Having a great business idea is rarely enough – you also need money to get the ball rolling. But what if you don't have tens of thousands just laying around to bootstrap your business? Or don't want to go the traditional way and attract VC funding in exchange for a large number of company shares?
This is where many founders choose to crowdfund.
Crowdfunding is a way of raising money for your business from a large number of people through online platforms. In 2000, ArtistShare became the first dedicated crowdfunding platform, and since then, crowdfunding has become one of the top funding sources for businesses, with the global market estimated to reach $300 billion by 2030.
If you're looking to fund your vehicle-sharing business, crowdfunding might be one of the options. It can not only help you attract money but also test your business idea in the first place. After all, if enough people are ready to back your idea, it's a clear sign it has a place in the market.
Screenshot from www.funderbeam.com crowdfunding platform.
Types of crowdfunding platforms & their investors
For your vehicle-sharing business, there are three main types of crowdfunding to consider – rewards, debt, and equity. Let's take a closer look at each of them!
This is considered the “traditional” type of crowdfunding and is currently the most popular. The idea is simple – people contribute to a business idea, expecting to receive a reward, such as products or services, at a later stage.
Platforms for rewards-based crowdfunding (few examples):
Who are the backers?
Regular people with little or no experience in investing; early adopters – people who embrace new things before most other people do. Generally, these people invest because they truly believe in the idea and want to help it come to life, as well as because they just want to be the first in the world to receive the product.
Businesses at early stages – idea or early development. Rewards crowdfunding is also for established businesses looking to launch a new product or expand to new markets.
Debt-based crowdfunding – also known as peer-to-peer (P2P) lending – means that the crowd lends money to a company, which it needs to repay with interest by a certain deadline. The idea is similar to borrowing a loan from a bank, except that in this case, there are many lenders instead of one.
Platforms for debt-based crowdfunding (few examples):
- Honeycomb Credit
Who are the lenders?
Lenders that support companies via debt-based crowdfunding are individual investors looking to earn a higher profit on their cash savings and/or diversify their portfolio. These investors care about two things – whether the company will be able to repay the loan and how much they'll earn in interest payments. Everything else is secondary.
Companies with a stable revenue that can more or less accurately predict their cash flow to repay their lenders. Generally, this is for companies at different stages when they've started to make a profit.
Equity-based crowdfunding allows businesses to give away a portion of their company to a number of investors in exchange for investment. Investors receive shares in the company based on how much money they've contributed.
Typically, equity-based crowdfunding is done in a way that first, the crowdfunding platform takes the company's equity, then sells the shares on their platform.
Platforms for equity-based crowdfunding (few examples):
Who are the investors?
Typically, these are quite seasoned investors with experience in stock and/or startup investments who are now looking for higher-risk, higher-yield investments. These people might be less interested in the idea or cause behind the business and more in its potential future growth and profits.
Businesses at all growth stages, except for the exit/acquisitions stage.
How much can you expect to raise with crowdfunding?
How much a successful crowdfunding campaign raises can differ greatly depending on the stage of your business and the type of crowdfunding you've chosen.
For example, according to the equity-based crowdfunding platform Seedrs, businesses with MVPs usually raise between €30k and €50k, whereas early-stage businesses – between €50k and €250k.
In the meantime, on Kickstarter, the rewards-based crowdfunding platform, the majority of successfully funded projects raise less than $10k. Tech products typically raise between €20k and €100k.
How about vehicle-sharing businesses? Here are two successful examples:
- Electric bike-sharing company Mobi raised €794,891 on Spark Crowdfunding.
- Scooter-sharing startup tretty raised €62,635 from 170 backers with their rewards-based crowdfunding campaign via StartNext.
- Bike and scooter sharing company Frog Mobility raised €138,814 – 40% of their set funding goal – via equity crowdfunding platform Spark Crowdfunding.
- Mount, a PaaS for Airbnb hosts to offer shared vehicles to their guests, raised $133,460 via WeFunder.
To start a bike-sharing or scooter-charing business with 40 vehicles, you should aim for at least €40k. This is doable with all types of crowdfunding models if done right.
