The 7 benefits of launching a shared mobility business in a small town
July 31, 2023
min. read
Whether we're talking car sharing, mopeds, or scooters, shared mobility is usually associated with large, buzzing cities. More potential customers, longer distances to travel, and higher demand for transportation services – these often seem like key business factors for aspiring mobility entrepreneurs.
But large cities present hurdles, too. From intense competition to higher operating expenses, establishing yourself in a major urban center is a costly uphill battle that's becoming more difficult by the day.
In response, mobility entrepreneurs are increasingly eyeing small towns for their operations.
Launching a shared mobility business in a small town comes with a distinct set of advantages that may be particularly suited for those taking their first steps in the industry. While industry veterans are also exploring opportunities to expand their operations beyond the big cities, smaller towns might not meet their desired level of profitability and hence are typically overlooked.
In what follows, we'll detail seven important benefits of launching a shared mobility business in a small town and take a quick look at what such an operation could look like.
7 reasons to launch a shared mobility business in a small town
Unless you're working with massive capital and are willing to go to war with several other operators, a small town can be the perfect place to begin your shared mobility business journey. Especially if you yourself come from that or a nearby town.
1. Meet real needs
One of the most significant advantages of operating in a small town is the ability to meet genuine transportation needs. Local entrepreneurs, themselves part of the community, possess an intimate understanding of the unique requirements and behaviors of their fellow residents.
Accordingly, it can be very rewarding both financially and socially to provide a mobility solution that tackles specific issues, and no large competition can do it as quickly or efficiently as a local entrepreneur.
2. Better collaboration with authorities and residents
Working with local authorities in small towns is often a more streamlined and collaborative process. This makes obtaining permits and navigating regulations considerably easier compared to larger cities.
The smaller scale and close-knit nature of these communities allow entrepreneurs and city officials to establish closer working relationships, fostering open communication, and a joint vision in developing mobility solutions that are best suited for the town.
3. More effective marketing
Marketing and advertising efforts in small towns can be significantly simplified and more effective. Sometimes marketing might even be unnecessary. Local entrepreneurs have the advantage of leveraging community events, traditions, and personal connections to create impactful marketing campaigns that resonate deeply with the residents.
This localized approach not only enhances brand visibility but also establishes a sense of familiarity and trust among potential customers – elements that outside brands may find very difficult to replicate.
4. Little-to-no competition
One of the most enticing aspects of launching a shared mobility business in a small town is the lack of competition from major players. Major companies may overlook these areas due to perceived limited profitability potential, leaving the market wide open for local entrepreneurs to establish themselves as the primary mobility service provider.
With little or no competition to contend with, entrepreneurs can seize the opportunity to capture a significant market share and build a loyal customer base from the outset.
5. Faster service adoption
A major challenge when launching in a big city is slow adoption. Travelers have lots of options to choose from and they typically already have mobile apps for the most popular service providers. As a result, this can make them hesitant to download another app or to change their habits.
In smaller cities, this is a non-issue. Word of mouth travels fast and it's much easier to get noticed when you have little-to-no competition. Ultimately, this helps your mobility business start generating more revenue faster.
6. Easier B2B or B2G partnerships
The local nature of small towns enhances the potential for fruitful partnerships and collaborations. As a local business, shared mobility entrepreneurs are more likely to garner the interest and support of other organizations in the vicinity. Building partnerships becomes more accessible, as there is a shared understanding of the community's needs and a mutual interest in driving positive change.
For instance, establishing collaborations with local businesses to offer corporate fleet services or working in conjunction with the local government to provide special discounts for specific groups of citizens can create mutually beneficial arrangements. These partnerships not only expand the business' customer base but also strengthen its reputation.
7. Simpler and more effective ground operations
Small towns, by their very nature, offer a significant advantage in terms of simplified and efficient ground operations for shared mobility businesses. With smaller geographical areas and populations, the logistical challenges associated with tasks such as vehicle collection, relocation, and maintenance are greatly minimized.
The compact size of small towns often results in lower operational costs, enabling entrepreneurs to maintain a lean and cost-effective operation, while keeping customer satisfaction high.
A typical small town operation
The needs of a city with a population of 20-30k people can be effectively met with a reasonable fleet size of 80-150 scooters, which is an optimal starting size for scooter-sharing businesses. As mentioned, such a fleet is also easy to maintain and keeps ongoing operational costs low.
Small cities are often surrounded by other nearby smaller 5-10k people towns, which offer expansion opportunities without dramatically increasing servicing and maintenance costs and efforts. This allows the fleet to be managed by a single employee on the ground, while keeping the central ~20k population city as an operational hub.
From our own 100+ operators, we see that small town operators with no other competition are earning more money per vehicle than their counterparts in bigger cities – a very important metric, particularly in the early stages of building a shared mobility business.
