LULA has taken over the South African branch of the US-based staff bus-sharing startup Zeelo in an acquisition of undisclosed amount. LULA is a ride sharing platform dedicated to serving office workers.
Zeelo launched in South Africa in the year 2019 and has raised $33 million in funding. It has completed more than 2 million rides per annum in South Africa. However, it is now leaving the country as it wants to focus on its US, UK and Ireland markets. After acquiring the bus-sharing startup, LULA has Zeelo’s vast network of over 18,000 riders at its disposal.
“It has been a remarkable journey and we are grateful to our team, clients and suppliers for giving us the opportunity to serve them. Whilst the decision to exit the region was a challenging one, we are excited to support the transition of our customers and suppliers to the LULA platform and look forward to witnessing LULA’s future successes in tackling the transportation challenges in South Africa,“ said Sam Ryan, founder and CEO of Zeelo.
The decision to exit the region was a challenging one [but] we are excited to support the transition of our customers and suppliers to the LULA platform,“ He said.
According to the 2020 National Household Travel Survey in South Africa (NHTS), it was reported that 43.5% of workers made use of private transport (car/bike) solutions in their commute to work. In contrast, only 35% used public transport, which includes bus, car and bike. In fact, ridership on public transport has been significantly decreasing over the past decade, in part due to a severe lack of reliability and inflated costs associated with travel.
Transport costs are at an all-time high in South Africa. The rising cost not only affects the quality of life but has a negative impact on employment as opportunities could simply slip out of financial reach. There are well-founded concerns that many workers simply cannot afford to get to work using existing transit means. Thus, approximately twenty percent of workers have reported walking all the way to work on a daily basis.
By using taxis, a worker spends an average of R960 a month on average to get to work, over R745 for buses, and R581 for trains. Platforms like Uber for Business, MoveInSynch and LULA currently enable employers to reduce this cost for employees. With the acquisition, LULA hopes to gain a larger share of the market.
Velani Mboweni and Xabiso Nodada founded LULA in 2018. The company currently operates in five cities in South Africa and boasts of completing 700,000 rides for over 380 companies. LULA has over a thousand registered drivers and shuttle fleet operators. However, it does not own the vehicles. Instead, LULA partners with individual drivers and shittle fleet operators to provide the rides for a commission ranging from 20% to 40%.
