An Interview with Tinashe Ruzane: Powering The First Electric Motorcycle Subscription in Mexico
This article was first published on Untapped Global
FlexClub, a marketplace for vehicle subscriptions, announced that it has partnered with Untapped Global, a pioneer of Smart Asset Financing™ in emerging markets, and ITALIKA, Mexico’s leading motorcycle manufacturing brand, to offer electric vehicle subscriptions to on-demand workers in Mexico.
The partnership will make over 2,000 vehicles — including 1,000 electric motorcycles — significantly more accessible to workers using on-demand platforms like Uber, Rappi, Didi, and others to earn income.
I sat down for an interview with Tinashe Ruzane, CEO and co-founder at FlexClub, to learn more about their goal to revolutionize automotive retail in emerging markets, and discuss their recent partnership with Untapped Global.
Where did the original idea for FlexClub start?
We launched FlexClub in 2019 in South Africa. Prior to that, I spent four years leading vehicle solutions across EMEA at Uber. While at Uber, it became clear that there was an opportunity for a business like FlexClub to design a technology-enabled value chain for the future of automotive retail. My experience leading the team at Uber focused mainly on supporting car manufacturers, leasing companies, banks and car rental companies with designing products that increase access to cars for Uber’s ride-sharing drivers. It was in this role that I became acutely aware of the shortcomings of the old automotive value chain and how it made vehicles less accessible. So we started FlexClub to build a product that could solve that.
We are pioneering flexible commerce, making it possible for people to shop for vehicles, from motorcycles to passenger cars, on a flexible basis without needing to take on traditional debt commitments to have access to those vehicles. Historically, traditional debt has been the primary driver of new vehicle sales all over the world. We are ushering in flexible commerce to offer a fresh alternative, while leveraging technology to manage the risks associated with subscriptions, and feed richer data back to financiers, like Untapped Global to improve their view of how the risk evolves over time.
What problems does FlexClub aim to address in emerging markets?
The first key challenge presented by vehicle financing in emerging markets is its limited reach. The core design for vehicle financing hasn’t changed much since the birth of the car loan over 100 years ago when General Motors created GMAC in 1919. Today car loans continue to exclude millions of customers from shopping for vehicles. Subscriptions offer a significantly more accessible alternative, with their design being a hybrid between a long-term lease and a short-term rental — combining the flexibility of short-term rentals with pricing much closer to long-term leases.
The second challenge is the convenience and simplicity of traditional auto retail. It’s far simpler to ‘subscribe’ for a vehicle than to go through the process of financing one and then having to purchase insurance and maintenance separately. And what happens if you decide to change the vehicle before the loan is paid off? With traditional vehicle financing, the customer will be in negative equity, owing the bank more than what the car is worth. With a subscription, one can completely avoid the burden and complexity that comes with the old vehicle buying experience.
We think subscriptions are a superior product for the majority of people in markets like Mexico and South Africa, making for a much simpler shopping experience entirely online.
Please tell us about FlexClub’s recent partnership with Untapped Global.
Our partnership with Untapped Global is incredibly exciting, as they are the first asset financier in the world to power the very first electric motorcycle subscription in Mexico! I think this is a massive milestone, not just for us but for the entire ecosystem in Latin America, starting with Mexico.
By bringing together Untapped’s Smart Asset Financing model with the great vehicle quality of ITALIKA, the largest manufacturer of motorcycles in Mexico, on the FlexClub platform, built to help partners easily develop and run subscriptions, we’re building an exciting new model for mobility that can be replicated in several more emerging markets, like those on the African continent.
What makes Smart Asset Financing a good fit for powering vehicle subscriptions?
The beauty of Smart Asset Financing is that it’s agile capital, flexible in its structure. It’s a major innovation from Untapped Global, and a huge benefit to fast-moving startups like ours that are rethinking how asset financing should work.
A lot of people might immediately assume that electric vehicles are more expensive and inaccessible but thanks to the flexibility of Smart Asset Financing, we’re able to offer electric motorcycles on subscription at the same cost per week as a petrol motorcycle subscription. We’re really excited about the opportunity to extend this approach to other types of vehicles across other territories in the near future.
We think this model has the potential to positively impact millions that are working in the gig economy, using on-demand platforms such as Uber to earn a living. Currently, over 5 million people across the globe use the Uber app every single week to earn a living. Anyone that can make it easier for them to keep more money in their pockets by improving the cost of accessing vehicles, will undoubtedly create an immense economic impact! Every dollar saved is a dollar earned.
What would you say is the potential for EVs and vehicle subscriptions around the world?
Electric vehicles are the future of mobility, so the potential and opportunity is huge. In addition, major brands, from manufacturers to mobility platforms, have made strong commitments to sustainability as core to their strategies. So it’s apparent that this is the future both for the benefit of the planet and the earnings of those using electric vehicles to earn income.
As far as subscriptions go, we’re not the only ones beating the drum about their potential to upend the old model of automotive retail. The entire auto industry recognizes that this is the future of their revenue base. A good case study here is Volvo. In the previous month, 15% of their sales in the United Kingdom came from subscriptions. Interestingly, over 50% of those subscriptions were for electric vehicles, and 91% of all subscribers were new to the Volvo brand. It’s clear that the combination of electric vehicles and vehicle subscriptions represent an incredible transformation in how consumers will think about mobility. First, it proves the narrative that subscriptions expand the addressable market for vehicle manufacturers. Secondly, they demonstrate the viability of this as a better financing structure for electric vehicles. And third, subscriptions create a far simpler shopping experience than the old auto retail model reliant on traditional debt.
This is why we think this partnership with Untapped Global & ITALIKA is set to be a catalyst for a marked shift in the auto industry in Mexico and beyond. We couldn’t be more excited about this opportunity to bring the future forward.
