Ecobus Runs On Vegetable Oil. It Also Runs On Time, Something Other Cabo Verdean Minibus Operators Find Threatening
From the capital city of Praia, Cabo Verde, transportation between cities is disorganized. Fáron Peckham began his Ecobus company on the island of Santiago in Cabo Verde to help change this.
Most people travel to the countryside in vans–more specifically Toyota HiAces–which get overloaded and chaotic as the drivers circle round and round to fill up the seats with passengers. Drivers’ helpers routinely wrangle and haggle with each other over passengers.
There are various forms of transportation in Praia. Taxis can carry up to four people plus the driver; they can go to the countryside as well as operate within the city limits. The vans/minibuses (HiAces) can carry up to 14 and driver, and are prohibited from doing intraurban transportation, meaning that if they pick up a passenger in one municipality, they must transport them into another municipality. A taxi cannot get a minibus license, and a minibus cannot get a taxi license. They are separate and distinct.
Peckham, a long-term resident of Praia who relocated to Cabo Verde in 2006 from New York, had an idea for offering reasonable, scheduled transportation from the city to the interior of the island, that was also eco friendly.
His small fleet of Ecobus HiAces travel through the island of Santiago powered by recycled cooking oil.
Peckham and his team collect the oil from about 60 restaurants in the cities of Praia and Assomada. He puts the oil through a filtration process to be used in his mini buses, which were adapted to run on waste vegetable oil as fuel.
Using free renewable energy while running on a strict schedule sounds like a great idea that solves several problems, but some of the other taxi operators don’t like it.
Instead of stepping up their own van operations to compete with Ecobus, they tried to stop Ecobus in its tracks, and recruited the mayor to do so in the municipality of Santa Catarina, which is based in the city of Assomada.
The drivers successfully lobbied the mayor for new regulations during campaign season in a year with mayoral and legislative elections. The intention was to prohibit scheduled departures within the Assomada city limits, thereby destroying Ecobus’ business model.
There was just one problem. The mayor never actually had the power to regulate interurban transportation. Only the national highway department, DGTR, could do so.
The decree never went to a vote by the aldermen, but instead was issued as an executive order. In response, Peckham took his fight to the media, and any institution that had authority in the matter.
After six months of working with the local ministries, the national highway department, the local police, and filing court injunction after court injunction, Peckham has yet to find resolution. Ecobus is still prohibited from operating scheduled departures from Assomada, but the business is still up and running.
Peckham was born in Canada to parents from America and Guinea Bissau. He has ancestors from Fogo Island in Cabo Verde.
He started converting Toyota diesel engines as a hobby. When it worked, he turned it into a business. Peckham is a serial entrepreneur, having previously started a string of Internet cafes and an Internet phone company, both in Praia, with friends from New York.
Peckham talked to AFKInsider about dealing with crisis in his business and trying to succeed in Cabo Verde.
AFKInsider: Did you expect such a fight from the other drivers?
Fáron Peckham: I expected resistance, but was hoping that resistance would come in the form of free market competition rather than election-year lobbying and political corruption. Considering that Ecobus is on firm legal ground, using the same licenses as every other minibus on the highway, under a licensing regime that has been around since the ’80s, I did not expect that their lobbying would have such a fast and targeted effect on us. I have to give the Association of Hiace Driver’s of Santa Catarina credit.
They formed their association in February of 2016 and literally were able to get the rules of the game changed to prohibit scheduled transportation from Assomada in one week. These guys were screaming about how they were going to riot in the streets and flip over all of my buses on a Monday, and by Friday, March 4, 2016, Mayor Francisco Tavares had ordered the police into the streets to stop every one of my buses, pull out the passengers, and force them to get into my competition’s buses, or else they couldn’t travel. In hindsight it all makes a lot more sense. The lawyer for the Hiace Driver Association, Félix Cardoso, was the one pulling all of the strings. Cardoso made millions in his failed defense of drug traffickers in the nation’s highest profile drug case ever. One of his investments was in a Hiace operating on the same route as Ecobus. Cardoso also happens to be the current lawyer for the municipality of Santa Catarina, and a friend of Mayor Francisco Tavares.
