Many blogs discuss how to start an electric scooter rental business, but a few tell you what not to do. We know that starting a business is difficult for entrepreneurs on various levels. So, the following is the list of things you need to remember when you create your electric scooter rental business plan and execute it. From our experience with the scooter rental companies, we have been able to create a list of 10 challenges they have focused on to achieve success. So, read this blog till the end if you want to start a scooter rental business.Â
Top Challenges to Consider Before Starting a Scooter Rental Business
Poor Product-market mismatchÂ
In general, 34% of startups are failing because of a product-market mismatch. But, what does product-market mismatch mean? Well, imagine selling a sweater on a beach, the chances of someone buying a sweater are slim. The results are lower sales and more losses. It is known as a product-market mismatch.Â
In the scooter rental business, you must understand how the target market in the selected location operates. Avoid choosing an area that relies on personal vehicles or cars. These areas are less likely to adopt mobility scooter rental business. Furthermore, the lower population or age of the people plays a vital role in the success of a scooter-sharing business.
So, product-market research should be your priority when creating an electric scooter rental business plan. Focus on understanding the needs of your local target audience and identify hot-spot locations for public transport. Additionally, consider the security and possible threat of vandalization in the locality before selecting a location to start your mobility scooter rental business.Â
Infrastructure support for E-scooter rentalÂ
Imagine you have a stellar recipe that will win everyone’s hearts at a family dinner. But, as you start with the cooking process, you realize there is no gas! Here, you lack the infrastructure support one needs to create a stunning dish. Similarly, you need supporting infrastructure to achieve success in your electric scooter rental business.Â
The city infrastructure must support e-scooter rental businesses and have appropriate lanes and parking for them to thrive. Lack of supportive riding lanes and parking can limit the speed of scooter rides, delays in reaching the location, potential accidents, parking tickets, and navigating heavy traffic. Many governments in developed and developing countries like India and South Korea are adopting e-scooter-friendly infrastructure to build a more sustainable mode of transport.Â
North America has a major market share for the electric scooter rental business with a 40% share. Other countries in Europe, Asia-Pacific, South America, and Middle East, and Africa follow North America. So, conduct market research to understand what infrastructural support you have to thrive with your mobility solution.Â
Understanding of the government regulationÂ
The scooter rental business must abide by the scooter rental rules of the ruling government. Through the years of scooter renting, there have been some major issues faced by the company, government, and the public themselves. Most of these concerns revolve around parking space, rash driving, public safety, and management. Therefore, the local government often imposes scooter rental rules to ensure public safety.Â
Before entering any market, look up any rules related to scooter parking, speed, helmet and license requirements, and the number of scooters owned by a single scooter rental business. For example, Paris has banned the e-scooter rental business due to fatal accidents, haphazard parking, and rash driving. In the USA, you need a license to ride an electric scooter. So, you must verify users’ licenses before allowing them to rent your e-scooter.Â
The high initial funding requirementÂ
Starting a scooter rental business is anything but a walk in the park. It requires huge capital to buy reliable e-scooters and maintain them. Additionally, you need investment to market your rental business. However, securing such large capital is a game of its own with many hurdles and rejection. While you can secure capital, using that capital and earning back that capital takes significant time.Â
In addition to securing the funds, you need to focus on earning back the funds. That’s where most businesses struggle. The market demand, brand credibility, and marketing might make it difficult to help you reach a break-even point. Profit earning is a secondary matter if you haven’t met your break-even point. It takes almost 3-4 months to reach a break-even considering the maintenance cost. Keep these challenges in mind while you plan marketing strategies and other business operations for the first six months of your business.Â
You might be wondering, how much rent should I charge for my e-scooter rental business. Well, the charges will vary based on your location and taxes. Thus, when you are setting the rental fees, you must consider the following few factors that add up to the cost of renting out the e-scooters.Â
- Minimal operating charge for riding a scooter
- Taxes applicable on the scooterÂ
- Insurance amount for the scooterÂ
- Maintenance costsÂ
- Profit marginÂ
Existing and potential competitionÂ
The global bike and scooter rental market is expected to grow by 16.8% by 2030. In many countries, the scooter rental businesses are thriving. Companies like Bird, Lime, and Spin dominate the scooter rental business globally. Therefore, entering a competitive market can be difficult and affect your returns in the first few months of establishment. You need to understand what they are offering and strategies that worked for them. Create a plan such that it sets you apart and effectively captures your target audience’s attention.Â
