Uklon co-founder: "We are not afraid to support military funds, whereas international competitors cannot do this"

At the beginning of the full-scale war, the Uklon taxi service calculated the expenses and funds that had been accumulated for international expansion. The co-founders realised they needed to give up office rental and marketing. The team set a goal to sustain themselves for a year. The accumulated funds were expected to be sufficient for the company's functioning during that time. However, the company managed to survive and is now scaling up. It recently entered a new foreign market, with another one planned in the future.

How did the taxi service manage to survive? What contributed to Uklon strengthening its position in the market? How are the company's performance indicators recovering? What services does the team work on? Which markets are being opened? And why is franchise scaling not being considered? Dmytro Dubrovsky, co-founder of the company, told Mind about this and many other topics.

– How did Uklon recover from the start of the full-scale war?

– It's important to distinguish between different periods of the war. In the first month, the number of orders plummeted. The regional situation at the beginning of the war was as follows: the number of requests sharply decreased in central and eastern cities. In the western part of the country, there was panic in the early days, and orders also declined, but western cities quickly recovered in terms of performance indicators. For example, if we take the number of orders in Kyiv in February 2022 as 100%, we only had 12% user activity in March. However, by July, this indicator had reached 56%. Currently, most Ukrainian oblasts have almost fully recovered. We have got an interactive map on our website with indicators being updated on a monthly basis.

– What were the main challenges for the company?

– Our first challenges were to survive as a company, retain our team, and strengthen volunteer assistance. Our goal was to continue operating without interruption. It was crucial for us to keep working, considering that our team members were also present in these cities: some were relocating, some were dealing with personal issues, and others were fleeing from occupied territories.

– Did you have a plan in case of a full-scale invasion?

– Honestly speaking, we were not specifically prepared for a full-scale war. We discussed this matter with partners, and it seemed most likely that the aggression would occur in the eastern part of the country, in Donetsk and Lugansk oblasts. We thought putin would attempt to establish a land corridor to Crimea, and therefore, in our opinion, Mariupol was under significant threat. Our boys and girls were advised to leave the city. However, we did not anticipate that russia would approach Kyiv. Events unfolded differently.

To withstand the situation, we adjusted our planning. We held meetings and analysed indicators almost every week. Every month, we reviewed financial plans and adjusted the budget as needed. Initially, we calculated our expenses and the funds we had accumulated at that time, which were intended for expansion. We cut all marketing and office expenses and gave up office rentals. As a final step to sustain ourselves for a year, we needed to reduce salary costs. We communicated that we could pay the full amount at the moment and introduced a 20% discount on salaries. We explained that as soon as the service started to recover, our first step would be to restore employee salaries. And almost three months later, in July, we did it.

Dmytro Dubrovsky with his team

Photo: Personal FB page

So our goal was to sustain ourselves for a year. Thanks to the funds allocated for expansion and reducing all expenses, we achieved it. It was short-term planning: simply to endure and survive.

– Did you have any staff reductions?

– We had minimal staff reductions, only a small percentage of operational departments that were not heavily involved. We lost about 5% of the team.

We started the recovery process in the spring by hiring professionals. Now, the technical team is even larger than it has been before the war. Overall, we have over 120 people in the technical team, including not only developers but also business analysts and engineers.

– Do you plan to continue expanding the team?

– We are still hiring because there is a need. We have launched separate teams for product development. Moreover, the expansion also requires a larger workforce. We are hiring, but not at a rapid pace because we need to cover little needs. We are not the type of company that hires 200 specialists and then doesn't know what to do with them. We plan everything carefully. Technical specialists are expensive, and it is important for them to be experienced and work together as a cohesive team.

– So you don't hire junior specialists?

– We have not stopped hiring juniors, but not as frequently. We prefer senior specialists because rapid development requires high speed and a large workload.

– Did the war and blackouts help you gain an additional competitive advantage over international players?

