Zarif Haque and Federico Ranero on Moving Vehicles in a Developing Market

May 30, 2023
Zarif Haque, Founder/CEO of DRAIVER, and Federico Ranero, COO of Kavak
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Zarif Haque, Founder/CEO of DRAIVER, and Federico Ranero, COO of Kavak

Key Takeaways:

  1. Draiver is a platform that focuses on moving vehicles quickly and efficiently.
  2. Kavak is the largest used car market platform in developing markets.
  3. In developing markets, access to vehicles is a significant challenge, and solving this problem can lead to life-changing opportunities for individuals.
  4. Moving vehicles in different countries presents unique challenges, such as security issues and logistical complexities.
  5. The partnership between Draiver and Kavak has allowed them to learn from each other and tackle the vehicle movement challenge together.
  6. Draiver's technology is designed to be universal and scalable across different markets.
  7. Kavak's mission is to empower people to drive further and improve their mobility and financial opportunities.

During Automotive Retail USA 2023 in Las Vegas, Paul J Daly and Kyle Mountsier interviewed dealers, OEM representatives, industry partners and more, looking to make the most innovative voices in retail automotive louder.

This is Amplify, the retail automotive podcast by Reuters Events and ASOTU.

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Paul Daly: 0:00All right, today we're here with Zarif Haque founder and CEO of Draiver and Federico Ranero, COO of Kavak.

Unknown: 0:07

This is Amplify, a retail automotive podcast brought to you by Reuters events and ASOTU. It's time to make the most innovative voices in retail automotive louder.

Paul Daly: 0:24

Gentlemen, thanks for joining us today and

Kyle Mountsier: 0:26

Man, our first two guest podcast. 4 person podcasts. Whoa, how we gonna get all this in? Y'all better talk fast. Yeah. And then everybody's gonna put it on 1.75 speed when they listen and be like,

Zarif Haque: 0:40

you know,fortunately, speaking slowly is not one of my virtues. So we're going to speak very fast. Don't put it a 1.5.

Paul Daly: 0:46

Okay. We'll see.We'll see how we do. I'm so sorry. We have just met but a little bit of familiarity with a company Draiver, why don't you just give us a quick little background? You're the founder.So you had the idea. And you implement it? And here we are,yeah, to the Amplify podcast.

Zarif Haque: 1:03

All right. Thank you for thank you for having us.Yeah, Draiver is a platform to move vehicles as fast as anyone in the world to be very honest.And countries. We're moving over6000 units per day, getting close to over 2 million units per year. And it's been an exciting venture for us. Car movement has always been something that's been really not sexy. It's kind of the plumbing of the industry, to be honest.But you know what, you have to have the cars in the right place at the right time to be able to make money and we do it very well. And we do it very quickly.And we've had the opportunity to expand into Mexico partner with Kavak as well. Learned a lot with them too. And so it's been a pretty awesome journey.

Paul Daly: 1:50

So let's talk about Kavak for a second. When we were teeing up here, this is the first unicorn in Mexico.

Federico Ranero: 1:57

Yeah, that's right. We're starting 2016 in Mexico. Today we're presenting10 countries, 27 cities. We're the largest used car market platform in developing markets.We actually like markets where there's tons of frictions,right, from information asymmetries to bigger issues like fraud and safety, financing constraints, and we're looking to solve all that for the customer.

Paul Daly: 2:21

You say you like markets like that? Yeah. Because it's a challenge.

