So You Want to Start a Scooter or Bike Sharing Business…
January 4, 2020
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.
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.
That means if you get 30 days of consistent rides making $10 per day per scooter, you have lost $100 after the scooter gets damaged, lost or stolen.
That’s what we were experiencing when we were using a Xioami hacked to our needs. 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.
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.
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: https://cosmicgo.co/partners/