Following the recent Middle East Green Initiative talks in Saudi Arabia, we saw the world’s leaders discuss the various issues surrounding the transition to a Net Zero global society, a monumental task – of which we will all play a part – however, making this a localised focus, how do we achieve a Net Zero last-mile transport solution in the UAE? Here’s how…
Let’s pre-frame on the big picture in the UAE, there are 15,000 delivery motorcycles each day in Dubai producing 16,560 tonnes of CO2 each year (destroying 21,000 acres of forest each year), 16-50x more harmful to the environment than SUVs or busses, it’s a big problem we can address very easily.
In a larger sense India has 37 million motorcycles, Pakistan sees 20 million, UK 1.2 million and the last mile sector in the UAE is the dominant form of two-wheeled vehicles buzzing around the city delivering us everything we need. With every convenience in life comes at a cost and this is considerable.
Aside from the harm to our environment – air and noise pollution – we are aware it is incredibly difficult to see profits from the delivery sector for several reasons:
Restauranteurs/Operators: high aggregator commissions, inconsistent service, 3-4% profit margins.
Aggregators: various payment options (fixed cost per delivery AED 10.5, distanced based pay) high operation costs and a multi-tiered vendor supply network.
Delivery riders: increasing fuel costs (which they pay), heightened working pressure, incentives requiring longer working hours and a deductible salary scheme. If you’d like to understand The Real Life of a Delivery Rider in Dubai read here
The last mile can be profitable (which is a priority for all aggregators) however, it can also be a sustainable one – which is something of a ‘voiced want’ from the delivery aggregators, but not a need as it requires a transition in operations, supplier contracts, and without the pressure from the government to implement a mandatory change, the switch will happen, but who will be the first to dominate the last-mile and showcase to their sustainably focused customers they are committed?
How do we achieve a Net Zero last-mile transport solution in the UAE? This is where we as ONE MOTO need to step in and help the industry achieve it. The two main considerations are CapEx vs. OpEx. Most aggregators want an asset light operation and lease the vehicles from suppliers, although better on their cash flow, the P&L suffers.
ONE MOTO offer a solution, let’s run a simulation on 100 delivery motorcycles:
Here’s a question; if you were to ask a delivery rider, “would you like to earn more money each month? Reduce work pressure? Earn bonus’? You can imagine what they’ll say. Then ask your finance/procurement team to increase bottom line, without reducing costs… they’ll look at the cost of delivery and after manpower, transport will be the answer. Do you drive down the fleet operators to reduce monthly lease fees? You can try. Or do you look at an alternative? Lease or purchase direct from the manufacturer saving 74% OpEx?!
The choice to ask the questions is yours.
With the governments looking at their Green Initiatives, how do we achieve a Net Zero last-mile transport solution in the UAE? Make the switch. It allows growth and expansion of your business, without the need to raise capital… furthermore, being sustainably committed will encourage investment.
If you’d like to discuss how to make the switch, talk through simulations of what the future looks like both environmentally and commercially, the ONE MOTO team are read to talk.
Thank you for reading.