E071 - Ben Knowles from Pedal Me

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Welcome back to the Green Element Podcast, where we feature business leaders and innovators transforming their operations to be more environmentally and socially sustainable. I'm your host, Will Richardson, and I can't wait to meet our guest today and help you on your journey of sustainability. Ben, welcome to the Green Element Podcast. Thank you so much for joining us today. You run a company called PedalMe, and we met a long time ago, about 3 or 4 years ago, 3 years ago. And you took some of the guys in the Green Element team out on your bikes, and it was brilliant. It would be great to hear more about your purpose and who you work with.

Okay, great. Thanks, Will. Yes, I'm Ben Knowles. I'm Chief Executive of a company called PedalMe. We have very large electric assist cargo bikes and trailers that get towed behind them as well. We have very highly trained staff. Those combined with some of the highly professionalized systems that we use allow us to carry surprisingly large loads around on our bikes, but also carry humans around as well. So we operate a taxi and logistics service around London, and we can carry people and things around faster than a traditional motor-based logistics service could. Basically is our— that's our value add because we're quicker and because the main cost in logistics is people's time. So you pay your staff a certain amount per hour, or they need to— they might be a contractor, but they still need a certain amount per hour to get by. If that person can do more work in the same time, then you can charge the client less and you can pay that person more. And you're not dealing with the—

you're not dealing with vehicles, are you? The cost of vehicles and the depreciation and the fuel either?

Yeah, so bikes are interesting because they don't depreciate in the same way because they're like Trigger's broom, right? So there's no one part on our bikes that if it broke would mean that it would no longer be financially viable to repair the bike. So what you do is you keep on changing the parts that are failing and the bike keeps going. So we still have the original bikes that we bought 2 and a half years ago, and they've covered over 20,000 miles and they're still going strong.

You said triggers broom. I just wanted to know, what does that— what does that mean?

Triggers broom It's an Only Fools and Horses reference. There's a sketch where Trigger's talking about how old his broom is and how he's had it for— I can't remember how long it is— 10 years or something. Then it emerges that it's a whole new broom because he's changed the handle 5 times and he's changed the broom end 10 times and Uh, but, but bikes kind of the same. If they're— if you have the staff that know how to maintain them, then you just keep on changing the parts. So you pay in maintenance, but I'm not sure that depreciation applies in quite the same way.

Yeah, no, that makes sense.

I mean, I don't know that the— it still costs you money to keep the bikes out there. So even just in terms of Parts needed for maintenance, maybe that costs— well, to start off, when we first started, it was costing us about £2.50 per operating— per staff hour that we were in operation.

Right.

And now that's come down to sort of £1.20 per staff hour because we keep on changing the components we're using to bring down the cost. So we use different gearing systems to the ones we originally used. And that had— that's made probably the biggest difference to how much we brought down the cost. We're also constantly changing the systems that we use to try and work out what's the most efficient maintenance schedule. So, you know, like a traditional bike courier would ride their bike until it breaks and then they'll fix that part. But what we try and do is we have maintenance schedules and we stay on top of the maintenance and change the parts, basically doing preventative maintenance so that the bike continues to operate to a very high standard. And that's part of what helps us be quite so quick.

Right.

So we train people to a really high standard, we have bikes maintained to a really high standard. And that plus various other systems that we use, constant feedback to staff on route choice, that kind of thing, from more experienced staff. All of these processes brought together mean that maybe over like an average job across London, we're like maybe 20-30% quicker than a motor vehicle could be.

And so you've grown massively over the last few years, haven't you? And is that because you're faster and cheaper, or is that because you're more environmental? What are the drivers behind your growth, do you think?