Federico Ranero: 2:24

And we like the challenge that we like changing people's sights, or as their mission says, We want to empower people to drive further. And we understand the asset as one that could actually change your life,from a mobility perspective,from a financial perspective.And we're looking to solve all that for our customers. Oh,

Kyle Mountsier: 2:42

this guy, done it just now. I'm sorry. Over here. Sorry. Hey, it's all have a conversation, right? Yeah. Oh,he's just like, first of all,aligned, Mission aligned vision.I love that. And this is something that I think in,especially US markets, we don't go back. And remember, the the change that happened, like, we just think about selling servicing, getting cars in the right place, moving fast. And owning a vehicle is is just a rite of passage into adulthood.But what you're saying is in these developing markets, and in these places, getting vehicles to someone is like, literally an opportunity for life change. And what's interesting is, that's not all all different in an American context, either. No,it's just we don't associate it anymore. But it's like, yeah, if you don't have a car, can't get to work. If you don't have a car, like all of these opportunities open up, and I love that, like a marketplace and availability for vehicles is bringing that to the consumer side.

Federico Ranero: 3:53

Yeah, I couldn't agree more with you actually, to give some perspective of how I figured this was a big problem and an opportunity as well, in the way you mentioned it is. In my previous life, I was general manager of Uber in Mexico. It was the third largest market worldwide. But I could summarize that my number one business constraint was vehicle access.So we have tons of demand, tons of supply of driver drivers, but not a vehicle. So meaning a lot of people want to self employed themselves, but they couldn't because there were so many prohibitive barriers in the way that didn't allow them to get this work too. So, you know, I became really obsessed with the problem and decided to come and solve it with Carl Icahn in the10 markets where we operate from Mexico, Brazil to Turkey and the Middle East.

Zarif Haque: 4:38

And we honestly take it for granted here. Right credits readily available. car dealerships are everywhere. And we can actually trust we buy from alright. That's a luxury in many other countries. Yeah,that's where you know, I think when I was speaking to Kavak that's the first few things you know, that's it really stuck out to me. Yeah, they're doing it.Well.

Kyle Mountsier: 5:02

That's amazing.So an n the, like you said the plumbing to that. You just said like just access to vehicles.And so there's plumbing to that too, just moving vehicles around getting those in the right places, making sure that people can have access to that we, we take for granted like a really competent highway system.Alright, I'm sure that's something that you said you're in, what six countries, right,and then nine, and then Kavak Santa like that. That one piece alone, I can't imagine in some countries that are less developed them than the US is probably a challenge that you've had to meet.

Zarif Haque: 5:37

And I mean, it's it's even wilder, we, when we started piloting with Kavak, you know, we started learning about security issues, things that we never think about carving pulled over while a driver's moving it,and then they're taking off the wheels, and it's stuff and it's just like, You know what, but we have something that it's not going to be bulletproof, right?It's not the silver bullet,maybe. But we can get you really darn close to making sure that,you know, your your assets will be safe, and they'll get to where they need to be.

Kyle Mountsier: 6:10

So what how are you taking some of those learnings? Because you are in multiple countries at this point? How are you taking learnings across borders and going, Oh, we had to solve for this here, that maybe give an example of like, if we had we because we had to solve it over here, it also gave another country or another company or another organization, the ability to do the same thing.And that was good for their and end goal.

Zarif Haque: 6:36

I mean, for us, it was it's a relatively universal problem. But there's like,little nuances that we learn about, like what I just told you. But it's been, it has been really easy with our partnership with Kavak, because they've kind of been the trailblazer. And they've also been our primary customer in going into all these, you know, new areas. And so we have a partner that we can rely on that we can trust, and that we can learn from while we do it. But you know, honestly,it's it's a very universal problem. And our technology was built in a way to be universal everywhere. And they were able to prove it.

Paul Daly: 7:11

Let's talk about the nature of the partnership, the best partnerships, everybody learns from the other person. So when asked each of you, what are some of the things that you've learned, since you've embarked on the partnership and you know,started to integrate your systems and, and do business together?

Federico Ranero: 7:26

Actually, you know, I learned that human nature pushes you to be so arrogant to think that you can solve these things on your own.But the reality was, and I thought I knew a thing or two about tech and logistics coming from Uber is that moving vehicles is something else, man,when you have to move your mode of transportation, then you need a totally different logic to move the drivers in a different sequence in an orchestration than you do the vehicle themselves. You need very specific processes before,during and after every movement to do each delivery, as opposed to moving people or burgers around, right. So we quickly these guys pinged me probably six or seven times I said no. I said we're gonna build it.

