🚛 You can find out by reading this article!
1. You, the readers, might also have seen giant trucks parked illegally on the streets of your neighborhood at night. Most of them are parked illegally. A startup has emerged to solve this persistent problem of illegal truck parking. It uses idle properties like vacant lots, gas stations, factories, and warehouses as parking spaces for trucks, providing them with new value. How is this possible? Is it profitable? Connectors met with Seo Dae-kyu, CEO of BigMobility, which operates the truck parking brokerage service TruckHelper, to ask these questions.
2. BigMobility is a new company founded in June last year. In just seven months since its inception, it has secured 28 shared parking lot sites in Seoul, Gyeonggi, Chungnam, and Gangwon, providing paid parking services to 155 trucks. How did BigMobility manage to persuade the truck owners and landowners, who are not easily swayed?
3. In just seven months after its foundation, BigMobility generated revenue of 130 million won. This year, they aim to generate 1 billion won in revenue through national expansion. But here's the thing. What happens if, over time, the truck owners and landowners start dealing directly with each other, bypassing the middleman, BigMobility? Wouldn't BigMobility's expansion plans completely collapse? CEO Seo responded, "It's entirely possible, but not easy." We can understand the confidence of BigMobility in preventing the bypassing of intermediaries.
4. BigMobility does not intend to end as just a parking lot operator. This is because their biggest customers are truck owners. The more truck owners use TruckHelper's parking lots, the more limitless the potential for related business expansion. We can find out what companies BigMobility is currently collaborating with and get a glimpse of BigMobility's long-term big picture, along with their immediate focus.
Truck Owners Fear Tonight
You, the readers, might have commonly seen this. Just a bit outside urban and residential areas, large trucks parked on the side of main roads or in remote vacant lots. Sometimes, you might have felt inconvenience seeing trucks parked even in apartment complexes or on streets with significant pedestrian traffic. According to Article 21 of the Freight Automobile Transport Business Act, the overnight parking (parking for more than one hour between 12 AM and 4 AM) spaces for trucks are defined as 1) garages (private and public), 2) truck rest areas, and 3) freight terminals. Parking anywhere else, unless designated by local government ordinances, is considered 'illegal' and subject to a fine of 200,000 won (for general freight trucks). This is why the night parking of trucks we often see on neighborhood roads is likely to be illegal.
However, truck owners who choose illegal parking, whether intentionally or not, have their reasons. This is because there are not enough legal spaces to park their huge trucks near residential areas where they return after finishing their work.
According to the Ministry of Land, Infrastructure and Transport, the total number of registered trucks in South Korea was about 3,696,000 as of 2022, accounting for 14% of all vehicle types. Despite this, there are only 39 public freight truck garages currently in operation nationwide, accommodating parking for just about 10,000 trucks. Hence, truck owners, risking the imposition of fines, resort to the stopgap measure of parking their vehicles on less frequented roadsides.
But you know what? In regional areas, there are more vacant lands (undeveloped lots) than we think. Even real estates being used for specific purposes like gas stations, factories, and warehouses have vacant land at certain times. Can't we connect these neglected lands with no value to truck owners who need parking spaces? A company named BigMobility, founded last June, is currently doing just that. They operate a service called 'TruckHelper', which develops idle lands into exclusive parking lots for trucks. Recognizing the business potential, BigMobility successfully attracted seed investment from Bon Angels Venture Partners at the beginning of its incorporation. Within 7 months of its establishment, BigMobility surpassed a cumulative revenue of 130 million won. Currently, TruckHelper has secured 28 parking lot sites and is providing services to 155 trucks on a paid basis. Their customer churn rate is less than 3%. This year, they aim to achieve an annual revenue of 1 billion won.
