Demand is a volatile concept that changes per the users’ needs. However, there is one thing that will never go out of demand, especially in this economy: affordable transportation. In modern cities, roads are buzzing with people and vehicles approaching their destination. Still, the need for affordable and fast transportation has boosted the scooter rental business. The scooter rental services create different revenue models with perks and drawbacks. This blog will discuss diverse revenue models for the e-scooter rental business.
How do e-scooter rental companies work?
The e scooter rental companies offer a fleet of e-scooters to the users on rent. The users can find the scooters nearby using a scooter rental app. The IoT and e-scooter rental software allows users to unlock and ride the scooter to their location. The calculation for their rent starts from the moment they unlock the scooter and ends when they reach their location.
A standard pricing model used by most e scooter rental companies is having standard (base) fees to unlock the e-scooter followed by fees incurred based on the distance traveled or time spent driving the scooter. It is one of the most practical pricing systems widely adopted by global scooter rental businesses like Lime, Bird, Spin, and more.
The pricing for the e-scooter rental service may vary based on the cost elements. A few notable cost elements are the price of e-scooters, permits, insurance, maintenance, staff, depreciation, and more. So, remember these points when you are finalizing the price for your scooters and choosing the revenue model for your mobility scooter rental business. Let’s talk about the revenue models used by industry leaders.
The revenue models for e-scooter rental business
The revenue models help you create a structure to offer your services and the profits you can generate. However, understanding these revenue models is essential for customer retention and maximizing potential profits! Let’s understand the business models relevant to the revenue models.
Pay-per-ride revenue model
If you are wondering how to start a scooter rental business in a busy area, the pay-per-ride model might work best for you. In this model, the riders pay for each ride based on the distance they have traveled or minutes of their traveling. They’ll pay the fixed charge for unlocking the scooter and pay for the ride after reaching their destination.
The pay-per-ride revenue model is perfect for the e-scooter rental business in busy areas where the riders want a quick and affordable transportation option. It might be a busy market or near a tourist spot. The single-ride charge model helps you maximize the revenue as the riders pay the total amount for each ride. It enables you to utilize the fleet’s potential and target a larger audience.
Subscription revenue model
The mobility scooter rental business is designed to enable the riders to reach their destination quickly and for relatively less bucks. In the subscription revenue model, you offer a fixed-price subscription to the riders weekly, fortnightly, or monthly. It allows the riders to access the e-scooters whenever they want without the hassle of paying when the ride ends.
Through the subscription model, you can attract and retain long-term users. This solution is much more affordable and beneficial to the riders when they are running low on time and want to save some money in travelling. Riders like regular office workers, students, or daily commuters will most likely subscribe to your scooter rental business.
Subscription based revenue model is perfect for short-distance travel for regular commuters. It benefits both the e scooter rental business and the riders. It eliminates the step of paying at the end and saves time when the riders are running late.
Group ride revenue model
Traveling through the busy streets is fun with friends (or friendly colleagues). Therefore, offering a group ride system allows you to attract more users and tap into a new customer segment. In the group ride model, you allow the users to unlock multiple e-scooters in one go. It helps them save time and avoid the hassle of making individual payments. A few clicks is all it takes to unlock the e-scooters to enjoy their group outings.
It is perfect if you target a tourist spot or near hangout spots in the city. The group ride is perfect for family outings. With a discount on additional scooters in the group, ride helps you attract more users. Quality service can help you increase your users in the future.
B2B partnership revenue model
Who said you need to be on the street to earn hefty revenue? Partner with businesses or organizations to offer exclusive e-scooter rental services to their members. You can join hands with a business firm, hotels & resorts, university, or other organizations that need micro-mobility solutions. For example, the business might need scooters to allow employees to move across the business complex and production house. The same is true with tourists in hotels & resorts and the students and faculty in university.
With a B2B partnership, you can earn hefty revenue and consistent customers. It helps you create a brand image for yourself and create brand credibility.
Advertisement revenue model
Offering service to your users is not the only source of revenue. You can rely on advertisements to generate revenue. What do we mean by ads? We are talking about offering a platform to other companies to promote their brand to your users. You can opt for in-app advertisements or on-scooter advertisements through the brand logo. So, if you have a large user pool and offer an advertisement platform, the brands will pay you creating a passive income stream for your e-scooter rental business.
How to choose the suitable revenue model for your e-scooter business?
We know that choosing a suitable revenue model can be tricky. You might want to select each of these revenue models, but it’s difficult to assemble it, and the financial burden is a little too hefty if you are just starting your e-scooter rental business. So, here is a quick guide to help you choose a revenue model suitable for your scooter-sharing company based on your resources and market trends.
Understanding your target audience
The customer is your emperor! Understand the demographics and needs of your target audience, aka your riders. You must choose a revenue model that aligns with the user’s demand.
For example, pay-per-ride near a university could be expensive for students living off packed food and noodles. Therefore, a subscription-based revenue model is more suitable. Similarly, a pay-per-ride revenue model is ideal for tourist spots.
Calculate your operational cost
Cost is the main component of your revenue model. You should calculate all the necessary costs and ensure that the revenue model helps you cover that cost at the least. You must consider E-scooter sharing app development costs, scooter purchase charges, maintenance charges, staff wages, insurance, and other fixed and variable costs. Based on the base price you must charge for scooter rental service, you can select whether you’ll recover that with a pay-per-ride or subscription model.
Decide your revenue streams
You must create passive revenue streams to survive off-season and low-demand days. It helps you keep the business afloat and build a brand reputation. Some popular revenue streams include in-app advertisements, sponsorships, and corporate partnerships. You can choose which revenue model helps you attract relevant users based on these streams.
For example, when you offer subscription-based services near a university, you’ll attract students. So, you can attract businesses who want to target their ads to the students.
Test the revenue models
Finding the right revenue model becomes more accessible by testing it. Choose a location and revenue model and test it for a few months. After getting the results for each model, you can compare it. Thus, you can have data-based insight into which model suits your market. You can enhance your service by tracking and analyzing user behaviour through this testing.
Choose the most beneficial model
Now that you have the relevant data and insights, you can choose the best fit for your business. For maximum revenue, you can combine the revenue models. However, it is tricky, but once you master rebalancing your fleet to meet the demand, you can earn like a pro. Start with the model that gets you the most revenue. After settling and building a brand image, you can combine the other models and expand your business locally and globally.
Squillion Tech: Your partner in boosting customer satisfaction!
Squillion Tech is a scooter rental software company. We are focused on creating Scooter Sharing Software and apps for scooter rental businesses to streamline operations and better customer management. Our team of experts in micromobility solutions creates robust and user-friendly software to offer a smooth rider experience. The user app includes an engaging user interface designed to make navigation easy.
Our scooter rental service helps you:
- Manage multiple revenue models
- Track rider behaviour and preferences
- Optimize travel routes using AI
- Manage and rebalance your fleet
- Conduct in-depth data analytics
Do you want to know how to start an electric scooter rental business in a few months? We can help you! Contact us to know more.
Conclusion
The revenue model is the core of any e-scooter rental business. Choosing a suitable revenue model is crucial for the longevity of your scooter rental business by retaining the users. The pay-per-ride revenue model is suitable for short journeys or one-time use. The subscription-based model is perfect for regular rides on a budget, suitable for students and commuters. The B2B partnership is suitable for hefty profits and consistent usage. Understanding your audience, market trends, and results of pilot testing each revenue model can help you choose the best fit for you. Use other revenue streams like advertisement for added revenue for your e-scooter rental business.