Now, let's see what “right” means and how to make your crowdfunding campaign a success.
How to succeed with your crowdfunding campaign
A successful crowdfunding campaign can help you get your business off the ground and raise even more funds than you had expected. The harsh reality, however, is this: as many as 85% of crowdfunding campaigns fail and never reach their set goal.
To increase your chances of a successful crowdfunding campaign here's your basic to-do list:
- Choose the right platform
This depends on your funding goal, the stage of your business, the type of your product, and even your target market. For example, AppBackr is an app-specific crowdfunding platform, StartNext is for products for the German market, while Kickstarter is only available to creators in 25 countries.
- Understand your investors
People backing projects on Kickstarter vs Funderbeam can differ greatly. For example, on Kickstarter, people are more interested in the “coolness” of the product, whereas investors funding companies via debt-based or equity-based crowdfunding platforms care more about the company's projected growth and cash flow, and the money this investment is going to make them. Keep this in mind when crafting your pitch!
- Start preparing early
One of the key secrets to launching a successful crowdfunding campaign is investing heavily in pre-campaign lead generation. Start building a community and an email list of supporters as early as you can – these people will give your campaign the necessary first push to succeed. You should aim to collect 30% of your funding goal within the first week – then, the campaign is likely to reach the goal.
- Craft a compelling pitch
Good storytelling is the key to your campaign's success, no matter who your investors are. That said, the stories they want to hear differ. For a reward-based campaign, craft a story around your product that evokes emotions – make people laugh, help them imagine themselves with your product, or be angry about the issue it's going to solve. For an equity-based campaign, you should focus more on highlighting your team's strengths, market knowledge, and long-term vision.
- A range of rewards
Apart from an option to buy your product, it's recommended to include some lower-priced options for people who just want to support you. For example:
- Weekly or monthly subscriptions to your service
- Free credits to use your service
- Ad space on your product
- Partnership packages
- Priority delivery of the product or access to the service
- Product accessories
- Guided city tours
Other things that can help you launch a successful crowdfunding campaign include:
- Professional visuals – this is essential for making a good first impression
- Videos – they help issuers earn 105% more
- Posting regular updates – those boost your chances of raising 126% more
- Data and stats that make you look reliable – previous successful projects, business traction, existing customer reviews, and testimonials
- Social media presence – when you share your project on social media platforms, your probability of success increases. For example, if you share to 100 or 1,000 followers, the probability of success increases by 20% and 40%, respectively.
One of the biggest mistakes founders make is assuming that it's enough to have their campaign launched on the chosen crowdfunding platform, and people will come and invest in it.
The reality, however, is this:
A successful campaign requires a lot of work outside the crowdfunding platform – you need to proactively and systematically look for supporters and persuade them to invest. So, to improve your chances of succeeding, start preparing months before the launch of the campaign.
Click below to learn more or request a demo.
Is it a good time to start a car-sharing business? Absolutely.
The car-sharing market is booming – it's estimated to grow 20% every year and reach a $20 billion market value by 2032. That's nearly a sevenfold increase from 2022's $2.9 billion valuation.
Despite app-based vehicle sharing being a relatively new entrant in the mobility ecosystem, it has exploded in popularity. People have been quick to pick up on its convenience and ease of use, especially in urban centers where maintaining a private vehicle grows increasingly costly and bothersome.
This spells an opportunity for entrepreneurs keen to answer real mobility demand.
But what is car-sharing and how does it work? What does the business model look like? And what are the first steps for getting started?
Find the answers below.
What is car-sharing and how does it work?
Car-sharing is an app-based mobility service that allows individuals to rent vehicles on a short-term basis. With this service, users gain access to a fleet of vehicles which are typically stationed throughout a city, ensuring that there's always a car conveniently nearby.
The user's journey and benefits of car-sharing
Through an app on their smartphone, users can locate, book, and unlock the closest available vehicle, as well as pay for their journey automatically by adding payment details, thus providing a seamless experience and quick access to a car. Other common benefits for users include not having to worry about fuel or insurance, as those are included in the price.
