“Our operational strategy…shoot it!” These are the words of Ben Knowles, founder of Pedal Me, the London-based cargo bike logistics company that is becoming ubiquitous in the British capital, an urban space where the company eats the food of much bigger fish, and right under them. nose too. CI.N seeks to understand an astonishing growth forecast…
After several rounds of oversubscribed raises from retail investors, the next step for Pedal Me is to bring in one or two institutional investors. To be precise, £5million is being sought in the near future to further Ben Knowles’ business.
CyclingIndustry.News visited the company’s London headquarters in February to gauge Knowles’ reaction to the question on everyone’s mind; what size bike can the cargo bike market reach? His response, by any measure, was astonishing.
“We think this business, over decades, could have two million employees and become a global business, but we are only in London at the moment,” he said, indicating that this does not would not remain the case for long.
“Our numbers are based on 1% of London’s GDP being an accessible market for us, so we’ve applied that 1% to global GDP. Half the population lives in cities; therefore, half of this trade is in the cities – we then assumed that we could usefully help the half of the population that lives in the cities. In fact, it’s probably much higher. Assuming we can work effectively in these spaces, and have proven that we can, that’s $200 billion worth of work per year – with each employee bringing the company $100,000 in revenue. We will need 2 million employees.
Knowles points out that the company is on the verge of maturing some of its efficiencies and that the introduction of artificial intelligence will further strengthen the company’s ability to far outperform other heavier logistics companies. Right now we’re being told that the gross margin per hour is 40%, but we can easily aim for 60% with the AI implementation that will soon come into play, along with the expansion and rapid training of company personnel.
“All I’ve done since these numbers were presented to me is look at them and think ‘ooooh, that’s an awfully big number’. We have to be extremely aggressive in our expansion now. Pedal Brings me a lot of social benefits so I can’t wait to get going With the current raw setups we produce a third of the co2 of an electric car or van The carbon embedded in the production of a one electric vehicle is enough to build three of our cargo bikes and travel 300,000 km,” says Knowles.
Scale efficiency is also driving the growth. Pedal Me is on a recruiting spree where Ben predicts a tripling of numbers by this time next year. With that, Pedal Me’s numbers suggest the company will be able to do “five times as much work with a triple staff”, thanks to coverage and technological efficiency.
The proposal is strong for those who can start running. The company has its own course now recognized by the city and guilds for the future logistics cargo bike rider.
“If the candidates apply themselves, we can find someone driving and working within eight hours. This week we added six employees and the current goal is now to add seven per week with no deadline,” Knowles says of the “gun it” approach to achieving this high revenue goal.
At the time of this writing, 75 of the 80 bikes in the current fleet are in circulation on the roads of the capital and Knowles himself has replaced the staff. Nestled under the historic arches of the Northern Line there is ground that one would expect to be jam-packed when the fleet returns and as such there is now an active hunt for the current property.
“We are looking for old fire stations, they are perfect for us. We aspire to provide accommodation so that people outside of London can move around and sleep, and we would like to help people on the streets find employment, with accommodation as part of the package. The firefighter pole also communicates the urgency of our profession! We are looking for a number of properties,” says Knowles.
Behind the scenes, assessments of the potential addressable market and how to capture the lion’s share of the pie were bolstered by high profile nominations. Non-executive directors now include a former CTO of Vodafone, as well as a CEO of a sustainable investing think tank.
Frontline workers who will run the bulk of the operation will get their fair share of the business, says Ben, who has already targeted an average pay rate of £27,000 a year including bonuses. Runners can, in theory, earn a lot more, we’re told.
“Riders have access to their data to see how their commissions are paid. The salary is linked to performance in addition to the hourly rate. Interestingly, the top performers can earn double what’s lower and yes there is a gender difference, but it’s not what some might expect. 10% of our cyclists are women, but the top 30% are largely women. I think women are less likely to apply because unfortunately what we do seems intimidating, but we do have action policies for underrepresented groups so we can push applicants through the application process for interviews,” says Knowles.
The cargo bike market has seen incredible growth, worsening by 50% or more in recent years due to personal and business use. Germany now has 1.2 million private cargo bike users (the modal share doubled between 2019 and 2021) and 8.4 million potential buyers.
Pedal Me’s interest is to be a significant player in the B2B arena where analysts predict that up to 43% of cargo bike sales will come from companies’ logistics divisions.
An in-house data scientist recorded Pedal Me’s accessible market at 90% commercial urban tasks, which is significantly ahead of what a typical vendor can offer. The company’s market advantage stems in part from its research and development partnership with PON’s Urban Arrow brand, for which it has co-developed unique cargo transportation products, such as its taxi designed by the house.
Why can’t a bigger, more established logistics giant retaliate against a company like Pedal Me?
Knowles concludes, “I think the reason is that today’s large logistics companies are generally very simple creatures; they are not able to do what we do. In a typical logistics model, a company provides a platform and hires contractors to operate through that platform. This works for vans but isn’t as simple for bike logistics where people are hauling all sorts of different things. There are not enough skills available for people riding these cargo bikes. We are a center of excellence for this, we train people to carry more than double what an untrained member of staff can