Paul Daly: 8:11

And we can do this,we're gonna need your help.Yeah, whoever you are,

Federico Ranero: 8:16

he wanted to charge me, whatever for a pilot that I refused money. Exactly.It wasn't so much it was it was not price for Mexican standards.Then we came to an agreement and when we tried to literally doubled our productivity overnight. So that was the moment where your library per day to over four vehicles more for per driver per day, that was just a software piece, right?Then we figure well, these guys are for real. And we can turn you know, a headache into a real value added activity. When we have been building on top some of the things Draiver has built some of the things that we have built like data models and ability to collect proper trade data, during the vehicle movements per se, to for example, complement initial diagnostic of the vehicle, or to make sure that the vehicle is in the Kavak standard to be ready to be delivered for a customer etc. And by doing that, we've even been able to enable much more use cases for customers to simply allow them to push a button and get a service on demand at home. Either an inspection be that a maintenance pick up and drop off, be there a trade up or a trade down?Because we understand customers have life events. And we want to be there to help them at the push of the button to support them throughout their mobility or economic needs.

Paul Daly: 9:39

All right, same same question from the other surgery.What What have you learned since the partnership

Zarif Haque: 9:44

man I have been in the car business for over 25years. And I this company was built and designed for my own personal problems when I was operating. But when I went to Mexico and saw these operations,it was eye opening. I mean this He's probably going to date me,but there was an old school movie called gung ho. Right? I don't know, if you're and I remember, okay, well, it was a game changer for that movie.Well, this was a game changer for me, I go into these facilities that are moving like they're repairing end to end,over 4000 units per month in one of many facilities. And so I immediately knew that they needed help with us, it was like a hand in glove fit. But when we, it was nice working with them, because they were able to look at the industry in a different way, like you said,you know, we we take things for granted, we don't want to disrupt, you know, we talk about a lot of some, you know,familiar subjects, right. And

Kyle Mountsier: 10:41

we got all of our acronyms down, or awful,

Zarif Haque: 10:45

but the but they have, they have absolutely said,Look, we're not from the car business, but we were the consumer, and we know what it feels like. And let's build a business around that. And in the meantime, with our need, you know, we had life changing needs or things that needed to be the impetus to change our lives. So let's better society in the process. And the way they're doing it is magical. I mean,it's, it's amazing in what they can scale it, they're able to provide credit to people that would never have a chance or opportunity that have in their default rates are, like absolutely close to zero, right.So, I mean, it's just, it's,it's an amazing story, that, you know, we were able to partner with them, but they, they helped me look at the industry in a different way. And I think you're gonna see that a lot of that type of stuff will be coming here. As you start seeing consolidation of dealerships,you start seeing larger repair facilities, recon centers that you're already seeing, but in a way that will become a hub and spoke. And, you know, that's where we also feel like we'll be able to help them play here.

Kyle Mountsier: 11:50

Yeah, that's a big deal. No, I love I love that you just said Hub and Spoke because we talk about this a lot where the dealership actually has this ability to play just such, it already plays a central model in our culture and community. But as we build these, like, slightly more consolidated ecosystems that are really built to serve the customer, right? speed of movement, right, even just down to Can I get the car quickly to the consumer. And that's a bunch of different ways that that happens, whether that be in service, whether that be in sales, whether it be in initial sales with wherever that mapping is, it serves the customer in the end, and that Hub and Spoke mentality actually gives us more leverage to serve the customer better. And I love the heart behind. You know, every once in a while, you just meet someone that that just surprises you.And it's been a fun surprise getting to know you guys. So thanks so much for coming on and sharing a little bit of your story today, you guys.

Unknown: 12:55

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