Best =/= biggest
When you hear “burgers” you think “McDonalds”. But when you hear “best burgers in town” you probably think of some local burger joint that you would choose over McDonalds every day of the week.
It's a similar story with shared mobility businesses – most entrepreneurs aspire to be Uber or Bolt, to take over the big cities, and to become a dominant name in the industry. But the reality is that you can find great business success by shining locally.
If you're interested in starting your own shared mobility venture, join our ATOM Academy to learn more and see if it's the right business for you.
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Everything you need to know about micromobility fleet insurance
Discover why fleet insurance is important for shared micromobility operators. Learn how the right coverage provides peace of mind against unexpected challenges.
September 14, 2023
min. read
For shared mobility operators, fleet insurance should be one of the top priorities. No matter the size or composition of your fleet, having the right insurance can offer peace of mind by protecting your business from unforeseen situations
However, the insurance question can sometimes seem daunting – especially if you're new to the industry. In this article, we will explore the key things you need to know about insuring your shared micromobility fleet.
Why you need insurance
Operating a shared mobility fleet isn’t always smooth sailing. Accidents can happen – whether it's a minor fender-bender or something more severe. Insurance serves as your safety net, offering financial coverage for repairs, replacements, and even potential legal obligations after an incident.
Here are the main reasons why insurance should be one of the top priorities for shared mobility fleet operators:
Legal compliance: In many places, insurance for shared mobility fleets is a legal requirement. You probably want to comply with these regulations to avoid any potential fines, penalties – or even the suspension of your operations.
Financial security: Insurance also helps keep your business going financially, no matter what happens. Without insurance, accidents, vehicle damage, or theft can seriously impact your finances. Comprehensive insurance coverage can ensure that you're not left scrambling to cover any unexpected expenses.
Understanding shared micromobility insurance
When it comes to insuring micromobility fleets, part of the challenge stems from the fact that the market is relatively new. Some insurance underwriters avoid dealing directly with micromobility because it's seen as an unfamiliar market.
This is where brokers like Cachet and others specializing in micromobility insurance come in. They partner with various insurance underwriters to provide coverage for operators in this field.
When it comes to shared micromobility, insurance coverage generally has a twofold role: safeguarding assets and handling third-party engagement in the event of accidents.
Liability coverage: Securing third-party public liability insurance for shared mobility fleets is not just a matter of choice – in some places, it's mandated by law. This insurance serves to protect pedestrians and riders in the unfortunate event of accidents, providing financial coverage for injuries and damages that may arise. In other words, it's a safety net that offers peace of mind to operators.
When it comes to mandatory third-party liability insurance, the negotiations with the insurance company usually begin by figuring out what the local authorities require to give them a permit. After that, the insurance policy is adjusted to meet the specific demands outlined by these authorities.
Physical damage coverage: This covers the repair or replacement costs of vehicles if they are damaged due to accidents, collisions, vandalism, or theft. Depending on the policy, physical damage coverage may also extend to equipment like GPS devices, charging stations, and other hardware.
What decides your insurance premium payments?
The amount you'll pay in premiums depends on various factors that are specific to your business This includes your fleet's makeup, where and how you operate, and the level of coverage you're aiming for.
Fleet usage: The more a shared micromobility fleet is used, the more chances there are for things to go wrong. When a fleet is in high demand and used often, there's a greater likelihood that something might happen that requires insurance coverage.
Rider behavior: Insurance companies also consider the fleet's ability to predict and manage undesirable rider behavior. Reckless riding, improper parking, or violating traffic rules can significantly increase the risk of accidents and incidents. Operators that have better measures in place to anticipate and mitigate such behaviors can demonstrate a lower risk profile to insurance providers.
Value of the fleet: How much your vehicles are worth individually and as a fleet will affect how much you pay for insurance. If your vehicles are expensive, your insurance premiums will be higher because it would cost more to replace them if they get damaged or lost.
Size of the fleet: Operators can often negotiate more favorable insurance rates for proportionally larger fleets. As the number of vehicles increases, the overall expected risk is distributed and “diluted” as a result – which translates to lower premiums per vehicle.
However, some brokers like Cachet have embraced a broader approach, ensuring that smaller and medium-sized fleets can also benefit from insurance coverage.
Technology implementation: Shared mobility services that employ technologies like GPS tracking, telematics, and IoT devices can provide insurers with valuable data. This data can then help assess driver behavior and usage patterns, enabling insurers to offer more accurate and tailored premium rates. This also takes into account how simple it is for scooters to be stolen and how well the recovery processes function – which can also play a role in insurance expenses.
Where you operate: The location in which your fleet operates is another important factor. From the insurer’s perspective, different areas pose varied levels of risk. For example, urban mobility – which is associated with a higher risk of accidents – may incur higher premiums compared to vehicles used in rural areas.