I think that people come to us for the green angle, but the green angle will only take people so far. But it gets us in the door. It means people use us for a couple of jobs. They want to promote the fact that they're using us on social media, and they use us for a couple of jobs, and then they stop and look at the numbers, and they're like, whoa, whoa, whoa, whoa, these guys are green, sure, but they're also more reliable. There's a guy in a funny pink hat turns up, a guy or a girl in a funny pink hat turns up. He's really, really cheerful because Pedalmummy provides really good working conditions, tough working conditions, but a great working environment, a fun working environment where people smile at you all day long and kind of people want to interact with you because what is that you're carrying on the front of the bike? How have you got a fridge freezer on the front of your bike? Why are you carrying around 4 kids on the front of your bike, etc., etc.? And yeah, we're cheaper, we're faster, we're more reliable. The service level is higher. And then people start thinking, right, well, actually, there's quite a lot of logistics that we're doing. There's quite a lot of deliveries that we're doing. There's quite a lot of movement of people that we're doing. And actually, we could not just look green, but it's going to be really fun and we're going to save people, save the company a load of money. And that's why we're running— I think the average growth figures are something like 19% month on month.

Wow.

So roughly each month is 19% busier than the month before. And actually that doesn't tell the full story because we turned down a lot of work, an awful lot of work. I mean, I would guess that if I'd been able to say yes to some of the big clients that have asked us to do significantly more volumes, then maybe our revenues would be like Double.

Right.

What they are at the minute, but we don't have the capacity. So we started really small. There were 2 of us working part-time in May 2017. So maybe like 1 full-time equivalent. Today we're up to about 36.5 full-time equivalent staff, 45 staff in total. A reasonable number choose to work less than full-time hours because It's physical work and we pay pretty well, so maybe people don't need to work full-time hours. Yeah, so it has really quite a crazy rate, but it could have been even more crazier if we'd had the resources. So we, to start off with, the directors put in some savings. We bought a couple of bikes from those savings, then we got some seeds investment, and I think we raised about £120,000, and that was enough to take us through the first 18 months. And then we crowdfunded, and we managed to crowdfund £350,000.

And who did you use for crowdfunding?

We used Crowdcube.

Brilliant. I need to ask you questions about that because we're just about to go down their route.

Yeah, yeah. Well, actually, We're doing another crowdfunder round starting really very soon.

Okay.

So most likely it will start going out to people next Monday. I think it's a really powerful way of raising money and it's really right for us because we're a democratic organization. We're kind of— it's allowed because we don't have one really, really significant investor, it allows us to— well, we haven't become like the plaything of one person who is super rich, right?

Yeah.

And so we can make decisions that we think, as directors, we can make the decisions that are right for the company because we are— we still have a reasonable amount of control over the company. But also, there are other really powerful things about crowdfunding. In that, you know, there were basically part of the PedalMe formula is make everyone want you to win, right? So we make it so that our clients save money, get a more reliable service, get faster service, and make them feel good about their involvement with us. We make sure our employees are well paid. that they feel valued, that they are allowed to contribute in, in every way that they can to the organization. And so they want us to win as well. So the clients want us to win, our employees want us to win, and now we've got this other group of people who are also invested in our success. And, you know, could stand to benefit hugely. Investing in startups is a relatively risky game, but the potential returns are ridiculous. Most startups fail. 39 out of 40 startups fail, but the ones that come off come off in a really, really big way. So you look at, even in terms of Uber, Uber in my view is not a successful company because in my view, Uber is highly likely to go bust. really quite soon. They're losing huge amounts of money.

Billion last quarter, wasn't it, that they lost?

Something insane, something insane like that. But the initial investors, people like Lance Armstrong, who bought in when the company was valued at about £1 million, $1 million, and sold out when it was worth $68 billion, you're talking about 68,000 to 1 returns.

Yeah.

There is nowhere else you can get returns like that, that I know of anyway. So investing in startups can be, can be huge. The third group that want us to succeed is the city, right? So what we're aiming to do is we're trying to make the city better for the citizens that live in it so they want us to be there too. And we do that by, obviously we're reducing air pollution. It's something like compared to an electric van, we reduce particulate emissions by 97.5%, uh, 90% less CO2 emissions.

