The Colombian ride-hailing platform Picap was born in 2016 as an “Uber of motorcycles.” In December 2019, the app was soaring: 2 million rides and nearly a million dollars of net revenue monthly, with a fleet of 15,000 active drivers monthly and operations in Colombia, Argentina, Mexico, Peru, and Brazil.
And then, poof. It vanished. The startup lived a nightmare in 2020. It laid off nearly a half of its 300 employees in May last year and saw its net revenue dropped to almost zero. This happened not only due to the COVID-19 pandemic, which has been creating havoc for ride-hailing companies, but also because the Colombian government considered Picap’s operations illegal, mainly due to safety concerns over motorbike taxis.
And it wasn’t just in Colombia. Picap also faced lawsuits in Brazil for the prohibition of motorcycle taxi service in São Paulo. But in September 2019, the São Paulo Court of Justice concluded that the service can operate according to a 2009 federal law and that the city can define rules to oversee ride-hailing operations with motorbikes.
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The entire legal imbroglio of transporting people led the startup to develop a second business vertical: Pibox, a parcel and courier delivery division of Picap, with operations in Mexico, Brazil, Paraguay, Guatemala, and Colombia. Pibox works on the same app as Picap but is focused on logistics, with a business model similar to what Loggi does, and has grown eight times since 2020. It does the logistics process from middle-mile, last-mile to cross-docking, and warehouses as a service. In its B2B2C model, it has partnered up with enterprises such as Amazon, Mercado Libre, Grupo Salinas, and Falabella.
Picap recently launched its new Pibox Enterprise service, a tool to route company couriers and provide traceability of shipments to customers in the last mile. It works as a cloud service for Mexico and Colombia.
LABS reached out to Daniel Rodríguez, co-founder and CEO of Picap, to talk about the legality of the motorcycle transport service, operation with electric motorcycles, and business perspective in Latin America:
LABS – Why did you create Picap?
Daniel Rodríguez – Picap started two years and a half ago. I live in Bogota with Picap’s co-founder Hector [Neira Duque]. Bogotá is claimed to be the city to have the worst traffic jams worldwide. According to statistics, people are losing a month inside a car because of traffic jams.
I’m an engineer, and I love to solve problems. I remembered that three years ago, I used to ask the company’s delivery guy that I was working on to give me a ride in his motorbike when I was in a rush, and I realized I was saving almost half of the time that I would spend using a car. That’s the reason why we decided to launch Picap. It was born as a ride-hailing platform, but instead of using cars, we decided to use motorbikes.
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After two years of launching Picap, we were doing 2 million rides and having about a million dollars of net revenue monthly. We had one of the largest fleets in LatAm, with 15,000 active drivers monthly. We realized that the drivers were using Picap to do things like afford the college or pay rent, and when we realized that, we got really passionate about it. We are all the time asking ourselves how we can add more value to those drivers and how they can get more revenue. That’s the reason why we have been testing other kinds of verticals; one of them is the logistics vertical.
You had to shut operations in Colombia. How has been Picap’s dialogue with governments?
We have been living in some regulatory hallows, especially in Colombia. About a year and a half ago, the Colombian government decided to liquidate our Colombia-based company. They also decided to ban Uber completely. But we never really left the country. We decided to change the [business] model to what we are doing now, to rent a vehicle with a driver (which is the legal format of what we do today).
We are in a group with other ride-hailing apps because we are talking together with the [Colombian] government, and the government is listening to us now. We have the first draft of the regulation; at the end of this year or the beginning of the next year, it [the activity] will be regulated.
Colombia is the hardest country [for regulation]. If we achieve something in Colombia, the rest would be easier. For instance, the service that we are providing in motorbikes is legal in Brazil and Mexico. If the government starts to regulate, it would be better (…). They will be able to ask what kind of helmet we should use and charge taxes, which they are not doing today.
Did you lay off people during this time?
The net revenue dropped to almost zero [in 2020]. We had to let some people go. At that time, we had around 300, and we ended up with half of that. But right now, we are a strong company, almost the same we were before the pandemic. Even though we have less net revenue than before the pandemic, we are more efficient today because we were burning money before. Today, we are cleverly putting money into our banking account.
Are you looking to fundraising now?
We are not looking for any investment round right now. Today, the company generates revenues, and we are using it to do more research and development, to grow faster.
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The transport of people’s services was affected by the pandemic in Latin America, where quarantines were strong. The good thing is that we have new verticals like Pibox that allowed us to continue growing. The transport is coming back since cities are reopening. Yet, we have to give more time for the numbers to recover. In total, we have raised $6 million from Silicon Valley, and maybe, in six months, it will be a good time to fundraise again.
How does Pibox work?
The drivers started to move not only people but also packages. That logistics vertical we decided to call Pibox. Last year, Pibox grew eight times. Currently, Pibox has been delivering around 400,000 packages per month.
It started as a last-mile service until we realized that SMBs were using our solution to their business, so we quickly evolved to build a B2B2C solution. We started not only to do the last mile but to do all the things in logistics.
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One of our firsts last-mile clients in Colombia was Linio (an e-commerce website). Their business is a marketplace, they have many sellers, a lot of clients, and it was not easy to deliver 20 packages to 20 different drivers on the same day. So what we decided to do was to send a small truck to pick up everything once a day or once a week. We send all the packages to our warehouses, and in our warehouses, we do cross-docking.
So, at Pibox, we are not only doing the last mile but also the middle-mile [logistic service], in addition to cross-docking and warehouses as a service. We started in Colombia, but we are expanding to Mexico, Brazil, Paraguay, and Guatemala. We are working for the largest clients in those countries, such as Amazon and Mercado Libre, Grupo Salinas in Mexico, and Falabella in Colombia.
It is the same app as Picap, but we have built other pieces of software according to the type of client we are serving. We evolved to a B2B2C service. (…) We are working with other kinds of clients like Mercado Libre, who need help from other companies like us. We are more similar to Loggi, but Loggi is very strong in Brazil. We are more focused on other countries; there’s a huge opportunity in the other countries in Latin America.
How is Pibox committed to sustainable transport?
We have one of the worst congested cities globally, and in the same way, we have cities like Medellín that are very polluted. I care about that (…), and we know that the future will be electric. We want to hold on to that, not only to help but also to go gear.
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The logistics market in LatAm (outside Brazil) is big; it is a trillion-dollar market. But in the coming years, we will see a consolidation of it, and something similar will happen with electric [iniatives]. We launched a fleet of 100 e-motorbikes in LatAm; they are working with our B2B clients. We are running tests with that fleet, looking at expanding this for heavy cargo trucks.
What is Picap’s main goal for 2021?
To grow faster. One of our competitive advantages is that we have people and business transport [operations]. We don’t have a rival in that space. Since we are focusing on B2B2C, we are aiming for more enterprises; we are working to serve 4,000 enterprises by the end of 2021.
*Updated: The first version of the text said Picap had 3,000 employees but it had 300