Although the scale created by TruckHelper is not yet large, the secret of quickly winning the hearts of truck owners and landowners with idle land is intriguing. In fact, in the business structure, if the landowner bypasses the intermediary BigMobility and starts the truck parking business directly, it would be problematic, right? Connectors met with Seo Dae-kyu, CEO of BigMobility, to hear more about how they prevent or solve this bypassing issue.
☞The term "나대지 (裸垈地)" refers to a piece of land in a state where there are no buildings, structures, or any constructions on it. It is essentially an undeveloped or vacant plot of land.
After its establishment, BigMobility surpassed a cumulative revenue of 130 million won in just seven months. Currently, TruckHelper has secured 28 parking lot sites and is providing services to 155 trucks on a paid basis. The customer churn rate is reported to be less than 3%. This year, they aim to achieve an annual revenue of 1 billion won.
Although the scale created by TruckHelper is not yet large, it's intriguing how they were able to quickly win the hearts of truck owners and landowners with idle land. In fact, there's a potential issue in the business structure: if landowners bypass BigMobility, the direct intermediary, and start their own truck parking business, it could pose a problem. How BigMobility prevents or solves this bypassing issue was a matter of curiosity. Connectors met with Seo Dae-kyu, CEO of BigMobility, to hear more about this.
The Method of Winning Over Truck Owners
CEO Seo, before founding BigMobility, was in charge of new business planning at Hankook Tire. From that time, he strived to become the person who best understands the minds of truck owners in Korea. He saw an opportunity for a new business as he believed that no other company or service had analyzed truck owners from the customer's perspective. He conducted interviews with about 240 truck owners, including commuting together. This effort has continued even after the founding of BigMobility.
As a result, CEO Seo discovered that the concern for parking space is significant for owners of medium to large trucks over 5 tons. Although parking small trucks of less than 1.5 tons in parking lots is not legally problematic, the situation changes when it comes to operating large trucks exceeding 1.5 tons.
"The number of public garages is woefully insufficient to accommodate the total number of trucks. Particularly for large freight trucks that are the main customers of TruckHelper—weighing over 5 tons, over 3 meters high, and over 10 meters long—finding a legal parking space is as difficult as finding a star in the sky.
Thus, these truck owners are forced to park on the roadside, a situation akin to crying and eating mustard, despite the risk of a 200,000 won fine for complaints and getting caught in late-night inspections. They have to leave their trucks, worth hundreds of millions of won and crucial for their livelihood, in deserted places, always anxious about potential problems.
Additionally, upon returning from a trip, they might find a 'No Parking' sign where they used to park, or another truck may have taken the spot, forcing them to spend an average of 30 to 40 minutes finding a new parking space. Once parked, they often have to take a taxi to where their personal car for commuting is parked. This is a tremendous source of stress for truck owners, and such inconveniences are repeated daily," - Seo Dae-kyu, CEO of BigMobility.
According to CEO Seo, no truck owner wants to sleep in their vehicle. They have a need to commute to and from the parked truck using a fuel-efficient personal car. For example, they drive their personal car to where the truck is parked, start their truck operations, and leave the personal car there. After completing their operations, they park the truck and return home in their personal car.
However, freely operating in this way in illegal parking spaces like urban roadside areas is not easy. Hence, BigMobility judged that truck owners would be willing to pay for exclusive parking spaces.
In fact, TruckHelper operates in line with the commuting patterns of truck owners. Truck owners pay a monthly fee of about 200,000 to 300,000 won through automatic credit card payments, allowing them to use exclusive parking spaces near their residence provided by TruckHelper. These spaces can accommodate both their personal car and the truck. When the truck is out for operations, the personal car is parked there, and vice versa.
Perhaps due to this intuitive convenience, word of mouth about TruckHelper has been spreading among truck owners. Collaboration with institutions including the National Transport Business Association is planned. Companies are also contracting multiple parking spaces through TruckHelper for the welfare of their dedicated truck drivers. Binggrae, for example, is using this method for the welfare of freight drivers of its logistics subsidiary Zette.