Level of coverage: The level of coverage you choose directly affects how much you pay in premiums. Opting for higher coverage limits means you get more comprehensive protection, but obviously, it also means your insurance costs go up.
Choosing the ideal insurance for your fleet
Every shared mobility fleet and business is different, so your insurance needs will depend on things like the type and size of your fleet, where you operate, how much risk you're comfortable with, and of course – how much you are willing to pay.
For example, do you require coverage for specific risks, like vandalism, or perhaps your fleet is composed of premium vehicles that are more expensive? To make it more relatable, let's dive into a practical case of a shared micromobility operator's experience with insurance.
How Hoog found the right insurance with Cachet
The concept behind Hoog Mobility is to revolutionize transportation in smaller Estonian towns. They recognized the need for efficient and eco-friendly local travel and brought a shared mobility solution often seen in big cities but missing in smaller communities: electric scooters.
Cash-strapped mobility startups often worry about potential damage or vandalism happening to their shared vehicles. This concern is shared by traditional insurance companies too. As a result, these insurers might hesitate to provide coverage for shared scooters, and if they do – it's usually at a higher cost.
Faced with this challenge, Hoog initially operated without insurance due to the steep expenses. But that changed when Cachet provided them with a customized insurance solution that perfectly suited the company's needs. Hoog also realized that the initial worry about vandalism wasn't as much of an issue as they thought. But still – having insurance for their fleet turned out to be a sound financial decision that gave them peace of mind.
Concluding remarks
Don't underestimate insurance – it's just as crucial as having a top-notch fleet and solid software. Insurance is best approached proactively – discovering you've cut corners after an unforeseen event will cost you significantly more.
Getting insurance for shared micromobility might be a bit trickier since it's still a new concept, but we've seen that even smaller fleets can make it work – it's just a matter of finding a suitable partner who understands your needs.
At the end of the day, insurance isn't merely about meeting legal requirements – it showcases your dedication to safety, responsible operations, and the well-being of everyone involved in your mobility business.
Blog
Why and how should authorities promote shared mobility
Unlocking the power of shared mobility – how authorities can drive change and improve transportation.
August 31, 2023
min. read
Shared mobility is gaining momentum – offering prospects for reducing traffic, cleaning up city air, and providing users with more flexible transportation options. However, despite its potential, shared mobility often seems to take a backseat to traditional public transportation and private vehicles in the eyes of local authorities and infrastructure planners.
Experts see shared mobility as a game-changing revolution in transportation. It surpasses the earlier revolution of the 20th century when personal cars became widely affordable and accessible. Now, with the rise of shared mobility and environmental concerns, the old notion of "one car per person" is becoming outdated.
In light of this, authorities worldwide should proactively prepare for a future where shared mobility plays an increasingly significant role. In this blog post, we'll explore different ways authorities and legislators can encourage shared mobility – and why it's totally worth it.
The positive impact of shared mobility
Shared mobility has the potential to fix some of the problems we face with transportation today, benefiting users, cities, and the environment. Here are the key benefits of shared mobility:
- Reduced congestion: Shared mobility can alleviate traffic congestion, leading to smoother traffic flow and shorter commute times.
- Environmental sustainability: Shared mobility can reduce the number of vehicles on the road, resulting in lower greenhouse gas emissions and a smaller carbon footprint. This helps combat air pollution and mitigate the environmental impact of transportation.
- Improved transport accessibility and flexibility: Shared mobility services make transportation more accessible, especially for those without private vehicles or limited mobility options. They also offer convenient alternatives to traditional transportation methods.
Considering the urgent need to combat climate change, shared mobility holds a significant promise as a greener transportation option. The European Union's Green Deal aims to achieve a 90% reduction in transportation-related greenhouse gas emissions by 2050. Shared mobility – coupled with increased adoption of electric vehicles and a broader shift in transportation behaviors – will likely play an important role in achieving this goal.
However, for shared mobility to truly flourish and revolutionize transportation, it needs a supportive environment backed by legislative frameworks and infrastructure planning. So, let's take a closer look at how authorities can foster wider adoption of shared mobility.
1. Favorable regulations with an eye on the future
In the past, shared mobility solutions and business models have faced challenges in gaining acceptance from regulators. A prime example is the initial response of local authorities to Uber’s novel services at the time – ordering them to cease their operations immediately.
Shared mobility services can disrupt traditional transportation models – which may not be welcomed by everyone. However, the undeniable popularity of these services, exemplified by the rapid success of Uber, demonstrates the high customer demand.
Instead of battling against it, authorities might want to shift their focus to creating a supportive legislative framework, recognizing the significant benefits shared mobility can bring. It means regulations that prioritize safety, fair competition, consumer protection, and quality standards – creating an environment where shared mobility can thrive and provide reliable services to customers.