Cities often encourage the use of shared mobility since it helps decongest streets, free up parking, and minimize the environmental impact of private vehicles on the city. Accordingly, public-private partnerships are common, conferring further benefits for users of this type of shared mobility: free parking, free use of bus lanes, and more.
How does car-sharing work: the business perspective
On the business side of things, the operator is responsible for ensuring that maintenance and logistical tasks for their fleet are taken care of.
This includes regular maintenance tasks, such as vehicle check-ups, repairs, fuel fill-ups, and cleaning. Also, if you have a free-floating model (where users can leave their cars anywhere), the operator should regularly relocate cars to optimal locations for continued user convenience and reliability.
Beyond deploying and maintaining their fleet, operators also oversee the smooth functioning of their mobility app, as well as take care of user verification, namely, ensuring that the people signing up are who they say they are and have valid driver licenses. Of course, like any other business, customer support and other responsibilities tied to running the operation are a given.
The car-sharing business model
So far, we have listed a lot of expenses – maintenance, management, insurance, IT. Add to this salaries, operational overheads, and buying or renting the fleet itself. How do businesses recoup all these expenses and turn a profit?
Note: Since car-sharing businesses operate at scale, they should aim to negotiate lower rates with service providers.
Car-sharing businesses make use of several revenue sources. First and foremost, customers are charged for the time/distance use of the car. Additionally, branding and cross-promotion partnerships (e.g. advertising on the car or the app) are often used to secure additional revenue. It may also be sensible to create membership or loyalty programs to ensure recurring revenue, by offering subscribers added benefits, such as access to premium cars or longer reservation times.
The aim is to have your cars on the road as much as possible, so enterprises typically focus on maximizing vehicle usage and revenue per vehicle. Finding success is about finding balance in a constantly changing landscape – having too few cars may lead to overbooking and dissatisfaction with lack of availability, whereas having too many will lead to inefficient use of resources.
How to start a car-sharing business
As with any business, launching a car-sharing project requires research, investment, development, and strategy. Let's take a look at each in turn.
1. Market research
When exploring opportunities for starting a car-sharing business, numerous factors must be considered.
Audience and demand
Understanding the demographics, preferences, and behaviors of your potential users is crucial. As is determining the level of demand. Some questions you should answer include:
- Who is my target audience – urban commuters, occasional travelers?
- What are their demographics? How should you communicate with them?
- What segment offers the most promise – B2C, B2B?
Identifying who's already operating in your area and why (or why not) can help you get a better grasp of what works and what doesn't. Some questions you should answer include:
- Who are my competitors – other car/ride-sharing businesses, public transportation?
- How can I differentiate my business from others?
- Has any previous similar business failed in this area – why?
Legal and logistical considerations
Determining whether there are any legal/practical barriers to launching your operations is a smart thing to do before you invest too much time and money into your project. Consider:
- What are the legal requirements for operating this type of business in your area?
- How will you handle insurance and liability issues for your fleet?
- How and where will you run your day-to-day operations? If you're thinking about going electric – does the area have the necessary infrastructure?
While answering these questions isn't necessarily a prerequisite for launching your business, dealing with them early on can save you a lot of headaches down the road.
How much capital do you need to launch a car-sharing business?
It depends most on whether you're planning to rent or buy vehicles for your fleet. While renting is more accessible in the short term, it will take a sizable bite out of your profit. Owning your vehicles is typically the preferred option, as this offers price stability, long-term cost efficiency, freedom of operations, and other benefits.
To get a ballpark estimate for the starting investment, you should add up the total price of cars (EUR 12,000-20,000 per vehicle), insurance, car-sharing software procurement and maintenance, as well as expected operational overhead for getting started. It may also be wise to put aside some funds for unexpected expenses such as repairs.
3. Development and launch strategy
Securing the vehicles and necessary permits can take a while, and you should account for this. During this time, you should put your plans into practice. Establish maintenance protocols and logistical plans for efficient fleet management. Implement user verification processes and responsive customer support for a secure and positive user experience.
