SOUTH AFRICA – FlexClub, a South African startup that matches investors and drivers to cars for ride-hailing services, has partnered with Sunstone Capital and Easy Equities to make it possible for anyone to invest in a share of ride-hailing fleets for as little as ZAR100 (US$7).
EasyEquities and Sunstone Capital, prospective South African investors can purchase shares in ride-hailing fleets, effectively pooling their capital to purchase rental-earning fleets.
Applying for shares on EasyEquities entitles investors to receive annual dividends from fleet rental income and offers them the ability to claim 100 per cent of their investment as a tax deduction against their taxable income.
This is according to Section 12J, a section in the South African Income Tax Act which provides a tax incentive for individuals, trusts and companies who invest in a SARS-approved Venture Capital Company (VCC).
Formed in November 2018, FlexClub is a managed marketplace that simplifies investing in cars rented to people using gig platforms to earn a living.
Essentially, it allows users to purchase vehicles which are then matched with Uber drivers who pay a weekly rental charge to the investor.
FlexClub offers Drivers Club members – like Uber drivers renting the cars – access to its market-first “Drive-to-Buy” package which empowers them with the flexibility to rent the vehicle until it is affordable enough for them to buy it.
The company plans to use the financing to add team members and expand off the continent through a partnership with Uber Mexico.
That asset class, for now, is ride-hail vehicles. FlexClub allows investors to go on the site and purchase a car (ultimately managed and serviced by FlexClub). The startup then connects that car to an Uber driver who uses earnings to pay a weekly rental charge.
Those fees generate monthly, fixed-rate interest income for the investor. The driver has the option of buying the car after the 12 months, with a descending purchase price over time.