A vehicle sharing business initiative has multiple variables ranging from the vehicle, the factory and even the environment of operations being some of the most relevant aspects of the business.
It’s not easy. It’s not fast. It’s not affordable. That is… Unless you have the right partner.
When we started Cosmic I was so intrigued by the business that I put hundreds of thousands of personal and investor dollars into vehicles, software and infrastructure. And it’s becoming a more relevant industry in general terms the industry is expected to grow from USD $2.5 billion in 2019 to USD $10.1 billion by 2027.
What we found out is that the business was way more nuanced than we had thought or expected. Daily, we would learn new issues relating to tech, logic, payments, vehicles, vandalism, theft and government. It was tough to say the least.
After about a month it was not surprising at all that the other companies in the space had raised a lot of money for a reason. So our mission changed a little. We didn’t just want to make transportation easier and more fun but we wanted to make it easier for new operators to enter the industry and service those riders.
Week after week we started hacking away at our platform to make it functional for our future partners. Armed with experience, a little bit of money (and I mean a little bit) and some elbow grease we made a quick pivot to be able to help and service new players in the space.
Shortly after we started engaging with major players in delivery and last mile transportation to build a stronger network. What we realised is that the mistakes we learned along the way are shared by every single operator, simply because it’s such a new industry and most players don’t want to share their insider info.
It’s easy to make and even repeat mistakes when you are building something for the first time. Until very recently the industry was “learning on the job”.
Since the start of the journey we have been able to build Cosmic into a robust platform that delivers on the needs (and the things they don’t know they need) of operators and their logistics fleets.
But the reality is that running a successful micro-mobility fleet is more complicated than tech. The vehicle plays a big part. Look at it like this. If you buy a scooter for $400 (which is a heck of a price if it includes an IoT) and it lasts for about 30-60 days, it means you need that scooter to generate $10 per day per scooter every single day for 30 days. Which is not impossible but also not typical if we’re talking about unit economics. Let’s avoid averages for right now.
Everything start at the level of understanding what is the industry scope, in this 3 dimensions:
● Amount of Rides Done by a vehicle: This is a factor that can be and should be taken with one vehicle during the day, but in some cases you might not take that as the main factor, since some services are provided through subscription and it’s important to address that as part of the success of the model. Check this report with details about this.
● The average ticket of one ride? The important part of the average is the understanding of the real movement of a vehicle, meaning is it being used by the customers?
● What is the structure of your costs? Insurance, Data (If you want network availability for tracking), Taxes, Team structure, warehousing and other costs are really a heavy load If you follow what ALL THE INDUSTRY is doing For this planning and other stages of your project we have The Mobility Academy (Check all details here) where you can get the right structure of cost without even worrying about the final outcome.
Before even creating the academy and learning from our own issues and mistakes we had experience with this issues when we were using a Xiaomi hacked to our needs, moving towards a really cheap vehicle without even planning or thinking the true cost of operations to get a successful operation, because in most cases the vehicles had to be repaired multiple times and basically a vehicle of 3 months of life cannot be a business vehicle. Simply put these scooters were not meant for the free-floating rental model that was proliferating the world.
So we knew that we needed to emphasize the right vehicle for the job, in addition to our platform… And it’s not just the lifespan of the vehicle, but also the range or ability to quick swap a battery. For this we offer to you a full overview of some good players we actually use
In the end we started pursuing vendors and partners around the world. We needed to start implementing a robust vehicle that lasted but was also easy to maintain and service.
And for that we launched a series of openings with multiple factories and at that capacity we were able to evaluate the vehicles from really different perspectives.
|Pick a Sharing Model/Audience||Top Usage||Type of Ride||Details|
|Commuters||Free Floating and Stations||Rides by the Minute or On Demand||- Charging and secure kiosks, warehouse or crowdsourced - Check regulation if you are using public space. if you are using a kiosk on private space model there's no issue|
|Locals & Tourists||Rentals and Subscriptions||Rides Daily/Weekly/ Monthly||- Pick up at facility or delivery -No regulations problem at all - Maintenance is crucial|
|Corporate||Private Fleet||Usally Free or Subsidized||- Charging and storage or warehouse - No regulatory problems at all -Fleet Management software and mainteance is crucial|
After a lot of soul searching we found a manufacturing partner that was up to the challenge to deliver something up to par. Ok great right? Wrong. Supply chain is a headache and aligning all moving parts of the pipeline is highly complex. So we had a new challenge to overcome… How do we actually get our inventory on time and hassle free?!
All of our experiences in Cosmic led to a very clear understanding that the pains we lived through would prevent other entrepreneurs or businesses entering the space.
Cosmic is a byproduct of a lot of trial and error. We put a lot of love into our platform because we know that partners are looking to make a return on their investments and we know that we have people’s safety in our hands. We believe that we have resolved most of the major business blockers preventing profitable unit economics running a shared mobility fleet.
My hope in writing this article is not that I scare you away from starting your own fleet, but rather being armed with information, experience and partners that can make you grow.
If you’re interested in learning more about Cosmic partnership programs or just want to say hi click here to drop us a line