Resel Pick Pick ICT Technologies Plc has started selling 1,000 seven-seater metre taxis amidst apprehension over its formation and without getting approval from the City’s Transport Authority. The total cost of the taxis is 600 million Br.
The Company a.k.a Pick Pick Taxi is selling the cars in collaboration with Yokida Consults and Belayab Motors. Pick Pick Taxi, which claims its concept received approval from the Authority, commenced the sale of the vehicles last month and has sold 100 Glory 330 MPV LHD model vehicles, so far. The taxis are Multi-Purpose Vehicles (MPV) and will be assembled by Belayab Motors.
It also claims that it has reached an agreement with United Bank for a loan arrangement to cover 70pc of the cost. The total cost of one taxi is 598,000 Br. The buyer has to pay 198,409 Br upfront. The price was adjusted after the recent 15pc devaluation.
The buyers will pay two percent to Pick Pick Taxi as a service fee, amounting to 11,960 Br.
During the operation, the 70pc loan has to be paid back with interest in four years, according to the Company. But it will start repaying the loan to United after a three-month grace period.
“They have submitted their proposal, and we are reviewing it while opening accounts for their clients,” said Girum Tsegaye, vice president for operations at United. “But we have neither signed a loan agreement nor set an interest rate.”
After finalising the loan agreement with United, the owners will also give legal delegation to Pick Pick for eight years allowing it to operate the taxis on their behalf.
Pick Pick Taxi will process the plates for the taxis, manage their operations and deployment, handle finances, maintain the vehicles and recruit the drivers. The Company will cover the entire operating expenses of the taxis.
Pick Pick was established in 2016 to take part in the ICT service related areas. It is working towards creating projects such as #Genzeb and PickPick Bamboo works. It is also working with Ethio telecom, Ethiopian Electric Utilities (EEU), and United Bank on innovations in telecom and banking technologies, according to its official website.
The owners of the vehicles will earn 7,500 Br monthly from the taxis. But they do not have the right to demand extra earnings and profits from the taxis.
After being operational within five to six months, the taxis will charge 2.15 Br a kilometre as a seat tariff. The vehicles will work in two shifts from early in the morning at 6:00am until midnight and along 200 routes across the city. The company is planning to construct four terminals at Piassa, Megenagna, Gotera and Mexico.
“For the 96 months [eight years] the owners will get 720,000 Br,” said Zenebe Alemu, general manager of the company. “We adopted this system from Dubai and New York.”
The owners cannot withdraw from the deal before the end of the eight years, but if they want to, they will have to pay 198,000 Br by the end of the fourth year, according to the Company.
The taxis will have a 360-degree camera, Global Positioning System (GPS), and seat sensors. And all will be installed by Yokida Consult, that was established in 2014 as a Tech company engaging in software, websites, and technology projects.
The company is also planning to add 500 taxis in the next four years. After eight years, the company will sell the previously purchased 1,000 taxis back to Belayab and replace half of the four-year-old taxis with new ones.
“The existing taxis in the city are old and have deteriorated,” said Zenebe.
Currently, there are around 13,000 minibus taxis in the city, according to Addis Abeba City Transportation Authority. On top of that, there are over 1,000 operational metre taxis.
“We will try to deliver the vehicles within the stated time provided the consignment of the spare parts is shipped in line with the schedule,” said Fekadu Girma, managing director of Belayab Motors, during the announcement of the partnership between the two on October 19, 2017, at Golden Tulip Hotel.
Belayab, a subsidiary of the Belayab Investment Group that comprises of Golden Tulip Addis Abeba, Belayab Cable Manufacturing Plc, Licon Construction Plc and News Construction Materials Manufacturing, will assemble the vehicles at its assembly plant in Adama.
The Company, established a decade ago by three friends with a capital of 10 million Br, plans to assemble 25 taxis a day. Belayab is the exclusive agent of the Chinese Dongfeng Motor Corporation and will get the parts of the taxis from this company.
“Their actual proposal is to establish a share company,” said a source close to the case. “And, there are some dark issues within it, which the Authority is reviewing.”
The concept of the Company has already been accepted by the city transport Authority that has written a support letter to the firm. But its proposal to launch the new system is under review.
Shareholder restriction from demanding profit and loss beyond the monthly fee, participation in the election process of a board of directors and the tariff of the company is currently under review by the Authority, according to this source.
“We were formed as a Plc, and the taxi buyers do not have to participate in the board of directors election,” said Yisfalem Alemayehu, operations manager of the company. “As a business company, we will pay them the monthly revenues after covering all operational expenses of the vehicles.”
Existing meter taxis are charging 10 Br per kilometre. But the new system will cost 2.15 Br a kilometre for an individual with a total fee of 13 Br for six passengers. But the new taxis do not have a service charge, unlike the existing metre taxis which charge additional 50 Br on the total travel expense.
Source - Fortune