Must know the costs before launching your scooter-sharing company!

If you walk down the street during busy hours, you’ll see many e-scooters zooming through the side streets. The e-scooter rental business is among the most popular and most adopted transportation modes. The entry barrier, set fixed cost, and growing demand have resulted in the boom of scooter share companies across the globe. However, starting the scooter rental business and growing enough to take your electric scooter company in the share market is a different story. Understanding the cost and its recovery is essential for any business. That’s what we will discuss today: the cost of starting and running a scooter-sharing company!

What is a scooter-sharing company?

Micro-mobility is a world of its own where personal or single-user vehicles are rented. Sharing scooters (mostly e-scooters) and bikes is the most prominent and profitable micro-mobility solution in the market. The lower cost of renting, the comfort of traveling without hassle, and fast ETA have been the significant benefits of the growth of scooter share companies. 

The current value of the scooter-sharing market is $1.9 billion, and it is set to become a $8.3 billion market by 2034. Many businesses find this market lucrative because the entry barrier is relatively low, and many governments offer a reliable ecosystem for scooter-sharing companies to thrive. Therefore, you must consider different markets and the cost variations in the targeted market to know where you can recover your initial capital (upfront cost) and make more profit. 

What is the cost of starting a scooter sharing company?

What’s the first requirement of starting any business or converting an idea into a scalable business model? Cash! Or more like the working capital that keeps the company afloat daily. It is the building block of any business. However, like every other resource, financial resources are less. Most importantly, they are volatile and flow in the blink of an eye. Therefore, in a capital-intensive business where you focus on sharing a scooter, you need to count each penny. 

But how do you know what costs to count? Or, more importantly, how do you count your costs? We know the struggle of listing down every cost, especially when you offer such a tricky service. So, Squillion Tech, experts in micro-mobility tech, want to make the work easy for you. We have worked with many scooter-share companies and have used our knowledge to create a list of costs that you must consider when starting your scooter-sharing company. 

First, you need to understand the essential contribution of various scooter-share service elements to the cost of the ride. We will understand these elements as the Service charge, Maintenance Charge, and Customer charge. 

• Service Charge: This covers all the charges necessary to provide your services, such as the scooters, IoT devices, fleet rebalancing, and scooter-sharing system. 
• Maintenance Charge: This includes all the charges incurred to provide impeccable services that keep the riders coming back, such as fleet recharge, device maintenance, and cleaning. 
• Customer Charge: This includes all the charges of attracting, engaging, and retaining customers with enticing offers, effective rental system setup, and customer support. 

We will use Atom Mobility’s cost breakdown. 

From this, we can understand that maintenance accounts for a whopping 34% of the total cost. Therefore, you must focus on scaling your scooter-sharing company enough to offset the costs. 

However, understanding these costs can be tricky. Therefore, we are here to help you with a breakdown of these costs in terms of fixed cost (a constant or one-time expense) and variable cost (changes with the size of your fleet). 

Fixed costs in scooter sharing company:

Fixed costs occur once a business is started. Often, they are the most significant part of the capital necessary to start the business. However, investing in these assets helps you not only cover the cost but also secure hefty profits in the long run. 

Scooter acquisition 

Imagine starting a cafe without coffee beans or a brewing machine—it seems impossible. That’s what it’s like to start a business focused on sharing scooters without a scooter in sight. Therefore, the first significant cost factor is acquiring the scooters to give on rent. You need to thoroughly analyze scooters from scooter companies to find which scooter company is best and provides profitable deals and quality assurance. Remember, a costly scooter that lasts you years is better than a cheap one that barely lasts months. 

Software and app 

There was a time when people used to write receipts with their hands and manage orders manually. However, with the growing demand and declining free time, you can’t waste resources and waste your user’s time. That’s where the intelligent scooter share system can make your operations manageable and less time-consuming. The scooter share system includes software for admin and a customer application. 

So, Scooter-Sharing Software helps manage and rebalance your scooters on the field for maximum ROI, monitor your scooter performance, and offer customer support. On the other hand, a scooter-sharing app is essential to reach your target audience and offer them your services directly and use it as your marketing tool to engage and retain users. 

Therefore, one of the essential investments in your business is setting up a reliable scooter-sharing system. You can connect with a reliable E-Scooter Sharing App Development Company like Squillion Tech for an efficient establishment of the scooter-sharing system for effortless management. 

Pro tip: Instead of developing scooter-sharing software and apps from scratch, you can subscribe to software like Squillion Tech provides. It helps you benefit from a specialized app created to help scooter-share companies like yours without spending a hefty sum and the maintenance cost that comes with it. It reduces the overall cost, increasing your profit margin. 