Competition is not limited to just the existing players. The industry is growing and many people are venturing into the e-scooter rental business to make a profit. For example, Voi, a Europe-based micro-mobility startup with e-scooter rental services raised $85 Million in funding within one year of establishment. Thus, you need to look out for promising startups to keep your market presence intact.Â
Consistent maintenance costÂ
The scooters are the soul of a scooter rental business. So, for a successful business, you need to maintain the scooter for optimal performance and longevity. Maintenance takes up many resources like time, money, and staff. However, with proper care, you can make the scooters last longer. Invest in rechargeable or swappable batteries for your scooter to keep the expenses in control. Additionally, you need to mend the damage and check if each part of the scooter is working well based on the scooter rental rules of the local government.Â
Maintenance cost is a constant in your business. So, manage your finances and marketing such that you can easily secure enough funds to maintain the electric scooters for maximum customer satisfaction.Â
Security of the scooters on the roadÂ
Vandalization and stealing are the major setbacks of starting a scooter rental business. Furthermore, it is seen that users haphazardly park the scooters in risky places rather than a specific parking spot. Both of these have made the security of the scooters a major concern. Therefore invest in quality trackers and locks to set a layer of protection for your scooter.Â
E-scooter-sharing App Development companies can help you integrate such locks and GPS tracking into your system. It will help you track your scooter’s location in real-time and remotely lock the device in case of theft or danger.Â
Educate your target audience with appropriate parking guidelines for parking safely.Â
Connecting with your customers through an app!Â
Establishing a connection with your target audience is essential for the success of your scooter rental business. Most newly established rental businesses struggle with this because of the competition and proper communication channels. To run a scooter rental business you’ll need a user-engaging scooter rental app that attracts and retains users.Â
The Best E-Scooter App Development Company is the one that helps you create an app with an engaging user interface to enhance user experience. You can use this app to offer special offers and attract more users. Furthermore, through the app, your users can communicate about the issues they face. Thus, you can improve your offering and boost customer satisfaction.Â
Building an efficient teamÂ
A skilled team can make a huge difference in how your scooter rental business operates. You’ll need a team that can handle your operations, tackle the technical aspects of an app, market your brand, and manage your fleet. Finding the right candidate with industry experience who can understand your vision can be difficult.Â
While administrative jobs can be filled in easily, marketing and technically skilled candidates are difficult to find. You’ll need someone who understands how the scooter rental market works in the locality and plans effective strategies. Furthermore, you’ll need a tech person who can manage operations like app usability, tracking scooters, handling scooter-sharing software, and more.Â
Adapting the market trendsÂ
The scooter rental market is changing rapidly. With the development of AI, IoT, and smart apps, it becomes essential to adopt newer technology for better performance. Integration of IoT has made navigation and tracking easy for scooter rental businesses. AI enhances the live route optimization, data management, and report generation possible in real-time. Therefore, it can be a hassle to keep up with the technology and update your service offerings. A reliable partner like Squillion Tech can help you set up a scooter rental management system to streamline your operations!Â
Who is Squillion Tech?Â
Squillion Tech offers ready-to-use Scooter Sharing Software with a customizable user app to the scooter rental business. Through the software, you can rebalance your fleet as per market demand, track your scooter, offer customer support, create reports for analysis, and manage your inventory and live maps. The app is designed to offer a seamless user experience and communicate with the customer. The app can be rebranded to help you build your brand image.Â
With Squillion Tech you get:
- Expertise in automation of scooter rental business Â
- User-friendly software and appÂ
- Useful insights and advanced analytics Â
- Real-time update about scooter location
- Access to trends to rebalance your fleetÂ
- Consistent customer supportÂ
- Tech team to adapt to the market trendsÂ
- Consistent customer supportÂ
Let’s talk more about how to enhance your project and avoid some common pitfalls for app and software management. Contact us now!!Â
ConclusionÂ
If you want to find an answer to ‘how to start a scooter rental business?’, you are in the right place. There are a few hindrances that most scooter rental companies face when starting a business. It includes understanding the market and its demand to managing your customers through an app. Raising funds and adapting to market trends are the essential steps for the survival of the scooter rental business. Understanding the government regulations and competitors can help you boost the longevity of your business. Building an efficient team can help you manage your fleet better and provide security to your scooters on the road. So, before you start a scooter rental business you must consider these aspects!
