When COVID-19 shut down the world, e-commerce delivery services boomed. Locally, motorcycle delivery services like Uber Eats, Mr D Food, and Checkers Sixty60 were flung into an unprecedented growth trajectory.
The online food market in South Africa is projected to reach US$2.40 billion in 2024. The biggest international player, China, is expected to reach a value of US$448.90 billion.
With so much potential, running a motorcycle delivery service in South Africa seems to be bursting with opportunities. But as with any business undertaking, there are many challenges to overcome.
Before discussing the opportunities or challenges, let’s list what you’ll need to start a motorcycle delivery service.
What You Need To Start A Motorcycle Delivery Service in South Africa
You must purchase reliable vehicles when starting a motorcycle delivery business in South Africa. Buying these vehicles will be most of the work required.
Something else to consider is the contamination of your foods by top boxes that do not seal correctly. SAFA are looking at regulating the top boxes for food delivery to reduce contamination resulting from fumes, silicates and dust in the air.
Depending on the scale you want to enter the market, you can start by signing up as a freelance delivery rider for the larger players to establish your service.
It may seem surprising, but there are no business requirements when establishing a motorcycle delivery service. Unlike establishing a restaurant, bakery, or liquor store, no licenses are needed to run the business.
Licenses and registrations are required for vehicles and drivers, and delivery businesses that hire drivers as permanent staff should apply for an insurance policy to cover accident damage and injuries.
As a business owner, you must register the business properly. Your drivers will need a smartphone with GPS capabilities for the day-to-day running of the business.
And if you have a registered business, you can apply for fuel subsidies.
Now that we’ve covered what you need to start a motorcycle delivery service in South Africa, let’s discuss the challenges.
The Challenges of Running a Motorcycle Delivery Service in South Africa
While setting up a motorcycle delivery service is fairly straightforward, some challenges must still be overcome.
Namely:
Safety and Security Concerns:
South Africa has high crime rates. In the last quarter of 2023, the South African Police Service (SAPS) revealed there were 5,973 carjackings nationally.
Ensuring that your delivery riders are safe is important, and it is best to keep them out of high-crime areas to avoid being hijacked or assaulted.
Infrastructure and Road Conditions
Not a day goes by without South Africans talking about the condition of their roads. While most metropolitan centers have relatively good infrastructure, rural areas often have poorly maintained roads.
Bad road conditions can be incredibly dangerous for riders, especially if they hit an obstacle at speed. Also, poor infrastructure can damage your vehicles.
Ensure your motorcycle’s headlights work well to ensure riders can spot potential issues and avoid problems altogether. Also, inform riders of potential dangers by providing information about problem areas. The AA offers a free road condition service, which you can review.
But after some time, most riders will become aware of these road condition issues.
It’s important to remember that weather conditions will hamper your fleet’s ability to deliver food. And with some of the wild weather events that have occurred around the country in the last few years, riding in them can be extremely dangerous.
Regulatory Environment and Insurance Costs
As we mentioned, you will need to adhere to transportation regulations. While it can be overwhelming and time-consuming to ensure your fleet is registered properly, there are multiple fleet management software solutions that will remind owners when vehicles are due for servicing and license renewals.
Another problem is that motorcycle delivery services are a high-risk career choice. Insurance premiums for motorcycles are generally more expensive than cars, and to insure a delivery person will be expensive.
Competition
We’ve already highlighted the competitors in the domestic delivery services market. All of these players have dominated the space and made it incredibly competitive.
This being said, there is enough of a potential market for you to fill a niche. And Statista suggests that the South African market could reach 23.2 million users by 2028.
Now that we’ve discussed the challenges, let’s investigate the opportunities.
The Opportunities of Running a Motorcycle Delivery Service in South Africa
There are several significant challenges in launching a motorcycle delivery service in South Africa, but if you leverage your opportunities correctly, you could be starting a profitable business.
The opportunities that you will need to leverage are the following:
Growing eCommerce Sector
In 2022, nearly 80% of South Africans used the internet, with roughly 27 million e-commerce users.
In this rapidly expanding market, there will be a growth in demand for reliable delivery services. Also, with this development comes the possibility to specialise in delivery needs.
Whether you form a delivery service for a certain item, focus on a certain rural area, or invest in a technology to differentiate yourself, there’s enough room for your business in the growing e-commerce sector.
For example, FNB Merchant Services highlighted the potential use of EVs (electric vehicles) for delivering services.
Flexible Employment
The total number of unemployed South African youth stands at 46.5% compared to the overall rate of 32.9%.
Finding work is extremely tough for everyone at the moment. But with a growing delivery sector, many can now find employment as a rider.
Riders are estimated to earn as much as R98.94 an hour, far above the minimum rate of R25.42 an hour.
People Are Still Moving To The Cities
Don’t let the headlines of Zoom Towns (villages filled with remote workers) fool you. South Africans are still moving into urban areas. In 2022, 68.34% of South Africans lived in urban areas or cities, the highest on the continent.
Most city dwellers don’t want to leave their homes in the evenings for various reasons. In cities like Cape Town, where residents park on the street, losing your parking spot is a big issue, as is paying for parking if you do go out.
Technology Is Evolving
20 years ago, the idea of having a smart device would have seemed far-fetched. Uber is only 14 years old, with it’s UberEats service introduced nine years ago. Since then, a lot has changed.
With this rapid development, the next disruptive technology revolution could have already started somewhere around the globe.
Environmental Benefits
And as EVs could revolutionise the motorcycle delivery service in South Africa, even with our ongoing electricity crisis, charging EVs via solar power is possible.
Running EVs is also far better for the environment, and using electric motorcycles could give your company a competitive edge. Or you could even use electric bicycles (e-bikes).
E-bikes are way more efficient in using stored power when compared to other EVs – in some cases, 20 to 35 times betterand are 20 times better at fighting climate change compared to electric cars.
Now that we’ve gone through the challenges and opportunities of running a motorcycle delivery service, if you’re looking to ensure the current fleet of motorcycles starts first time, you can find your local SABAT battery vendor here.
In addition, if you need motorcycle parts and accessories, you can contact AutoCycle Centre, which specialises in providing motorbike helmets, wheels and tyres, and other bike parts and accessories.