Shared mobility is constantly evolving, which means that regulations need to be flexible and adaptable to keep up with emerging technologies and new challenges. For example, as autonomous vehicles become a possibility, authorities will need to establish guidelines for their safe integration into existing transportation networks.
2. A collaborative approach
Collaboration between local authorities and businesses can be a decisive factor in creating a favorable environment for shared mobility. By working together, they can tackle common challenges, share data, and develop integrated transportation solutions.
Public-private partnerships can also involve incentives like tax breaks or subsidies to encourage the adoption of shared mobility. For example, offering tax breaks to companies that implement ride-sharing programs for their employees can encourage the use of shared transportation options instead of individual cars. Similarly, providing subsidies for shared mobility providers can help offset the initial costs of implementing and expanding their services.
Sharing data between shared mobility platforms and transport authorities is another way to benefit from this cooperation. The platforms have valuable information on accidents, trip patterns, and driver availability. Sharing this data with local authorities can help improve the transportation network, enhance travel apps, and identify underserved areas.
3. Building infrastructure to support the future of transportation
To meet evolving transportation needs, authorities should invest in infrastructure that supports innovative modes of transportation like electric vehicles and shared mobility services. By considering the needs of shared mobility users, infrastructure planners can make it a much more attractive transportation option.
Here are the key infrastructure needs for shared mobility:
Integration with existing infrastructure: To offer users smooth and effective transportation choices, shared mobility must seamlessly integrate with current transport systems like public transit. It should enable users to plan multi-modal journeys and switch between different modes of transport without hassle. For example, users should be able to seamlessly transition from a shared bike or scooter to a bus or train.
Charging stations: Keeping shared electric vehicles performing at their best relies on maintaining their charge. This requires establishing a network of strategically positioned charging stations throughout urban areas. If we're aiming for more people to use electric vehicles, we need to make charging them easy and accessible.
Dedicated parking: Shared mobility services need designated parking areas for their vehicles, such as bike racks and car-sharing parking spots. Well-organized parking infrastructure can reduce street clutter and make it easier for others to grab a shared mobility vehicle.
Information infrastructure support: Running shared mobility services smoothly, including handling bookings, payments, and logistics, depends greatly on a reliable information infrastructure foundation. With the advent of advanced networks like 6G, users will increasingly rely on this infrastructure to stay connected and make the most of these services.
The shared mobility landscape in France
Paris's recent ban on free-floating e-scooters has put France in the spotlight. To take a closer look at the shared mobility environment in France, we turned to Manon Lavergne, CEO of Viluso, a shared micromobility operator. We asked for her insights on the state of micromobility in the country.
Since the Mobility Orientation Law in 2019, the French government has been working to make shared transport easier to access everywhere. At COP 26 in 2021, France undertook to cut its CO2 emissions by 55%.
According to Manon, personal vehicle ownership in urban settings is losing favor among many French citizens, and Paris stands out as a shared micromobility epicenter. The city pioneered self-service shared mobility networks like Vélib' (2007), Autolib' (2011), and Cityscoot's shared electric scooters (2016).
However, in April 2023, Paris residents voted to ban free-floating e-scooters in the city. The reasons behind this decision included riders competing for space with pedestrians on sidewalks and complaints about e-scooters cluttering the pavements when parked.
Captur's case study on e-scooter parking habits in Paris revealed that the majority of users encountered no problems when parking scooters in designated bays. However, outside of the designated areas, users had to compete with other vehicles, resulting in poorer parking choices.
This example again emphasizes the need for proper infrastructure to support shared mobility. Lots of cities around the world were mainly designed with private cars in mind – which can create challenges for accommodating shared mobility solutions.
Anne Hidalgo, Paris' Mayor, campaigned with a strong green agenda and has introduced various changes to tackle pollution and traffic jams. Her vision includes a "15-minute city" where people can access work, shopping, healthcare, education, and leisure within a 15-minute walk or bike ride from their homes.
Yet, the chaotic state of free-floating e-scooters in Paris resulted in their ban. This scenario raises a question for other global cities: How can shared mobility be encouraged without disrupting other transportation choices and pedestrian movement?
According to Manon, the upcoming 2024 Olympic Games in Paris, which will draw many visitors, will provide valuable insight into the city's transportation system – including the viability of shared mobility.
Shared mobility is here to stay – so start planning today
By adopting a supportive approach, authorities worldwide can play a crucial role in enabling the full potential of shared mobility. While it may require a shift in mindset, the potential gains of reduced congestion, environmental sustainability, and improved transportation options make it a worthwhile consideration.
We know that shared mobility is here to stay and will only expand in the coming years. By taking a more proactive stance, authorities will be in a better position to integrate and maximize the full benefits of shared mobility.
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