Landlords Witness the Revival of 'Dead Land'
The consistent parking demand from truck owners perfectly matched the needs of landowners who became partners and service providers with TruckHelper. Commonly referred to as 'dead land' or 'rotten land' in the real estate industry, these properties began to generate unprecedented steady income by transforming into truck parking lots.
Currently, BigMobility operates truck parking lots in one location in Seoul, about 20 in Gyeonggi Province, and others in regions like Chungnam Dangjin, Cheonan, and Gangwon Hongcheon. These parking lots are developed slightly outside of urban areas within these regions. It is explained that in the outskirts of the metropolitan area and provincial cities, it is easy to find vacant lots (undeveloped lands) suitable for truck parking with just a 5-10 minute drive from residential areas.
"Why do vacant lots remain vacant? Constructing buildings or parking towers for car parking on these lands is not profitable at all. Especially in times of economic downturn, the number of undeveloped and unused lands continues to increase. Even a regular car parking lot requires an initial investment of over 100 million won for a 500-pyeong (approximately 1,650 square meters) area, which is a significant burden.
In contrast, the investment cost for setting up a TruckHelper truck parking lot is very low. It only requires basic ground work with stone foundation and demarcating parking spaces with ropes. Even without installing unmanned barriers at the entrance, the combination of being located on the outskirts of the city and the monthly fixed parking method has allowed for smooth operation so far.
In other words, from a landowner's perspective, this approach minimizes investment costs while generating a steady monthly income from land that was previously unused. Therefore, TruckHelper is playing a 'filial' role for the landowners, and currently, we are experiencing smooth inbound business with landowners introducing other nearby landowners to us," - Seo Dae-kyu, CEO of BigMobility.
The real estate industry deems 'dead land' as detrimental to landowners for two primary reasons: firstly, the increased official land value leads to higher property taxes, and secondly, the potential disadvantages during land sales due to neglect in land management. For example, if someone were to build a temporary structure on the neglected land, reside there, or use it as a garden and then claim ownership, it creates a problematic situation. In this context, TruckHelper emphasizes the dual benefit of generating income from dead land while also managing it effectively.
BigMobility contracts with landowners in two ways. First is the direct operation model, where BigMobility pays a fixed monthly rent to the landowner and operates the parking lot themselves. The second is the consignment model, where landowners receive a commission based on the parking lot's revenue. Simply put, vacant lands are managed directly by BigMobility, whereas parking lots utilizing idle land from existing commercial properties like gas stations, factories, and warehouses are operated on a consignment basis.
Regardless of the model, landowners can generate new income from truck parking lots without any additional operational effort. Due to this, BigMobility reportedly receives dozens of calls daily from landowners wanting to use their land for truck parking. Relying solely on inbound matching, without any external sales efforts, BigMobility is confident they can expand nationwide, focusing on metropolitan cities, within the first half of the year.
What if TruckHelper is Bypassed?
But what if truck owners and landowners start to transact directly, bypassing TruckHelper? They could choose a path where truck owners park at a lower cost and landowners earn more rent, especially in an era where direct transactions are becoming common in various platform services and real estate through online platforms.
In response to this, CEO Seo stated that 'it could certainly happen, but it won't be an easy choice.' He explains that this is due to the unique characteristics of the logistics and freight transportation market.
"Currently, local truck owners are already forming direct transactions by collectively renting vacant lots near residential areas as parking spaces. However, there are two main reasons why direct transactions between truck owners and landowners for parking spaces are not easy.
Firstly, the workload and fatigue of truck owners. Truck owners, who spend an average of more than 14 hours a day in their vehicles, lack the time and energy after work to search for idle lands, visit real estate agents, examine various conditions, and draft contracts. Moreover, it's common for parking arrangements made in such a way to fall through suddenly due to an influx of complaints. This leads them to avoid the complex processes required for direct transactions.