You mean by, by a van, not an electric van?

Uh, that's compared to an electric van, those figures are.

So an electric van produces emissions? No.

Yes. So electric vans use electricity.

Gotcha.

Which comes from the grid generally. If there are solar panels that are specially built for that van, then you can say that that electricity is coming from those solar panels, but there's still CO2 emissions tied up with the manufacturer of that van and with the manufacturer of those solar panels. You know, if that is the circumstance, then yeah, it's better than a diesel van, but to say— people talk about zero emission vehicles, but they're not zero emission vehicles. There are also particulate emissions. So the majority of particulate emissions that come from a van or a taxi or private hire vehicle, whatever, don't actually come from the engine. They come from brake dust and tire wear, and those are associated with the weight of the vehicle.

Right.

Okay. So our bikes weigh about 50 kilos and say the rider weighs like 80 kilos, right? So the combined weight of bike and rider, call it 130 kilos. And that system can then carry 150 kilos of cargo. Now a van, an electric van, A relatively small one might weigh 2 tons.

Wow.

And maybe can move 600 kilos. So the ratios are completely different. And as a percentage of the work done to move our vehicles, the amount of work done to move the actual payload is much higher and the overall energy consumption required is a lot lower. But also, uh, so we take electricity from the grid, but 1 kilowatt-hour, which might take an electric— a really, really efficient electric van or car 3 miles, will take one of our bikes 60 miles.

Right.

So they're completely different scales of energy use. And also because The vehicles we're using are so much lighter. There's so much less material in them. There's a lot less embedded carbon from the manufacturer. So you have to melt a lot less aluminium. The batteries are a lot smaller. All of these things mean that the CO2 tied up in the manufacturer is a whole lot less.

Yeah.

And, you know, these things make us an awful lot more green.

It's remarkable, isn't it? You don't even think— I mean, you don't think to compare like that, but it's really interesting that you've done that, and it is so much more green than— that's not even comparing you to a diesel van, is it? So you can see why you are growing, particularly on your— even on your environmental credentials.

Well, I mean, As I say, we don't actually talk about those green credentials that much. I really think that the key to our growth is not because of that side of it. That's kind of a nice to have for most of our customers. The key is that basically we offer a better level of service than our customers would get elsewhere. We make our customers look really good and they enjoy working with us. We communicate, we're nice people, we we take steps to kind of make sure we're entertaining the city. One of our brand values is entertain the city. So TfL commissioned us to come in to assist with logistics on Car Free Day. So on the 22nd of September this year, 20 kilometers, I think, of streets in London were closed to show how the future could be. without motor vehicles. And we sent something like 26 bikes to support this event and provide delivery and taxi services to help people and things get around, to provide an alternative. It was amazing. But the highlight for me was there was a brass band playing, and one of the riders said, can we give these guys a lift? And basically, long story short, we ended up with this brass band sitting on the front of 7 different bikes riding around. And the reaction it got was just incredible because basically the band couldn't round enough. They were marching around and that meant that their range was quite short. So they weren't really getting to where all the people were. But the way people reacted to a brass band sitting on the front of a load of bikes being ridden around, it's just—

Amazing.

It was amazing. Yeah, it was amazing. I was like, as I was riding around, I was like, this is exactly what I want to be doing right now. There is nowhere in the world that I would rather be. If you have a flick back through our Twitter feed and Instagram, you will see these videos and pictures of that. It was the Heavy Beat Brass Band and they were excellent and that really helped. But yeah, we seek to entertain the city In ways like that. And that's a perfect example because that, you know, we're also a democratic organization and that suggestion was one of the riders made that suggestion. He works for us part-time while he's studying film. That was his idea and as soon as he suggested it, we were like, yes, that's a brilliant idea, let's run with it.

Brilliant. What would you say your business superpower was?

My personal business superpower, or—

PedalMe's business superpower.

