The companies growing in Uber’s shade

Almost a decade ago, the comedian Superwog said people should vote for his friend Mina Nada in elections for the student union board at Sydney University because he understood the internet and would get things done.

Superwog, real name Theodore Saidden, was right.

Zoomo chief executive and co-founder Mina Nada holds an engine from one of the company's bikes at its Surry Hills, Sydney, store.
Zoomo chief executive and co-founder Mina Nada holds an engine from one of the company’s bikes at its Surry Hills, Sydney, store.CREDIT:MINA NADA

Nada, 32, went on to leadership roles for food delivery platform Deliveroo in Australia, followed by sharebike company Mobike.

Now, he hopes to make it big with Zoomo, an e-bike company he co-founded in 2017.

With investors chipping in $16 million to the company’s last fundraising round and nine stores across Sydney, Melbourne, Brisbane, New York, Los Angeles, San Francisco and London, Nada has lofty goals.

“We’re trying to build the Tesla of electric bikes here,” Nada says.

It is a far cry from the delivery riders who are his primary customers for the e-bikes Zoomo rents out.

Pay data for riders, many of whom are international students, is patchy but a recent Victorian government inquiry suggested many earn less than the casual minimum wage with some as low as $14 an hour. The industry suggests $22 an hour is more accurate.

Zoomo is one of a wave of companies that have sprung up around the big delivery platforms like Deliveroo and Uber, providing the modern equivalent of taxi bases and filling the gaps in an industry that, unlike traditional employment, leaves its contract workforce to provide their own equipment.

A group of former Uber employees founded Spark Bikes, a Zoomo rival, last year. Retailers like Pirez, a Melbourne-based site and store, sell e-bike and kits to motorise regular bikes. Upcover, launched late this year, offers insurance designed for riders.

The pandemic has turned out to be an opportunity for some start-ups because it has spurred rapid growth in the industry. Easi, an Asian food-focussed delivery platform is now worth $500 million, its national operations manager Kitty Lu says.

With the coronavirus resurgent in parts of Sydney and customers habituated to ordering online, the industry looks set to grow.

But regulation looms for the sector in the wake of a horror three-month period in which at least five riders died in Sydney and Melbourne earlier this year.

Victoria is considering its response to the 20 recommendations of its gig economy inquiry, including restricting independent contractor status to workers who are doing something “entrepreneurial”.

NSW is moving too. A government-run industry roundtable in December won a joint commitment to create a set of safety rules for the industry and Customer Service Minister Victor Dominello announced the government would begin looking at a workers’ compensation scheme in 2021.

Regulation could be a boon or a burden for companies growing in the shade of the delivery giants.

Insurance providers could suffer if the sector is forced to offer workers compensation but Nada hopes the government will add more bike lanes and enforce speed and bike safety rules more rigorously.

E-bikes that can do 60km/h with bad brakes, rusted chains and leaky batteries wrapped in plastic wrap to keep out the rain risk riders’ safety, he says.

Zoomo’s bikes have motors that top out at about 25km/h, the legal limit, and regular servicing is part of its pitch.Advertisement

Pirez, a Melbourne-based e-bike store, is among several that sells high speed bikes and conversion kits and hopes soon to expand with more stores. Managing director Cristina Bantos says some of her customers are farmers, using the bikes on private properties where they are legal, but admits she cannot control how every kit is used.

And in parts of America and Europe, speed limits are faster, she says, whereas “in Australia the road regulations are a bit archaic”.

There is wide agreement across the sector that the rules should change. How could determine which founders’ dreams become a reality.

By : Nick Bonyhady – The Sydney Morning Herald

1 Comment

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s