Shared electric scooters, e-bikes and mopeds are all the rage these days in cities around our the world. They are fast, fun, and enjoyable and can be used for general transportation, sightseeing, fun with friends, and more.
Thanks to advancements technology, an electric scooter can be rented through an app with no or limited person-to-person, face-to-face interaction. Users simply find a scooter somewhere on the street, scan a QR code with their phone or type in a numerical code, hop on, and they’re on their way. When they’re finished, they can pay in the same app and continue on with no time wasted.
Due to the popularity of these vehicles and others like them, many people wonder what it takes to start an electric scooter company. to most it seems like an easy and lucrative business to run to the casual observer, and in reality and for the most part, it is as long as you have the right partner.
Read on to learn everything you ever wanted to know about starting an electric scooter company of your very own. Hopefully this post will answer many of the questions that you likely have and may even inspire you to get started. Good luck!
Why We Need Electric Scooters, E-bikes and Mopeds
Shared vehicles aren’t a very new concept. But like the rest of us, you’ve probably started noticing them more and more a few years ago when they first became available in 2017/2018.
The emergence of these simple and affordable transportation methods should not be surprising to anyone. Their invention and quick popularity growth were due to a perfect storm of a number of factors. First, traffic around the world is always increasing. Today, more and more people seek new ways to transport themselves from place to place in a way that avoids it all together. E-scooters, e-bikes and mopeds allow people to get around that traffic and to reach their destinations faster and easier.
Second, many people today are conscious of the importance of sustainability and wish to protect the environment in every way that they can. Why take a car on a short trip somewhere when you can instead ride an electric scooter anywhere you wish to go? These scooters and other micro-mobility options are better for the environment and that makes many users feel good about their transport choices.
There are other factors, too. Some people take public transportation but the existing stops don’t always match up with their final destination. An electric scooter, electric bike or moped is a great option for that last mile or so. For some, electric scooters and their counterparts are a wonderful solution when someone is feeling tired or a little lazy (we’ve all been there) but needs to get somewhere. They are also a great way to sightsee in a new city without ending up with sores on your feet.
Most important of all, though, is the fact that electric scooters and other micro-mobility transportation methods are just plain fun to ride. Everyone who sees one of these vehicles on the street wants to give it a try, and by now, almost everyone has.
Remember, too – this concept would not even have been possible a decade ago. Technology is growing and advancing so rapidly today. Not too long ago, smartphones were not as popular and ubiquitous as they are today and GPS technology was not as advanced and accurate as it has become. Electric scooters existed back then, but they were not mass-produced in the way they are today. Nor were they manufactured in way that has made them very affordable for investors. The quick advancement in the areas of all of these factors are what has helped to create this brand new, modern market.
Independent or Not?
With so many electric scooter, bike, e-bike, and moped companies out there, you may wonder how you will ever compete. That’s an excellent first question and starting point, but the simple answer is… You can compete and win.
If you consider the diversity in environments and usage types that come along with multi-modality such as rental vs. free-floating, you can start realizing that even a city with full saturation of scooters and e-bikes still has a lot of opportunity.
If you plan to launch a free-floating fleet (meaning scooters or bikes on the sidewalk) than you may be required to get a permit. But not all usage modalities require them. For example if you are implementing a rental model in which a user can grab a vehicle by the day, week or even month it means you are most likely safe from difficult permits because your fleet is not using public space.
Even in cities with strict public permits and policies Cosmic partners have launched in resorts, corporate campuses, private communities and rental models because non of these modalities use public space outside of the legally permitted time the rider is going from point a to point b.
And in the event you want to launch a free-floating network, many cities of all sizes have awarded a good portion of their permits to smaller companies instead of to large, national or multi-national scooter sharing corporations. Their intention in doing so is to support small, local businesses rather than to send more profits to outsiders. You may be able to get a permit in your own city simply because you are smaller and local.
It’s important to pick your battles though, because as a new or smaller operator there are many activities that need to be executed well to achieve profitability. You can expect to be building and leading a design and engineering team, sourcing and working with factories, building maintenance teams, logistics teams, customer service teams, just to name a few. This isn’t to mention the initial learning curve of making sure the full operation is running at capacity.
In our experience the most profitable fleets enter with a strong partner that can help them scale not only with technology, but with operational knowhow. In Cosmic we work to position our partners for success and since we are operators ourselves we have a deep understanding of the potential pitfalls of operating your own shared vehicle fleet.
If you would like a bit more guidance in starting your electric scooter company or are looking for something that is a bit more of a turn-key style operation, you might consider looking into Cosmic. As Cosmic, we provide software to drive your business and we offer micro-mobility vehicles for sale or rent at affordable prices. Using a company like Cosmic will make the entire process of starting an e-scooter, bike, e-bike, moped, or motorcycle rental business far easier for you, and you can begin earning money fast.
Choosing the Right Electric Scooter
Once your ready to get started, one of the first things that you will need to do is to get some vehicles. The majority of electric scooters that are on the road today are made in China. Companies have stickers made to label the scooters as theirs, but for the most part, the scooters each company uses are quite similar.
