How profitable is scooter sharing business?

How profitable is scooter sharing business?

The mobile sharing industry is projected to grow at a rapid rate over the next several years. The economic shift towards micro mobility has shown that bike and scooter use is going to grow from USD $2.5 billion in 2019 to USD $10.1 billion by 2027. With an increasing demand for affordable mobility services, industry leaders are making adjustments to their financial models to accommodate changing regulations, as well as, growing production costs.

We put together a breakdown of the expenses that are currently going in to establishing a profitable MaaS company along with some other considerations to keep in mind.

What are the current pricing levels for leaders in Scooter and Bike Sharing?

The pricing levels for different services being offered around the world vary based upon initial upfront costs, cost per allotted time and total ride duration. These prices are also subject to change depending on the regulatory requirements of each location.

Scooter sharing:

 

 

Bike sharing:

 

 

At ATOM Mobility we have a specific calculation to determine the total income a scooter or bike sharing service makes based on ride time and pricing fees. This allows adjustments to be made for the different price levels each company offers.

Income Equation: (Unlock Fee + (Average Ride Time X Minutes)) = x

x = Average Price per Ride

How does vehicle ridership impact the financial model?

Ridership is impacted by a multitude of factors, including availability to travel lanes, density of charging/docking stations, level of integration within the overall transportation network, along with the extent of rider outreach and vendor education. Vehicle use rates tend to increase based on volume of available scooters/bikes and ease of access to stations. The systems with larger fleets, as well as wider spread sharing infrastructure tend to experience higher ridership.

According to research conducted by the National Association of City Transportation Officials, scooters are making up to two times more rides per vehicle per day compared to bikes. Bike services complete anywhere from 0.5 to 2.5 rides per day at an average of 1, with trends showing a shift away from traditional pedal bicycles as the interest in e-vehicles continues to grow.

 

Image source: nacto.org

 

Image source: nacto.org

The region where services are being offered can also influence ridership. Across our partners at ATOM Mobility for scooters, we are seeing from 1.8 to even 5 rides per vehicle per day, with even higher rates in colder regions where the proper infrastructure is in place.

 

Image source: City of Chicago, E-scooter Pilot Evaluation

 

Image source: City of Chicago, E-scooter Pilot Evaluation 

An evaluation of the City of Chicago’s E-scooter pilot program found that over time the number of trips per day decreased from an average of 3.7 to 2.5. This aligns with the seasonality of mobility vehicles, which has been proven to impact ridership. Our research found that there can be decreases between 30 to 50 percent during the off-season.

The average rides per day you can count on for bike sharing services is 0.5 to 2.5, and 1.8 to 5 for scooter sharing services.

What additional factors need to be taken into consideration?

Once we have determined how many rides are being taken and the average price, we can calculate the average income per vehicle per month and outline cost positions. To begin growing revenue, mobility companies need to determine ways to extend the lifespan of their vehicles or off-set the costs once the limit is met. These factors are a major component in developing a successful financial model. In addition, it’s important to review the other expenses that impact vehicle maintenance and usage when constructing an accurate forecast.

Seasonality

Seasonality refers to the time of year a service operates as a result of environmental or weather factors. For mobility services, the usage season usually begins when the average temperature in a month is +10 Celsius or more.

Rides Per Vehicle Per Day

The number of rides each vehicle is taking in a day will impact both revenue but also maintenance and lifespan costs.

Rides

The rate for each ride will need to be considered when developing an overall financial plan for a company.

Maintenance Costs (ex. 13 percent of cost per ride)

Maintenance of the vehicle fleets is required and may vary depending on usage, as well as vehicle model.

Charging Costs (ex. 21 percent of cost per ride)

Whether the fleet uses docking stations or offers free floating services, the cost of charging the vehicles is necessary for continued use.

Bank Commission (ex. 3 percent cost per ride)

This includes any of the banking fees that are acquired.