Licenses and permits 

You’ll need a zillion permits and licenses to run your scooter sharing company without causing trouble with local authorities. Essential permits and licenses include registration of your business, registration of the scooters you’ll own in this business, local authority rules compliance, traffic rules compliance, and more. So, understand the target market and the rules and regulations for the scooter sharing company. 

Rental spaces 

Your scooters are on the road all day! They need to rest and be thoroughly maintained for a longer lifespan and better ROI. Therefore, whether you plan on a dockless scooter sharing business or docked, you’ll need a storage space to hold your scooters when they are ideal or need maintenance. Remember, the first rental space might be a fixed cost. However, as you grow your business, the rental space will change, and so will the cost associated with it. 

Initial Marketing 

You’ll need to focus on marketing your brand the most in the initial 3-6 months to make a space for yourself and retain the users. From local marketing and social media to reward points and discounts, you’ll have to spend a reasonable sum on marketing your scooter sharing company to attract the target audience, especially in a competitive market where players like Bird and Lime. 

Insurance 

Insurance is your life jacket when running a scooter-sharing company. Scooters are prone to vandalism and theft, so never skip these costs. The short-term expense can pay off in the long run. You must secure your assets by comparing various insurance alternatives and their benefits before making the final decision. 

Variable costs in scooter sharing company:

The variable costs in the scooter-sharing business include those expenses that increase as your fleet size grows. They are often a significant part of your daily cash flow. So, ensure to consider these when you are creating your first 6-month workflow and gathering the capital. 

Charging e-scooters 

The e-scooters are most known to be an eco-friendly alternative for transportation. It depends on electronic batteries rather than the precious fuel. Thus, it leaves less carbon footprint and no harmful gases. These batteries need to be charged regularly for an effortless experience. Therefore, the cost of charging depends on how frequently you’ll need to charge, the electricity price, and the taxes you need to pay. You’ll need to consider the energy consumption of the scooter for high ROI. So, do your research to find which scooter company is best in terms scooter milage, battery usage, and overall performance. 

Maintenance 

Maintenance is the key to a long lifespan for your scooters. With regular checkups and changing of tires, breaks, and other maintenance, you can get the most out of your scooter. However, in a rough infrastructure environment, the maintenance schedule and tasks will increase, affecting the cost and ROI of the scooter investment. 

Fleet management team

Your team is one of the most vital and significant pillars of keeping your business intact. The team includes your marketing experts, technical specialists for fleet maintenance, labor for rebalancing fleets, and more. The cost of hiring your team and specialists for regular maintenance increases your cost as your fleet size grows. You can partner up with other firms to help you manage the cost and get the best services to help you improver your performance and the ROI on scooters. 

Payment processing fees 

We all live in a digital world where everything is becoming digital. Fintech has been a booming market, leading to diverse online payment alternatives. As your customer-based business diversifies, you’ll need to adapt to customers’ needs. Payment processing often charges you a small sum. Therefore, based on your daily transactions and various payment alternatives, you’ll need to consider that cost when deciding the price for the scooter share rent. 

Data management 

Data is the backbone of your business. It helps you understand your market, fleet performance, customer preference, your rider’s pain points, and many more. The insights from data are vital for forming effective operation management and marketing strategies to grow your business. Therefore, you must invest in cyber security to safeguard your data and system. With subscription-based software offered by Squillion Tech, you can protect your system and draw valuable insights from the data. The AI-integrated system makes live navigation easy for users with a prediction mechanism and also creates reports on the spot. 

Promotional offers 

It is the hidden cost that most people tend to ignore. To run your business, you need to have customers. However, in competitive markets like scooter sharing, promotional offers and discounts can be a game changer. However, you need to consider them as a part of your variable cost because it change with the size of the fleet and how varies with market trends. 

These are the costs that one must consider when establishing a scooter sharing company. The focus should be on choosing the sharing scooter with effective admin software and customer app. We, Squillion Tech, can help you reduce your costs by a large proportion by offering our electric scooter-sharing software and app on a subscription basis. Enjoy the benefits of having a scooter sharing system without any worry of maintenance and bugs. Manage your fleets and serve customer support from your office! Contact us to know more! 

Conclusion 

Make your scooter sharing company profitable by understanding your cost and how you can save some bucks. The scooter share companies have high variable costs like maintenance cost of the scooter, team building for managing operations, creating lucrative offers, and recharging the scooter for better performance. Additionally, they have large-scale fixed costs, including the cost of acquiring suitable scooters to fit your business needs, investing in the scooter-sharing system, getting a license, and having a space for easy maintenance. Are you looking for a reliable partner for scooter rental software development? Well, you are in the right place. We are a scooter sharing software and app development company. Squillion Tech specializes in the mobility industry and thus offers personalized designs to help you ace and establish your business with a robust system.