we use GPS technology for fleet monitoring, live tracking, and, for our clients, real-time analytics.”
The importance of accounting
MotionAds also found stability in its accounting system. They have to make regular payments to their driver-partners, which used to be done manually at a bank. Since automating through Xero and a payments partner, they now make automatic bulk payments, which means faster payments to the drivers. They also run a tech-driven incentive programme that includes bonus payments for the best drivers, with all communication taking place via WhatsApp.
The company has since built up an impressive client list – from national FMCG brands like Woolworths and Pick n Pay to insurance companies such as Hollard and fintech companies like Yoco.
“We’re still going through the process of becoming financially savvy, but through our accountant, we’ve seen the power Xero has,” Jonathan says. “As a small business, we don’t want to get bogged down with admin-intensive tasks like tax returns. Instead, we’re trying to sell more advertising space so we can help more drivers each month.”
The partners say they’ve relied heavily on their accountant to help them navigate a new economic landscape. “Through Xero, our accountant has full visibility of the business. We don’t need to supply documentation or even have phone calls. Having an accountant that we can trust with vital aspects of the business, such as investment and expansion decisions, gives us immense peace of mind,” Elan adds.
Growing its shared-value business model
MotionAds aims to grow its current fleet of driver-partners to 1,000 motorcycles by the end of the year. “Our business is as much about brand awareness as it is supporting and empowering food delivery drivers,” notes Jonathan. Therefore, the company is looking at expanding current driver benefits such as monthly payments and breakdown assistance to include insurance and discounted parts and accessories. “They are essentially micro-enterprises, so we’re trying to empower and support them as much as possible.”
For other entrepreneurs, the duo has two tips: “Firstly, keep a close eye on trends. Identify a need, develop a solution, then jump in before the trend takes off. Secondly, build open and honest relationships with your clients and suppliers. And never be afraid to ask for help from friends and mentors.”
The post Pioneering duo sets the wheels in motion for South Africa’s gig workers appeared first on Xero Blog.