However, they do vary in a number of ways, and you should consider these differences when buying your fleet of scooters. Some scooters are not as sturdy as others and others use batteries that need to be charged more often. Some are great for flat surfaces but don’t do well on hills; some are made for pavement only while others can be ridden on trails in parks.
Take some time to think about the specific needs of your customers in your particular city. If you are buying a fleet of scooters outright, make sure you take time to test the brand and type you are considering before putting a load of money down. You’ll be glad you did not rush this step later.
Cost Per Vehicle
When it comes to micro-mobility vehicles, scooters are your cheapest bet. Most electric scooters will cost between $400-$700 each, but electric bikes, on the other hand, are about twice that, and mopeds and motorcycles are far more. If you are just getting into the business of micro-mobility vehicles, you might want to start with the electric scooters first. This way, you can make sure that this is the right type of business for you before going any further.
Keep in mind that electric scooters can depreciate rather quickly and you may need to buy some replacements sooner than you might expect. If you want to keep your fleet strong and large, this is simply part of the cost of doing business.
Building an App and Integrating GPS
Next, you’ll need to build an app for your customers and get it integrated into GPS systems. The app is the centerpiece of this entire business and without it, you will be unable to rent your scooters to the people who need them. GPS helps your users to find the scooters where they are waiting, and also allows the people you hire to charge the scooters to find them so they can do their jobs.
Building an app can seem complicated, but if you hire an experienced app developer, creating a user-friendly app for electric scooter rentals is not that difficult. The scooters will need to be outfitted with GPS tracking devices, of course, but beyond that, your app developer will need to create an app that displays a map of your city, the locations of your scooters, and a way to charge people for their use as they start and end their rides. Learn about other Terminology and Jargon similar to GPS
Renting Your Scooters
Once you have your vehicles and your app is up and running, customers can begin renting your scooters. The process for doing so is similar across all micro-mobility rental apps, so if someone has rented one of these vehicles before, the rental process should be intuitive for them. For those who are just starting out for the first time, your app should walk them through the process step-by-step to make it easy and to encourage them to come back for more in the future.
When building your app and running your business, you may also want to incorporate and promote things like sales, discounts, and frequent-rider reward programs to keep your customers coming back to your company in a particular time and time again.
There are two big pieces to the maintenance of your scooters once you get things rolling.
First, your scooters will need to be charged on a regular basis. Each ride by one of your customers depletes the electric scooter’s battery a little more. By the end of the day, your vehicles will be spread out all over your city and they will be in need of a charge.
You will need to collect the scooters each night to charge them or you will need to hire someone to do it for you. Once the scooters are charged, they need to be returned to the street. A scooter with a dead battery is no good to anyone, and you can’t rent a scooter that doesn’t run. Charging the scooters each night can be a big hassle, but it’s crucial to the success of your business.
The other half of electric scooter maintenance is the actual maintenance itself. Your scooters will break down and break entirely as consumers use them. Unfortunately, because they are rentals – and brief rentals at that – many of your customers will not treat and use them as if they were their own. Add in the fact that many of your renters will not be very experienced with electric scooters in general and you may find that your scooters and other micro-mobility vehicles are broken more often than you would like.
However, there has been much advancement in the durability of electric scooters than when this industry-first emerged. The first round of scooters offered by electric scooter companies broke after months or even weeks, but today they last much longer.
Still, you will need to track issues with your scooters and you will need to move quickly to get broken scooters repaired or replaced. Every hour or day that you have a scooter out of commission is a day of lost income for you. In many cases, ongoing maintenance can be a big help in keeping your scooters on the road long term.
Get full access to all insights to make this a profitable business from the experts, access the NOW Framework.
An extremely important factor to consider before you begin renting your electric scooters is insurance. Insurance is never exciting but it is necessary. You and your company will need general liability insurance in case someone gets hurt while driving one of your vehicles. Although you can include injury waivers in your app, you will still need insurance to make sure you are not liable for injuries that occur.
Buying insurance for e-scooters can be confusing, and the requirements for how much coverage you need will vary by city. However, with a bit of perseverance and follow-up, you can purchase the insurance you need from a number of providers who offer insurance in this specific realm.
As you can see, there are many things to consider when it comes to building your own electric scooter company. However, many entrepreneurs find that micro-mobility companies are far less complicated than many other startup opportunities.
This industry is big and it is still growing. Worldwide, the global electric scooter market was valued at $18.6 billion, and that number continues to rise. Some experts project a market value of near $29 billion by 2025. There’s no time like the present to get started in the micro-mobility industry, whether you choose e-scooters, bikes, e-bikes, motorcycles, or mopeds, and electric scooters are a great place to start. Good luck!
If you are interested in learning more about how you can get started in the electric scooter business, please give us a call at Cosmic. We look forward to helping you and to answering any questions you may encounter along the way. Contact us today.