Moove rejects claims it worsened vehicle financing for drivers in South Africa

Vehicle financing company, Moove, has refuted claims that it worsened vehicle financing for e-hailing drivers in South Africa. In a chat with Technext, the Managing Director of Moove in South Africa, Maja Smith, insisted that the company was filling a huge financing gap ignored by traditional financial institutions.

Recall that Technext published an interview with the President of the National e-hailing Federation of South Africa (NEFSA), Uhuru Lekgokwane, about racism in vehicle financing.

Asked why e-hailing drivers are not opting for e-hailing-focused financing companies like Moove to bypass the racism, Comrade Lekgokwane claimed that companies like Moove, which he described as “third-party elements”, only made the situation worse.

For example, he said Toyota vehicles, which are given to frivers by Moove for between 12,500 and 16,000 rands monthly, cost about 4,000 to 5,000 rands monthly from traditional banks.

“This defeats the objective of you being in business to begin with. It defeats the objective of economic advancement as a black person. Moove, West Bank, PACE, and the others are literally destroying the economic fortunes of our people,” he said.

Read full story here: A chat with SA e-hailing leader, Uhuru Lekgokwane, about racism in vehicle financing

Comrade Uhuru Lekgokwane, President of NEFSA

In reaction, Maja noted that rental fees range from 2,450 rand for the Suzuki S-Presso, 2,475 rand for the Toyota Agyo and 2,995 rand for the Hyundai weekly. This amounts to between 9,800 and 11,980 rand monthly.

While admitting that this is nearly double what traditional banks offer, she noted that the e-hailing drivers do not take into consideration other critical factors, which the Moove extra fees cover.

“That includes everything that a full maintenance lease would include. So, for as long as the driver has the car, we cover the wear and tear. If a clutch needs replacement, we replace it at our cost. We replace brakes every six months. Wipers, tyres, everything. All of that is included. We will cover all maintenance,” she explained.

She clarified that if the car is brought into the dealership to be repaired, the driver wouldn't be required to remit any fee.

Additionally, when the cars go out of warranty (they typically do within two years because the e-hailing drivers cover many kilometres), the company continues to cover everything with no cost to the driver.

Notably, she added that drivers get full insurance as part of the fee. She noted that if drivers were to get insurance for themselves, it would cost them around 1,500 rand a month. Yet, Moove provides full comprehensive insurance for them.

Listing other benefits that come with the rental, Maja Smith said drivers get 12 days off in a year as a holiday during which they won’t be charged. She also said Moove provides medical insurance for drivers and three dependents as part of the contract.

Maja Smith, MD, Moove South Africa

“Let’s say there’s an engine issue, and the car goes into a dealership, and it takes like 14 days to repair an engine here on average, we will not charge the driver for those two weeks. So the minute a car is off-road, the driver cannot use it as a tool. We will not charge the driver.”

“But if you go to a bank, you still have to pay that every month to the bank. They don’t care whether you’re working or not. They don’t care,” Maja concluded.

Why do many drivers fail with Moove?

For every 166 successful drive-to-own completions, there are several hundred that didn’t make it. Maja Smith chalks it down to several reasons.

One, the job is simply too tough for some. For seasons like winter, when no one goes out, they still need to hustle and pay their dues. They will need to do the same if they got the car from a bank, too.

“They may be required to pay back less, but you would still need to pay back even when the work is drying up. Certain people couldn’t get through that,” she said.

Some drivers have had their contracts terminated because they were driving very dangerously.

Maja said that Moove vehicles have telematic units that enable the company to see how drivers drive; when they overspeed or brake too harshly, etc. This is part of the company’s commitment to keep drivers and their riders safe.

However, drivers who fail to comply with the limits are terminated and have their vehicles reclaimed.

Maja Smith, MD, Moove South Africa

Then, some drivers are simply not able to make the model work for them. Hence, they cannot earn enough to pay back the weekly rental.

“Sometimes you have people who are just not suited to the job. Often, they leave and find other careers. It’s the same thing for drivers. Not everyone is going to make it,” she said.

Noting that the business of e-hailing under a financing model like Moove is not easy, Maja Smith says that does not necessarily mean that what the company is doing is in any way unfair or impossible. Because if it were, the model would not be graduating a thousand drivers at the end of the year.

“We’re trying to give them a tool through which to build a business. Thus far, 166 of them have done it, and 1,000 will have done it by the end of this year. So to me, that proves that this model is a success,” she finished.

The post Moove rejects claims it worsened vehicle financing for drivers in South Africa first appeared on Technext.