PedalMe's business superpower. We did talk about using superhero-type branding, actually, quite a lot, because there's quite a lot that's kind of superhero-like about us. We have, you know, funny pink hats, and we carry ridiculously large things on the front of our bikes. We make journeys by bike that people wouldn't think were possible. Every day, a rider goes out with a trailer and a bike to Isleworth, which is something like 12 miles away from the centre of London. They pick up 230 boxes of flowers weighing about 200 kilos, and they cycle them into the centre of London. And then we have other bikes come and meet that trailer and then do a load of deliveries. It's for a company called Freddy's Flowers. They're a startup which is further ahead in the curve than we are, been around a bit longer. Um, really nice company to work with, but we do deliveries for them cheaper than anyone else could do it. And in a way, basically the, the trailer The trailer that we use for that is a prototype that's built especially for us. It has its own braking system. It's not something that you can get anywhere else in the world. As far as I know, that design of trailer doesn't exist, not on this scale. The trailer is 4 meters long. It's 1.2 meters wide. It's huge.

It is big, isn't it?

And it's being towed by a bike that's 3 meters long. So the total vehicle length is kind of similar to a London bus. It's a huge, huge vehicle.

I'm going to Google that when we finish this.

And, you know, people think that it was possible to deliver 230 of these boxes of flowers. They're like nearly a meter long. They're quite substantial things. And to deliver 230 of them by bike and still to do that faster and cheaper than any other way of doing it. I think our superpower is finding ways to do things that people think aren't possible by bike faster and cheaper than anyone else could possibly do them.

Brilliant. Love it. I love it. You've talked a bit about this, but how do you engage your staff, suppliers, and customers with your mission and purpose?

Like all organizations, we have value statements, but people don't read value statements as a general rule. But I think it comes across in everything we do because the value statements have come out from what we actually do.

Mm-hmm.

And I always want to make sure that they are— that the value statements are credibly connected to what we are actually doing. And a lot of it comes from a genuine want to make sure that we're, we're looking out for people, that we're helping people get ahead. And also for me, people say things like, oh, it's really good of you to look after your staff, it's really good of you to try and look after the city, it's really good of you to try and entertain the city. But I don't see it that way. I see it as the smart business decision because if other people around you are winning, then they want you— and that's partly because of the organization— then they want the organization to win.

Hmm.

So for me, that's not sort of some kind of like fluffy idealistic thing. It's absolutely key. It's just being a smart capitalist. Make sure you're elevating other people. Make sure you are doing something that has benefit to other people, and they will help you in a million tiny ways that you don't even know about, that are unseen by you but are helping you and pushing you along. And I feel like that kind of dynamic's helped me so much in not just in, in this project, but also in in previous projects that myself and some of the other directors have been involved in, where we were teaching. So the idea for PedalMe came out of a community cycling project. So we turned up in council estates and we taught people to ride bikes. And this project started really small, with just a couple of us pushing bikes into areas of high deprivation and Teaching people to ride bikes, but it started to get really, really big. And at its peak, there are about 100 people coming to each session. And so we needed to move an awful lot of bikes. And to do that, we used cargo bikes and we piled bikes on top and we found that we could give each other lifts. And then that gave us the idea. And then we convinced this Dutch cargo bike manufacturer Urban Arrow to build us a bike and send it to us for free so that we could try it out. And that, that's the background of the whole project. And people have done really, really big things to help us along the way because they think that we're doing something that's adding value. And, uh, yeah, it's really nice.

It's brilliant. Well, When it comes to running an ethical and sustainable business, what would you say has been your biggest struggle so far? And can you tell us a bit about how you've overcome it?

I guess I've just been thinking because, well, I feel like there is a constant struggle with our investors who I love very much and are really involved in what we do. Because they're involved at a bit more of a distance, Sometimes some of the more unusual ways we decided to do business, like for example not using contractors but having employees instead.