Secondly, landowners tend to be reluctant to contract directly with truck owners. The freight transportation industry still carries a somewhat rough image. Also, facing a large freight truck can be intimidating, and starting to allow them on their land can be worrying due to lack of knowledge, concerns about ground damage, oil spills, etc. The fact that most landowners are over the age of 50-60 also plays a role.
In this situation, TruckHelper assists with drafting contracts and various customer service tasks. It also provides automated online-based services for payments and settlements. Furthermore, it can offer sufficient guidance in case of any legal disputes, allowing both truck owners and landowners to trust and use the service," - Seo Dae-kyu, CEO of BigMobility.
In fact, BigMobility's rush to expand nationwide in the first half of this year is also related to the bypassing issue. Since TruckHelper is currently a service without significant competitors in Korea, there's an intention to quickly expand its influence to set standard prices.
By achieving economies of scale in terms of the number of parking lots and parking ticket sales, BigMobility anticipates gaining a clear price advantage over any potential competitors that may emerge later. Furthermore, they believe that based on economies of scale, they can offer conditions more efficient than direct transactions between truck owners and landowners. The more truck owners use TruckHelper, the greater the bargaining power to secure competitive rates becomes.
CEO Seo emphasizes that TruckHelper is a service that benefits both truck owners and landowners. Furthermore, it can also be advantageous for local governments. According to BigMobility, local governments are plagued daily with complaints about illegal truck parking, as mentioned earlier, and struggle with a lack of enforcement personnel. TruckHelper essentially provides an alternative to illegal parking.
Consequently, BigMobility has experienced active cooperation whenever they reach out to local governments for inquiries or collaboration requests. In particular, CEO Seo added that they have been continuing collaboration meetings with local governments, especially in relation to the establishment of logistics complexes in Gyeonggi Province, focusing on providing truck parking facilities.
Beyond Parking Lots: Exploring Further Opportunities
BigMobility, moving beyond its core business of parking lot brokerage, envisions expanding into various services targeted at truck owners. They are already conducting a Proof of Concept (PoC) with 'Truck's Dignity', a company that offers mobile car wash services for trucks. Additionally, they see potential in adding and linking various services such as vehicle sales, truck maintenance, tire replacement, and advertising insurance and loan products.
This expansion is feasible due to the common target audience of truck owners shared between BigMobility and these service companies. They anticipate creating synergies by sharing the truck owner network and boosting sales of each other's services. BigMobility is already receiving partnership inquiries from various companies offering services to truck owners, which evidences this potential.
However, BigMobility is not focusing on these additional services at the moment. As the company is still in its infancy, having been established less than a year ago, their primary focus remains on strengthening their core business of truck parking lot brokerage. Let's conclude this content with CEO Seo's aspirations related to this focus.
"We are receiving partnership inquiries from various companies, both large and small, that are involved in truck and truck owner-related businesses. Particularly, since truck owners are also personal car owners, the potential for expanding our services is limitless.
However, our immediate focus is on what BigMobility does best. Before expanding into additional services, we need to first secure a nationwide network of truck parking lots. Our aim is to become the largest truck parking service provider in Korea.
In the freight transportation market, the proportion of leased trucks is larger than company-owned and rented trucks. According to our estimates at BigMobility, about 10% are company-owned trucks, around 30% are rented trucks, and the rest are all leased trucks.
These leased trucks also face a significant shortage of parking spaces. We aim to grow this market to a scale of 1.5 trillion won, and we want to capture 80% of that market share. With the increasing support and encouragement from truck owners, we plan to rapidly expand our services to alleviate their inconveniences." - Seo Dae-kyu, CEO of BigMobility
Written by Shin seungyoon. He is currently working as an e-commerce logistics specialist journalist at BEYONDX(CONNECTUS).
If you have further inquiries about BigMobility and CEO Seo Dae-kyu, please contact BEYONDX(CONNECTUS) at firstname.lastname@example.org.