Marketing (ex. 4 percent cost per ride)

Promoting the services being offered is an essential expense for business growth and expansion within the market.

Customer Support (ex. 5 percent cost per ride)

Most mobility services are offered through mobile apps that require regular support from customer service representatives to resolve customer inquiries and help with reputation management for the company.

IT System Support (ex. 5 percent cost per ride)

These services include IoT systems, sim cards, data, software and other technological requirements needed for the vehicles to operate.

Additional Costs (ex. 3 percent cost per ride)

Mobility companies like any other vehicle service are subject to additional costs such as insurance, city permits and/or other resources.

Our Excel-based Model

To help determine the overall impact of fluctuating costs for scooter and bike services, we developed a financial model that breaks down costs based on a percentage. Through this Excel-based Model we are able to maintain a proportionate evaluation of the expenses for each service.

 

source: ATOM Mobility

 

source: ATOM Mobility

To make calculations we assume an average ride time of 20 minutes then apply that to our Excel-based Model. Costs are shown as a percent from the ride price. Since cost and prices differ country by country, this model allows for the proportions to remain the same. For accurate forecast planning, we recommend using the average of two to four rides per vehicle per day on a period of wholesale. To learn more about our model, please email us.

Where do we go from here?

Mobility as a service is expected to continue growing as additional opportunities for expansion and profitability open in the market. At ATOM Mobility, we want to help your business thrive in the exciting new world of transportation services. There has not been a better time to join other industry leaders than right now. Reach out to us today so we can start building for the future, starting with our scooter sharing software.

Interested in launching your own mobility platform?

Click below to learn more or request a demo.

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If you’re into micro-mobility, is the event to be at! Taking place in California, this event brings together industry leaders, startups, and city planners to discuss the latest trends in urban transportation. From e-scooters to e-bikes, it's a hub for everything micro-mobility. We’re excited to be attending this event to explore how cities can build smarter, greener transport solutions. Whether you're a startup, an investor, or a city planner, we'd love to connect and discuss how we can collaborate to transform urban mobility.

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Connect with industry leaders: These events are the perfect place to meet key players in the mobility industry. Let’s chat and see how we can work together to drive innovation in micro-mobility and vehicle-sharing.

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Grow your business: Whether you’re a startup looking for partners or an established company aiming to expand, these events offer incredible opportunities for collaboration.

Shall we meet?

Are you planning to attend any of these events? Reach out to us – we can’t wait to connect!

Don’t miss out on these amazing mobility events in the last quarter of 2024! Whether you're in Cologne, London, or California, these events offer an unbeatable chance to learn, network, and explore the future of urban transportation.

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Unlocking new revenue streams: B2B partnership ideas in shared mobility
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For instance, a hotel might offer scooters for guests to explore the area, or a company could provide employees with discounted access to shared vehicles for business trips or commuting. These examples highlight B2B mobility, where a shared mobility operator partners with a business or organization. This collaboration not only generates financial benefits for both parties but also helps companies reduce their carbon footprint and creates new revenue streams for mobility operators.

Here are some creative ideas to enhance your fleet revenue through innovative B2B partnerships and new opportunities:

Franchising

In shared mobility, a common franchising approach involves operators partnering with other mobility providers, allowing them to operate under your brand and software. In this model, the franchisor provides a comprehensive operating system, including its brand, products, services, and operational framework. This offers a turnkey solution for managing a shared mobility business. Franchisees receive extensive support, such as site selection, development guidance, operational manuals, training, marketing strategies, and ongoing business advisory services.

Leverage ATOM Mobility's dashboard subaccount system to grant Franchisees access restricted to their specific operations and the fleet you assign, enabling your partners to efficiently manage vehicle sharing or digital rental operations under your brand.

Explore corporate fleet solutions

Many businesses are on the lookout for reliable, scalable fleet solutions for their corporate needs. By positioning your fleet as an ideal solution for corporate transportation, you can open up new revenue streams. For example, you can partner with a larger company and allow their employees to use your fleet at a special price during working days. At the same time, the company can assign different mobility budgets to various employee groups to use in your app. In such cases, the company, your partner, will cover the rides of their employees at specially agreed rates.

