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KasiD challenges Uber Eats, Mr D in ‘unsafe’ townships

Admire Moyo
By Admire Moyo, ITWeb's news editor.
Johannesburg, 14 Oct 2022

Recently-launched food delivery app KasiD is looking to take on Mr D and Uber Eats in South African townships.

Founded by Freddy Mahhumane amid the COVID-19 pandemic, KasiD wants to exploit a market that the incumbents shun, usually citing safety concerns.

Last month, Uber Eats announced: “It is with great disappointment that starting 5 September 2022, Uber Eats deliveries in some areas of Soweto will not be available due to the safety risks that continue to threaten the businesses of delivery people.”

However, Mahhumane believes his understanding of the township economy gives him an advantage to operate in the neglected areas.

Food couriers in the country have been sceptical about penetrating the township market, not only because of safety concerns but also because of low demand.

Uber Eats, a unit of US ride-hailing service Uber Technologies, launched in South Africa in 2016. Originally known as Mr Delivery, the South African food delivery business was founded in Cape Town in 1992 and was fully acquired by Naspers-owned in 2014.

Since 2015, the company has undergone a complete digital makeover and rebranded as Mr D.

Feeding the underserved

Currently, KasiD operates in Tembisa, Midrand, Kempton Park, Ivory Park, Kloorkop and Kaalfontein, and it is looking to expand to “most if not all townships in South Africa,” says Mahhumane.

“The food delivery industry is continuously evolving, and the market has seen expansion since the COVID-19 pandemic,” he tells ITWeb.

“I wanted to serve the underserved and uplift the township economy. That talks to ensuring that I uplift the township economy and empower the youth and small businesses such as restaurants.”

He adds that KasiD has more than 40 local township restaurants, such as Chuff Pozi, Solid Liquid Eatery and Kwamajola, to name a few.

“We also have large chain fast food restaurants, such as Chicken Licken, McDonald’s and Nando’s. Reliability and convenience underpin the existence of this service, and the use of the service relies on the customer’s geographical location and their digital literacy.

“Although South Africa has the fastest-growing townships and developments within townships, not all food delivery services can meet the demand of this untapped economy, which saw the birth of a business opportunity for KasiD.

“The initial launch was focused on Tembisa with 10 motorbikes, and through consumer demand and investor interest, we currently have 15 motorbikes.

“We are expanding to Mamelodi and Siyabuswa before the year-end. To date, KasiD has successfully delivered more than 1 500 orders, with a total revenue of more than R250 000 in less than three months.”

He explains the KasiD order lifecycle starts when the customer browses restaurants and places an order on the KasiD consumer app. The customer then selects their payment method and pays for the order if they have chosen digital payment.

The restaurant receives and accepts the order on the restaurant app, and proceeds to prepare the order and hand it to the allocated driver when the order is ready.

The driver, using the KasiD driver app, is then routed to the delivery address, where the customer will receive their order and pay for it if the payment method was cash. The customer is left to enjoy their meal and provide a detailed review of their meal and driver at their leisure.

“The remuneration structure of KasiD drivers is above industry standard, with KasiD paying drivers salaries every month and the drivers earn commission and tips over and above,” Mahhumane says.

“With a business model that not only benefits KasiD, proceeds from every order made on KasiD are provided to restaurants, over and above the order amount. Customers earn loyalty points for every order that is above R100, and when the points accumulate, the customer can use the points to pay for new orders on KasiD.”

Broader mission

According to Mahhumane, the value proposition of KasiD is to benefit the entire KasiD network and not only the business itself.

“KasiD continues to seek avenues to realise value within the communities it operates in.”

He notes the driver app is restricted to authorised KasiD drivers, and is the single source of truth for the driver to manage the order lifecycle.

On the challenges he faced, Mahhumane says: “We had to bridge the digital divide in the townships by educating both the customer and restaurants on the benefits of the apps. Securing local skilled drivers − male and female − was also not easy.

“KasiD’s mission is to improve and invest in the township economy and to create employment for the youth. With less red tape, the organisation is able to hire drivers and work with most township restaurants, giving them access to a larger pool of customers,” he concludes.