Which is such an amazing thing you're doing. I think that it's so progressive and it's just such a— you've gone against the norm and I'm just— yeah, I was really impressed when you told me how many employees you have and why you've gone down that route. It's brilliant.

Yeah. So it seems very obvious because everyone else is doing things this other way and that's helping them avoid taxation and making their responsibilities less. It seems obvious to go that way as soon as things become a bit tight financially because people think, well, you can save 20% on not paying VAT and— 11% on not paying national insurance. And that's, you know, those quite sizable chunks, and that's gonna make a real difference to how much money is coming in and going out. Because, you know, we're still a loss-making company. We're not Uber, we're not losing a billion dollars a quarter. And it is going in the right direction, but we are still burning money. I think all startups burn money, and it's difficult to anticipate how much money you're going to need to burn to get to maintain the growth rates and to train everyone up and develop the systems. Um, everything becomes more efficient over time, but the problems that you need to overcome also become bigger. So yeah, the biggest challenge has been that people naturally, when they're worried about cash flow and about the financials, that they start to want to go back towards these more widely used models. But for me, although, you know, we might be losing 30% in VAT and National Insurance, that kind of thing. But the benefit in terms of— first of all, in terms of how that makes our staff feel to be part of something. They're not just sort of vaguely connected and we can get rid of them tomorrow. You know, they're part of us. We're entangled. And that's Makes sense for us because we spend huge amounts of money and time training our people up and helping them to be really professional operators. A lot of our systems are based around reflective practice, which would be familiar to any professional. So any teacher, lawyer, doctor gets taught this reflective practice process where You think about what's happened, you think about what went wrong, you think about what went right, and then you change how you do things next time.

That—

we teach that process to our riders through various processes. So we capture where we've made errors, where things have gone wrong, where we've had near misses and there's nearly been a collision. We review that and work out how we can prevent the same thing happening again. So all of this investment in our staff, it just makes so much more sense for them to be employees. And from a more hard-nosed capitalist point of view, it also means that we control the resource. So one of the problems Uber has as a model is that they are just the intermediary.

Hmm.

So they don't have any control over the resource. And so that means that they don't have very good control over pricing. They can't make substantial changes to the way they operate because if the drivers don't feel happy about it, then they'll go and work for someone else tomorrow because they've already got a car. They just need to do the onboarding. They've already got their DBS check, etc. So they could just switch to working for another company. We have a much more— because we have this more entangled relationship, it's not like that. We have very good control over the market and we will continue to do so. And that will just make us have a lot more control over our own destiny going forward. Okay.

I can relate to a lot of what you just said, actually. I think it's really admirable what you're doing. I think it's really admirable. If you could offer one piece of advice to our listeners which could help them with their purpose, what do you think that would be?

I'd say stop planning and give it a go. What I mean by that is that I feel like often people want to plan in, in so much depth and have so much control over what's going to happen. And actually, they're deluding themselves because they don't know. And there's no way to know until you start doing something. And I would never have convinced people to invest in us if we hadn't just put in our money, bought some bikes, started riding them around with people on the front. Because the idea, unless you're doing something that's been done before, which makes, makes it a lot easier, then no one's going to believe that it's going to work because they're going to look at it and say, well, no one else is doing it this way. So therefore, presumably, all the previous attempts to do this thing have failed. So that tells me that it's not going to work. That's people, one of people's, one of the heuristics people use, one of the rules of thumb. So unless they actually see it happening, then they don't believe that it's going to work. And as soon, as soon as you start doing it, then not only do other people start to believe because they're actually seeing it, but also they believe that you really believe that it's going to work.

Hmm.

Because if you really believe that it's going to work, then you're just going to start doing it and you're going to invest yourself and you're going to work whatever hours it takes to make it work. And then other people will come along with you because they see that commitment. And because lots of people say lots of things that they don't mean, you know, it's part of society. It's not— I don't mean that people are lying all the time. I mean that—

Now you just sound cynical.