As to the IT infrastructure, you can save a lot of resources by choosing a white-label IT solution to power your app and dramatically accelerate your time-to-market. Platforms like ATOM Mobility can equip your business with the app you need – all you have to do is customize it.
Speaking of customization, don't forget about branding. Create a compelling brand identity and plan for targeted launch and marketing campaigns to generate awareness the moment your business is ready for its first customers.
Your car-sharing business journey starts here
Now you know how to start a business in this industry – entering this thriving market demands a blend of user-centric strategies and astute business decisions. But the key to success is reliable partners that can guide you in the right direction.
Get in touch with ATOM Mobility to discover how you can power your new enterprise the smart way.
The shared mobility industry has experienced significant growth and transformation in 2023, with various segments such as ride-sharing, vehicle rental, and micro-mobility witnessing substantial changes.
From the rise of ride-hailing services to the increasing popularity of shared vehicles, the industry's landscape is evolving rapidly. This article presents 32 key statistics from 2023 that provide valuable insights into the current state and future prospects of the shared mobility sector, offering a comprehensive overview for industry stakeholders and observers.
General – Shared mobility industry
The global shared mobility market is expanding rapidly, projecting a substantial increase in revenues and ridership. By 2030, it is poised to double its share of urban transport journeys from 2023. Additionally, the number of individuals earning from shared mobility services is forecasted to rise notably.
In Europe, shared vehicle services demonstrate considerable growth, with an increase in multi-mobility users. At the same time, European cities are the strictest shared micromobility regulators, limiting the number of operators and implementing various rules.
- The shared mobility market worldwide revenue was projected to reach US$1.43T in 2023. Statista
- Shared mobility is expected to make up 7% of all urban transport journeys globally by 2030, up from 3% in 2023. Shared Mobility's Global Impact
- The global shared mobility market size is expected to grow at a CAGR of 41.65% from 2023 until 2030. Shared Mobility Market Analysis Report
- More than nine million people were estimated to earn an income from shared mobility services in 2023, and the number is forecasted to grow to 16M by 2030. Shared Mobility's Global Impact
- In the shared vehicles market, the number of users is expected to amount to 5.09B users by 2027. Statista
- The average revenue per user (ARPU) was expected to amount to US$180.90 in 2023. Statista
- In global comparison, most revenue from shared mobility is generated in China (US$358B in 2023). Statista
- Africa has the strongest income growth from shared mobility services: jobs are expected to increase by 113% from 2023 to 2030. Shared Mobility's Global Impact
- Ride-hailing drivers typically earn above the minimum wage in Europe (+37% in Berlin and +91% in Tallinn) and above the wages for jobs with comparable skill levels in Africa (up to +130% in South Africa and Nigeria). Shared Mobility's Global Impact
Europe & UK
- There is a significant growth in the use of shared vehicle services, with a 221% increase recorded. Free Now report
- The number of multi-mobility users has also grown by 27%. Free Now report
- Comparing Q3 2022 and Q3 2023, shared mobility ridership is up 1%, and fleets are down 2%, meaning Total Vehicle Distance (TVD) slightly improved across the board. Q3 2023 European Shared Mobility Index
- Out of 32 European authorities that regulate shared micromobility operations, more than two-thirds have implemented rules on geofencing (26), parking (25), removal or repositioning of vehicles (25), fleet size limits (24), and fleet rebalancing and redistribution (22). POLIS report on How European Cities are regulating Shared Micromobility
- Around half of the European authorities limit the number of operators, demand insurance, set speed limits, specify conditions for vehicles and their maintenance, and have instructions for the end of operations. POLIS report on How European Cities are regulating Shared Micromobility
- Juniper Research has ranked Berlin as the leading smart city in Europe in 2023 thanks to its mobility-as-a-service (MaaS) app Jelbi, which incorporates public and private transport. Other cities in the European top five are London, Barcelona, Rome and Madrid. Cities Today
Shared car ridership has increased significantly, with notable upward trends in Q3 2023. The global ride-hailing market is also projected to witness substantial growth, with increased user numbers and an uptick in popularity over taxis in the United States. In Europe, German cities, led by Berlin, continue to dominate in total shared car ridership.