Check out our corporate account management for more insights on how to get started. Businesses often need transportation solutions for employee commutes, client visits, and even business trips. Tap into this need, and you’ll see your fleet revenue soar.

There are two core cooperation models with larger companies:

- Allowing their employees to use publicly available vehicles at specific times via your app, with all rides covered by the company.

- Dedicating, and potentially branding, a portion of your fleet for a specific company, making it available exclusively to them and their employees. In this model, you provide the support, software, and maintenance, ensuring that this fleet is accessible only to that company.

Join forces with local hotspots

By teaming up with local cafés, retail stores, or entertainment venues, you can offer special promotions to their customers. It’s a win-win! Local businesses get more foot traffic, and you get a steady stream of new riders or renters. This works very well in micro-mobility.

For example, you could offer a discount on vehicle rentals to patrons of a local restaurant or provide shuttle services for events at a nearby theater. Plus, it’s a great way to make your fleet a local celebrity!

Dive into delivery and logistics sector

With the explosion of e-commerce, there’s a significant opportunity in the delivery and logistics sector. You can partner with online retailers or local businesses in need of delivery services, offering either a full-service solution, including delivery, or simply leasing vehicles to them.

By providing dedicated delivery solutions or offering special rates for bulk deliveries, you can tap into a lucrative market and scale from there. Your fleet can become the preferred delivery solution for online shops and local stores, increasing your revenue while keeping your vehicles in constant use.

Create exclusive tourist packages

Tourism is another goldmine for fleet revenue. Collaborate with travel agencies, hotels, or tourist attractions to offer exclusive transportation packages. Imagine a package deal where tourists get a ride to all the must-see spots in town with a single booking. It’s convenient for tourists and profitable for you!

For inspiration on how to cater to tourist destinations, check out our Vehicle Fleet Owners’ Guide to Tourist Destinations.

Leverage event partnerships

Events, from corporate conferences to local festivals, are perfect opportunities for fleet revenue growth. Partner with event organizers to provide shuttle services, VIP transport, or event-specific rentals.

You could also offer branded vehicles as part of the event experience. Imagine your fleet driving event-goers around town, all while being seen by thousands of potential new customers.

Offer vehicle subscription services

Subscription services are on the rise. Why not offer a vehicle subscription model where businesses can subscribe to access a variety of vehicles based on their needs? This model can provide steady, predictable revenue and attract customers who prefer flexibility over long-term commitments.

ATOM Mobility’s private fleet options can easily be adapted to fit a subscription model. Learn more about our private fleet solutions to see how this could work for you.

To ensure your new B2B offering is successful, follow this easy five-step process for each new B2B revenue direction you want to test:

- Identify partners: Research and reach out to businesses that could benefit from your B2B offering. At this stage, presentations and text will be sufficient, and the main goal is to collect feedback and gauge interest.

- Customize services: Based on the feedback collected, tailor your offerings to meet each partner's specific needs and address their pain points for better value. This is a good time to sign an agreement with them.

- Set up the platform: Ensure your technology and fleet are ready for B2B. Partner with experts like ATOM Mobility for seamless technical support and easy onboarding.

- Run a pilot: Test your approach with small-scale pilots to gather feedback, assess the financial model, and improve your solution.

- Scale up: Once pilots succeed, expand to new partners and regions using the insights gained.

Ready to boost your revenue?

There’s a whole world of opportunities out there to enhance your shared fleet revenue through creative partnerships and innovative B2B solutions. At ATOM Mobility, we’re here to help you explore these exciting possibilities and take your fleet to the next level.

Ready to get started? Join ATOM Mobility today and discover how you can create a fleet that’s not just functional but also profitable. Let’s drive innovation and success together!

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