As part of a roundtable on the economy of spaza shops held on Tuesday in KwaZulu-Natal, major private sector partners, including Uber South Africa, Shoprite, and Takealot, together with provincial government leaders, presented a strategy to combat youth unemployment through the first and last-mile delivery sector.
Strategy for supporting small businesses
At this event, organized by KZN Premier Tamsanga Ntuli and the Minister of Economic Development, Tourism and Environmental Affairs (EDTEA) Reverend Musa Zondi in Durban, private sector representatives outlined their initiatives to support the economies of rural areas, urban settlements, and spaza shops.
Maud Modis from Shoprite Group reported that they sent a letter to the head of the EDTEA department via the Durban Chamber of Commerce, seeking the best way to collaborate with the department, similar to how Uber and Takealot operate. The discussion focused on three key aspects:
- Market access: The opportunity to interact with KZN producers.
- Spaza support: Strengthening purchasing power by improving local ecosystem infrastructure.
- Last-mile delivery: Ensuring effective participation in the delivery sector.
Need for an intersectoral approach
Modis emphasized that systemic solutions to last-mile delivery problems require joint efforts from several government structures beyond EDTEA. These structures include the Department of Licensing (for managing licensing and sanitary compliance), the Department of Transport (to assist with slot booking), and the Department of Economic Development (to provide asset financing).
According to her, this collaborative approach aims to solve broader market access issues rather than just meeting the needs of individual companies. Modis added that cooperation would help improve or assist the government in developing skills across the entire KZN community, not just within a specific company partnership.
Prospects for youth in delivery
Ofentse Madisha, Head of Public Policy at Uber South Africa, stated the commitment to creating pathways for youth involvement in the first and last-mile economy. He noted that besides motorcycles, various assets such as quad bikes and micro-enterprise vehicles can be utilized in this economy, opening significant opportunities for building a more sustainable delivery system.
Madisha also pointed out that the KZN settlement economy includes three strategic priorities: capital turnover, market access, and e-commerce. Private sector leaders, including Uber and Shoprite, are working with government officials to empower youth through delivery initiatives.
Challenges and proposed model
Madisha highlighted the necessity of integrating young people into partnerships and collaboration models. He also raised the issue of retaining youth in the delivery sector. He stated that the goal is to bridge the gap between the public and private sectors in this ecosystem through a targeted, focused, and practical approach.
He pointed to a severe shortage of commercial transport operators. Data shows that about 7% of unemployed youth have driver's licenses, but the situation is worse for the motorcycle industry: only 0.02% of youth possess or claim to possess motorcycle licenses. Madisha proposed creating a path toward industrialization.
The proposed model is four-way: attracting youth through databases like Harambee and local channels; licensing, where inefficiency in issuing motorcycle licenses due to insufficient testing center slots is noted; financing, providing trained and licensed youth with funds to acquire assets; and market access, which is provided by the companies. Madisha explained that the model is simple: a person finds a young person, trains them in driving and delivery, offers a path to obtaining a license, then provides asset and business financing, and the platforms provide market access. This model was previously successfully applied when onboarding over 2000 restaurants in the settlements.