But it's true. It's part of how we how we operate. We kind of say things to position ourselves or to show values or whatever. It's only when you actually do something— this is why Extinction Rebellion is so powerful, because, you know, it's one thing to say, oh, we should take action on climate change. It's a whole different thing to be someone who's never been arrested before Like, you know, a lot of the people that I know who are involved, they've virtually never been to a protest before. Now they're getting dragged away by the police, not just once, multiple times. And they, you know, that's a really big sacrifice for them. And that makes it so, so powerful because the sacrifice makes it real.

Yeah.

It tells you that someone really, really believes that this is a really, really big problem and it does really, really need some really drastic action in a way that writing a paper or talking about something is never going to do. So just do it.

Just do it. When it comes to reducing your environmental impacts and carbon footprint of your business, What would you say your biggest challenge or frustration is?

I guess I feel like, well, the biggest challenge for us is finding the staff resource to do the things that will help us to reduce our impact in terms of carbon footprint and air pollution, etc. So there are a couple of obvious things that we could be doing to reduce our CO2 emissions and uh, particulate emissions still further. We could be making the bikes lighter. So have them made out of carbon fiber, for example. And I did actually meet Phil White, who, he set up a company called Cervélo. They're a bike racing brand. They make carbon fiber bikes. He founded it with a guy called Gerard Vroomen.

Right.

And I met up with Phil White to talk about potentially designing an aero carbon fiber cargo bike.

Right.

But those kind of operations, you need the capacity to do that. It's often— and I guess the thing for a lot of businesses is that there are all these other conflicts other tensions, other draws on your resource, and primarily those are the things that are going to make your company keep on operating, keep on bringing in money, keep on allowing you to pay people, and those priorities overwhelm the more strategic things that you want to think about, like reducing CO2 emissions. So, I mean, I, I think that probably we could reduce our CO2 emissions by another 25% again by making tweaks to the bikes and maybe something like 10% off the weight of the total system weight maybe. And therefore, I don't know, it's, it's the particulate emissions are, they're not linear with the weight of the vehicle. They're proportional to the square, I think. of the weight of the vehicle. So yeah, there are more gains that we could have, but it's about having the organizational capacity to, to do those things. And yes, it's always a challenge. We could also have solar panels for, for all of our staff to take home to charge the batteries with. But, but again, that would require us to invest in buying the solar panels And that's money that's taken away from the organization's ability to, to grow. And I guess for me, the gain from more people using us is so great that the priority is get us bigger, keep on expanding, get more customers, get more riders out there, get more investment to allow us to do that. So that takes away from my ability to reduce our carbon footprint still further.

Okay, cool. Thank you. What is the best way that we can connect with you and find out more?

I'd recommend, uh, take a look at our social media because, I mean, let's face it, you already want to see a brass band being ridden around on the front of a load of bikes, and you already want to see 230 boxes of hours being delivered.

On a double-decker-sized bike.

Yes, yeah, on a 7-meter-long bike. It's something you already want to do. So take it, uh, if you Google PedalMe, you will find us.

Cool.

Brilliant. Uh, yeah, Instagram and Twitter, we're @pedalmeapp. But yeah, if you, if you just Google PedalMe, you will find us. We are out there.

We will put all of this on our, um, On the notes on the podcast. Thank you so much, Ben. It's been a pleasure talking to you.

Thank you. Yeah, I've really enjoyed it.

Thank you so much for listening to the end of this episode of the Green Element Podcast. Do take a moment and share this with your friends and colleagues and rate and review the podcast wherever you get your podcasts. I'd love to know what has been your biggest takeaway from this conversation. What are you going to do differently? Please share your thoughts across social media and tag us so we can see them too, @GE_podcast. For links and show notes for this episode, visit our website, greenelement.co.uk/podcast. Thank you again. I hope you will join me on the next episode, and together we can help create a better world.