- Shared car ridership has grown by 22% from Q3 2022 to Q3 2023. Q3 2023 European Shared Mobility Index
- The car-sharing market size was worth USD 2.9B in 2022 and is estimated to showcase around 20% CAGR from 2023 to 2032. Global Market Insights
- The biggest increase of car ridership in Europe in 2023 happened in Riga, thanks to the emergence of Bolt Drive. Antwerp saw the 2nd most growth due to the introduction of Miles Mobility Q3 2023 European Shared Mobility Index
- German cities continue to dominate the rankings for total ridership per city. In Berlin, there are 30% more shared cars on the streets than in 2022. Q3 2023 European Shared Mobility Index
- The ride-hailing market worldwide is projected to grow by 6.97% (2023-2028), resulting in a market volume of US$215.70B in 2028. Statista
- Ride-hailing services were anticipated to hit a record number of users in 2023, with an additional 6.6M users in the US, representing a 10.1% increase and finally recouping its pandemic-era losses. Insider Intelligence
- In the United States, ride-hailing is reported to be used more frequently than taxis, with around a fifth of respondents being occasional users of ride-sharing services. Statista
Electric scooters and mopeds
Electric scooter (e-scooter) ridership has declined, although it remains the predominant shared mobility choice, constituting 42% of total ridership. Moped ridership in Europe has similarly decreased, influenced by exits of key market players.
E-scooters have emerged as an environmentally friendly alternative, with 10% of rides directly replacing car journeys. Citizen referendums in Paris and evolving regulations in Amsterdam reflect the dynamic landscape of the electric scooter and moped market.
- E-scooter ridership has fallen by 14% from Q3 2022 to Q3 2023. That said, scooters are still the most popular shared mobility transport mode, with 42% total ridership. Q3 2023 European Shared Mobility Index
- Moped ridership in Europe has fallen by 28% from Q3 2022 to Q3 2023 due to the departure of some players in key markets. Q3 2023 European Shared Mobility Index
- Electric scooter usage patterns show 10% of rides directly replace car journeys. Shared Mobility's Global Impact
- Thus, e-scooters have contributed to a reduction of up to 120M car-kilometers traveled, helping to reduce car-related emissions by an estimated 30,000 tons of CO2e. Shared Mobility's Global Impact
- On 2 April 2023, Paris held a referendum on shared e-scooters, and 90% of voters gave their vote against renewing the contract of three shared micromobility companies to operate around 5,000 e-scooters each. CNBC
- In Amsterdam, moped ridership has grown by 22% despite new regulations on helmets being brought into effect. Q2 2023 European Shared Mobility Index
The global bike-sharing market shows significant growth. In Europe, station-based bikes have increased in popularity. Dockless bikes experienced an impressive surge as well, following the 2023 scooter ban in Paris. Overall, bike fleets and ridership are expanding across major European cities, contributing to a robust Trips/Vehicle/Day (TVD) ratio.
- The global bike-sharing market is projected to reach US$12.68 billion by 2027, growing at a CAGR of 10.71% from 2023 to 2027. Statista
- Station-based bike ridership in Europe has grown by 11% from Q3 2022 to Q3 2023. Station-based bikes are the second most popular shared mobility transport mode, with 30% total ridership. Q3 2023 European Shared Mobility Index
- After the 2023 scooter ban in Paris, dockless bikes have boomed 144%. Dockless bike ridership more than doubled YoY in September (x2.5) and October 2023 (x2.3). Q3 2023 European Shared Mobility Index
- Fleets and ridership are growing across Europe, especially in cities like Paris, London,Copenhagen and Antwerp. The combined TVD of dockless and station-based bikes is a very healthy 2.9. Q3 2023 European Shared Mobility Index
Rolling into 2024
The shared mobility market continues to expand. With ride-sharing and micro-mobility playing pivotal roles, the future of shared mobility appears promising. The insights gathered from these statistics are crucial for understanding the shared mobility market's trajectory and its implications for the broader transportation ecosystem.
Let's make 2024 a year of shared mobility!