It was just one year ago that Farrukh Atamuradov and Alexei Filippov became serious about transforming the transport options for Dubai residents. While the cosmopolitan city is known for its high-technology metro and tram, as well as fleet of modern buses and taxis, the entrepreneurs believe Dubai needed something more to make it truly multimodal.

The answer lay in solving the city’s first mile/last mile problem, said Atamuradov, who along with Filippov, set up Urban Solutions, a company that provides alternative personal electric vehicles (PEV’s) like e-bikes and electric scooters to cover distances that are too close to drive, but too far to walk.

Inspired by the popularity of electric scooters in cities like Barcelona and Singapore, the duo brought the concept to Dubai where such services are needed.

“The idea was quite simple: to help residents here complete their first and last mile. Initially, the business was meant to be a one-stop shop for all electric scooter needs, via an e-commerce platform,” explained Filippov. “But the idea was also to provide businesses with different mobility options than those that already existed, such as golf cars and Segways. Residents of Dubai and, to a similar extent Abu Dhabi, needed our products/service to help them move around their neighborhoods in a safe, fast and convenient way.”

Seeing a gap in the market, the duo bounced ideas throughout the summer of 2016, drafted a business plan and set up the company in October of the same year.

“We had experience in sales, marketing and e-commerce but nothing related to the first and last mile solution,” said Atamuradov. “It’s an absolutely different story. As an entrepreneur, your decisions can make or crush you. The pressure is higher than any job you can get, but I think the experience one gains is absolutely vital, irrespective of the result.”

Rough ride

The journey so far has not been without its ups and downs. Financing was the biggest challenge Urban Solutions had to face. The seed capital for the business came from the founders’ savings and financial contributions from friends.

Raising their own capital was necessary, as the business partners found it difficult, in the beginning, to get funding from institutional lenders. Coupled with this was the lack of infrastructure for cyclists and pedestrian, which also hampers their expansion plans.

“The authorities are making efforts to rectify this issue, but not all areas have been thought through for other methods of transportation than automobiles. It made some journeys for our prospective customers unsafe at times. However, the positive trend has been witnessed across Media City, which is now almost completely cycle friendly,” said a hopeful Atamuradov.

The changing market conditions are supporting the business. Today, people are more cautious about the money they spend and this has pushed up demand for electric scooters.

“Using a taxi daily or owning a car is not feasible or ideal for many residents, making them our potential clients as our products are good value for money. Besides this, people are more environmentally conscious, going for greener options such as ours,” he added.

Surprisingly, UAE’s desert climate had not been an impediment for Urban Solutions.

“We expected the Arabian summer to negatively impact our line of business. However, it resulted in steady demand for both rental and sales,” said Filippov. “Residents who are used to walking their last mile, opted for a swifter and a more wallet-friendly means of getting from point A to B. Scooters are perfect for this. We saved time for operation staff of leading districts by helping them complete their daily jobs faster, leading to greater customer satisfaction.”

He added that their analysis shows that the company generates least interest during rare rainy days.

“Cloud-seeding during late February and early March affect our sales negatively. Barring these two months, there is steady demand throughout the year, with some significant spikes in May/June, when it started to get unbearably hot to walk,” elaborated Filippov.

Learning as they go

The main areas for Urban Solutions are densely populated districts with developed pedestrian infrastructure, such as Jumeirah Lake Towers, Dubai Marina, The Greens, Downtown Dubai, and Business Bay. The demand is also high from gated communities in Abu Dhabi.

The founders see themselves as market makers, well poised to become leaders in this segment, if they do things the right way. Their company has tied up with Airbnb to push business further.

In the future, they plan to open a physical outlet in Dubai and Abu Dhabi, which will double as a maintenance workshop and accessories shop. They also aim to establish kiosks, offering electric scooter tours of popular destinations, such as Marina and Jumeirah.

However, in hindsight, the duo believes they could have done things differently to make the journey more rewarding.

“If we had a chance to start over, we would offer more price diversification to achieve better results. We simply lacked data then and it was hard to estimate a possible price range to follow. With lack of competitors, there was no ballpark to fall back on,” said Atamuradov.

“In our first months of operation, business was slow. We started panicking and overspent on marketing. This was done without any deep analysis and lack of proper data. We then redesigned and relaunched our website and created local content for SME ads, which showed amazing results. For any start-up, it is crucial to stop constantly, evaluate your marketing strategy and be brave to adopt a plan B,” he highlighted.

As young entrepreneurs, both subscribe to the philosophy that customer satisfaction must be the foundation of any business.

“As cliché as it sounds, client satisfaction was and will continue to be our number one priority. It’s a vital part of the business equation, but often gets overlooked. We treat our clients the same way we wish to be treated,” affirmed Filippov.

© Accelerate SME 2017