Planet42 is a long-term car rental service company, founded and led by Eerik Oja, whose mission is to reduce transportation and mobility-related inequality. To date, he has successfully helped over 15,000 families in South Africa and Mexico City.
During the interview, Eerik is currently in the Estonian office, but he spends most of his time in Johannesburg, South Africa, where his family resides. He also regularly flies to Mexico, where Planet42 has its third office. It’s a bit like a scene from one of Eerik’s favorite books, Douglas Adams‘ “The Hitchhiker’s Guide to the Galaxy,” where the protagonist travels around the galaxy after the destruction of planet Earth. Hopefully, Eerik will contribute to the well-being of people and the salvation of the planet before anything as dreadful happens, and the only connection to the cult classic remains the number 42 in the company’s name.
How successful has Planet42 been in reducing social inequality so far?
In Mexico and South Africa, there are over 15,000 families today who are able to carry out their daily activities and meet their basic needs thanks to our cars. Owning a car in Estonia, Johannesburg, and even Mexico City are completely different things. Even in London, owning a personal car is a luxury, and overall, you move slower with a car than with public transportation. However, in places like South Africa, Mexico, and many emerging markets, public transportation is slow, unreliable, and dangerous, especially for women and children. If you don’t have a car, you can’t even do the most basic things. For example, you might decide not to apply for a better job because you can’t commute there in a reasonable manner.
Cars are a complex issue from an environmental perspective. We buy used cars for our customers. It is important to maximize the use of already-produced cars because manufacturing a new car has a significant environmental impact. Our goal is for people to earn enough income to care about the environment and the footprint they leave behind. However, if a father has to worry about how to feed his children on a daily basis, he won’t be concerned about environmental issues. He needs to survive. Developed countries have high levels of transportation and mobility inequality, which leads to financial and social inequality. For example, you may be able to commute to work but cannot visit your grandmother because she lives too far away.
You are socially concious business entrepreneur. Why car rental service and developing countries?
Planet42 is the brainchild of co-founder Marten Orgna. He spent a long time working in Africa and saw that banks there don’t provide loans to ordinary people with stable incomes to buy a car to meet their basic needs. There is high demand but no supply. It seemed illogical to us. It’s a problem that shouldn’t exist.
In 2017, we spent 10 days in Johannesburg and Cape Town, going around and talking to car dealers, insurance providers, lawyers, and potential customers. The goal was to understand why a company like Planet42 didn’t exist. Since we didn’t find a reasonable justification, we decided to do it ourselves. Our customers don’t live in slums; they are not unemployed drug addicts. They are regular people – teachers, police officers, telecom employees, and so on – who have a sufficiently high salary to make monthly car rental payments. But local banks are too conservative. Our role was to remove that obstacle so that they could improve their lives themselves. It’s an amazing feeling.
What are some quirky characteristics of the South African and Mexican markets?
As digital-minded Estonians, we went to South Africa thinking that we would greatly improve things there. However, on-site, we realized that things were done differently. Initially, we struggled for several months to establish cooperation with local car dealers. They were accustomed to working with paper applications, which they would then manually type up. Overall, it was a lengthy process that we wanted to make more efficient. After months of trying and refining our electronic application, we finally understood that we just needed to print out those applications. We brought thousands of applications to the car dealers, and soon we started receiving applications. Since then, they no longer use paper and have adopted digital methods, but we needed to go through that step initially.
In Johannesburg, for example, I have never managed to be the first one in the office, even if I come early, even at seven in the morning. And when the clock strikes 5:30 p.m., everyone leaves. I’m consistently the last one to leave. In Mexico, it’s the complete opposite. I usually arrive at the office around 9 a.m., and I’m almost always the first one there. And when I leave around 6 or 7 p.m., I’m the first one to leave. They work there until eight in the evening, and at nine they go out to have dinner. And both systems work.
Where to next?
Next steps would essentially involve targeting every emerging market, although entering a new country is quite challenging. We need to review regulations, establish a local team, etc. We have been exploring opportunities in Africa, although the markets there are smaller compared to South Africa, and we are not currently targeting them. In Latin America, for example, Brazil is an interesting market. We have also looked towards Asia, such as Indonesia and the Philippines, and even Vietnam, although motorcycles would be a more suitable product there rather than cars. Currently, our focus is on making South Africa and Mexico work well, as it would be easier to secure funding for new markets once we have succeeded in those regions.
What is the transport sector and its possibilities like in 2030?
By 2030, sustainability will become an increasingly important topic in the transportation sector. Sales of internal combustion engine cars will decline, and restrictions related to their sales and usage will also reach emerging markets. Wealthier countries have contributed significantly to reaching their current status, but now they tell poorer countries that they can’t do the same. For this to make sense, France should, for example, support sustainable initiatives by building electric vehicle charging infrastructure in Francophone Africa. If you want to prevent environmental pollution from internal combustion engines, you also need to create the necessary infrastructure. It’s not enough to simply say “you can’t.” That won’t work.
The electrification revolution is coming. Africa has abundant sources of renewable energy, such as sunlight and wind. In Johannesburg, there are already many independent electric grids being built, and the next step is for people to charge their cars at home. I believe that development will progress rapidly from here and improve continuously. The World Bank and governments need to invest in charging stations to accelerate the adoption of electric vehicles.
Personally, I dream that the Planet42 business model remains beneficial and profitable. I hope the company grows sustainably and remains a great place to work, with our activities having a positive impact on both customers and partners. On a personal level, I strive to maintain balance, spending quality time with my family alongside working hard. I consider myself fortunate and grateful for the excellent position I’m in. I am a happy person.
Interviewer: Kerttu Kongas