– We can't say that the war helped us in any way. Still, we were not afraid to communicate our focus on charity and volunteering. We significantly increased our emphasis on these areas. I believe it's important for companies that are doing great things for society to share their contributions.

– How is the market divided between the three players now?

– We don't have exact numbers at the moment, but I think we already have a significant lead over Bolt. Overall, we occupy the first position in Ukraine, followed by Bolt with a noticeable gap, and Uber is far behind. If we were on the same level as Bolt before the war, now we feel that Uklon is ahead. Most of our team is in Ukraine, so we feel the societal moods and needs. We can react more quickly and flexibly to pricing policies, discounts, and marketing. This advantage is crucial for us right now.

– How did you 'polish' your product due to blackouts, communication issues, and internet outages?

– I can't say that we made significant changes specifically for working during blackouts. We fine-tuned some technical nuances. These were 'tricks' and fixes done by our development team. They simply worked on fixing and fine-tuning things to ensure that communication would at least be available at a minimum level. We ensured communication with drivers because it is crucial for us to have mobile connectivity and internet access. Without them, our technical solution essentially doesn't work.

– Were drivers able to cover all orders at the beginning of the war?

– The number of orders dropped fourfold in major cities, so there were enough drivers who remained. Then, there was a period when there were more drivers because people were losing their jobs en masse. Companies were laying off a lot of employees, and they turned to driving taxis as a way to earn money. There was a slight imbalance in favour of drivers at that time. However, the situation gradually balanced out as people started returning to their cities from abroad, businesses began to recover, and some drivers returned to their previous occupations. Currently, the situation is more or less the same as before the war.

– So, can we say that both the number of orders and the number of drivers have reached pre-war levels?

– More or less. Of course, we had projected growth that we planned before the war. But now we have reached the levels of early 2022. If we consider Ukraine, we are still growing in some cities.

– How is the reoccupied city of Kherson recovering?

– The situation there is difficult. russian forces destroyed a lot of infrastructure before leaving. Intense shelling is still ongoing. People are afraid to return. There is some positive momentum, but it is little.

– In February, you mentioned considering entering the fintech market and collaborating with fintech startups in that direction.

– We are considering this possibility, but we haven't taken any concrete steps yet. We have received proposals, but there hasn't been any detailed discussion. It remains in our plans.

– What are you currently working on?

– We have launched several teams that are developing new products on our platform. They are currently in the development stage. We want to expand, but I can't announce anything specific at the moment.

– Can you give a hint about the niches of these products?

– Some are related to delivery, but it's not the same as before with restaurant delivery. It's more of a B2B product. There are also a few new products in development, but I can't talk about them yet.

– Are you now talking about large-scale transportation?

– No, we are talking about various deliveries within the city.

– And when will you launch scooter rentals?

– We are considering this project. There are several different approaches to entering this niche. But we currently don't have a specific team dedicated to it. So, I can't say when exactly we will start.

– Do you plan to continue entering new markets? Which countries?

– We are preparing for expansion, but we cannot plan vast scaling because we want to develop in Ukraine. We want to create new products here. Plus, we currently have a strong direction in volunteering, but expansion plans have not been abandoned. We aim to become an international company with Ukrainian roots.

– How much has been invested in this market?

– The data is under a non-disclosure agreement (NDA). I cannot provide an exact amount, but I can say it's over one million dollars. The majority of the investment comes from the partner, while we contribute our expertise, management team, product, software, and brand.

– How did you find this partner?

– We were acquainted with each other. It was through Sergiy’s (Smus, co-founder of Uklon – Mind) contact. We approached them with a proposal for them to invest money, while we contribute our time and software. That's how the partnership was born.

– You mentioned that it's not a franchise. Why don't you plan to develop in that way?

– We tried the franchise model, but realised that it wasn't very viable for us. Franchising reduces the level of control over service quality, and quality is paramount for us. So, currently, we are only considering independent entry into a country or entering through strong partnerships where the partner invests sufficient funds, and we contribute enough time and expertise. By the way, we are already entering the second country independently.