AFKInsider: Why do you feel Ecobus is needed?
Fáron Peckham: Ecobus is needed because we are the only provider of scheduled transportation in between the municipalities. Having a dependable transportation system is crucial for interurban labor transport and commerce. If people can’t catch a bus and depart at a specific time, then they can never reliably get to work on time. Punctual transportation is an important part of the foundation that a labor-based economy is built upon.
AFKInsider: Why was it important to offer scheduled service instead of random pickups?
Fáron Peckham: For consistency’s sake. Prior to Ecobus, and still prevailing in Assomada due to the prohibition of scheduled transportation there, customer-centered transportation did not exist. The cornerstone of the system used by the other buses is that the bus only departs when it is full, ensuring that the operator will always make maximum revenue on a given departure. With a scheduled system, Ecobus has to depart whether we have zero passengers or the 14 passenger maximum. We ran at a loss in the beginning, but it wasn’t long before our model proved its worth and we started running at 75-to-100-percent capacity for most trips.
AFKInsider: Do the buses only use filtered cooking oil?
Fáron Peckham: No. We are only able to collect about one ton per month, and we currently use about eight tons of total fuel. That means that we still need to use about seven tons of diesel. We have great collaboration from the formal sector, but unfortunately the informal sector is resistant to contributing oil to our recycling project. We are the only waste oil recycling project in the country. Without Ecobus that oil would be dumped into the ground, just as it was before we started oil collections in 2013. It would be nice to get at least a little support from the government. If they would instruct restaurants to contribute oil to Ecobus, it would be easier to get them to collaborate.
There is an ecological tax that flows to a supposed environmental fund that provides support for green projects like Ecobus. Under the previous administration we were not allowed to compete for those funds, and the money got siphoned off to political groups. Now a new government has entered power, so I’m hoping they take a more serious approach to preserving the environment, and hopefully collaborating with Ecobus.
AFKInsider: What has the response been from the people?
Fáron Peckham: The response to Ecobus was incredible. We thought it would take six months before reaching break even, but we got there in our third month, and were profitable in our fourth. Up until we got blocked from operating in Assomada we were capacity constrained, which is why I borrowed money to buy more vehicles.
People were furious when Mayor Tavares declared that we could no longer transport passengers out of Assomada. They would scream at the police, saying, “It’s our money! We can spend it however we want!” It probably didn’t help that the police were physically removing people from the buses. It wasn’t the police’s fault though. The orders came straight from Mayor Tavares.
AFKInsider: How many people do you employ?
Fáron Peckham: Ecobus employs 20 people full time (12 drivers, two bus-stop agents, a chief mechanic, two mechanics, an IT technician/programmer, a general administrator, and myself). We also have several part-time staff, and also contract repair work to specialists.
AFKinsider: What are some of the things you would change if you could start Ecobus all over again?
Fáron Peckham: I wouldn’t have trusted the local governments. The municipality of Praia, which at the time was run by the current Prime Minister Ulisses Correia e Silva, honored their word not to obstruct my access to the free market. The mayoral decree in Assomada has cost me $50,000 and counting. If I had involved the lawyers at the early stages and gotten everything Tavares promised in writing, he would have had much less room to maneuver when he felt it was politically expedient.
AFKInsider: What are some of the positives of doing business in Cabo Verde?
Fáron Peckham: The biggest draw to Cape Verde is opportunity. There are a lot of things that are done poorly that can be improved upon, and there are a lot of things that simply aren’t being done at all. If you can navigate the bureaucracy and don’t get railroaded for competing against some entrenched interest, there is plenty of space to innovate and effect positive change through conscious capitalism.