How to find profitability in the e-scooter sharing industry – a conversation with Bullride
September 8, 2022
min. read
When it comes to the future of e-scooter sharing, there are some pretty conflicting opinions out there. Some say it's the future of micromobility, others are less optimistic.
Ultimately, the success of scooter operators all depends on their ability to find profitability.
Let's be honest – this industry has higher-than-average overhead costs. The hardware itself is a major investment, and profits are further seeped by the maintenance workforce, storage, relocation costs, and new regulatory requirements that are regularly introduced.
But profitability is possible.
We spoke to Heiko Hildebrandt, co-founder of Bullride, which helps mobility companies offload their assets from their balance sheet to keep them in the black.
The state of the scooter industry – hopeful
The economy is just starting to stabilize as we exit the Covid slump and enter the new normal. How did Covid affect the micromobility sphere?
A study published in Bloomberg found that monthly ridership fell drastically in 2021, but made a comeback in 2022 when people returned to office.
Source: Bloomberg
Now, that's using US-based brands as a model.
Heiko Hildebrandt shares that the scooter operators he's worked with have experienced a similar effect:
“Corona was the greatest fuel you could pour onto the micromobility fire. During Corona times, people hardly used public transport, and most people switched to scooters. We saw two of the biggest micromobility brands in Europe, Bolt and Tier, raise record-setting VC investment at the end of 2021 – totaling 1.4B EUR – a clear sign of traction. And since Covid has ended, we've seen a 30%-40% slump in demand. So was Covid bad for business? Not according to my perspective.”
However, according to Heiko, the real challenge is to make the unit economics work. Because the question is not about whether the product is in demand. The question is does it make sense from a business perspective.
The challenges the scooter industry faces
The scooter industry, while in demand, must face challenges that directly impact their unit economics. For some businesses, it pushes them over the edge and drives them into insolvency.
By knowing what those challenges are, scooter businesses can better set up their business models to protect their profitability.
Rising hardware costs
In order for a scooter's lifetime to be profitable, it has to be in use for at least 2 seasons – some even say, for 4 years. That means that the scooter has to be durable, easily maintained, with cost-efficient replacement parts.
“Scooters are usually imported from abroad (mostly China), and shipping costs are now 8x higher than they were two years ago. The costs of electronics components are ever increasing.”
Jürgen Sahtel, Manager of the ATOM Vehicle Marketplace, agrees that the prices have gone up over the past two years.
“For example, hardware prices for the new Segway models have increased more than 40% over the last 16 months. And this trend is across all manufacturers – new scooters could be obtained starting from 650EUR and up, while more advanced models readily available in EU are priced at around 1000EUR per unit.”
The hardware is one of the biggest up-front investments that a scooter operator faces. But it's also critical to balance cost with quality, as you need to be so resilient that it can withstand public use over the course of 2-4 years.
Expanding regulation
When the e-scooter sharing industry took off, the industry was so fresh that there wasn't any regulation in place to keep it in check. It was the wild west, and operators were able to take advantage of the regulatory grey area.
Now, municipalities are starting to crack down on the industry and putting laws into place. Regulation, overall, is a good thing. However, the way it's done now shows a lack of understanding about the unit economics and its regulation that is being enacted.
“Most municipalities are limiting the size of a fleet that one scooter competitor can have. Their goal is to reduce the amount of scooter clutter on the streets. But that number is often too low to ensure what we call “natural floating” – the process of humans moving the scooters around the city. This puts a larger strain on relocation and charging teams.”
Other burdens placed on scooter brands is the stricter demarcation of allowable parking zones. This is a factor that impacts relocation teams – those responsible for bringing scooters from less popular zones back to city centers and transport hubs. Additionally, mandatory tenders with the municipality are usually offered only for one year, making planning rather difficult.
A new trend that Heiko mentions seeing from a regulatory perspective is the emergence of mandatory insurance.
“Scooters used to be classified as bikes, and thus, similarly regulated. Now, they're being reclassified as motored vehicles, which have different regulatory requirements, including mandatory insurance.”
This further skews the unit economics of each ride.
On the other hand, regulation can also play an enabling factor. Heiko shares that if tenders could be extended for, say, 3 years, it could provide scooter brands with planning stability. If municipalities limited only 2 competitors in a city, this would ensure enough demand to make the unit economics work.
Finding profitability in unlikely places – Bullride's unique business model
Heiko believes that the future lies in the shared economy. He's among the 4 co-founders of Bullride, an investment platform that shoulders the burden of the hardware investment and splits the scooter rent with the operating brand.
How does it work?
- The Bullride platform crowdfunds the costs of the initial scooter investment. These people become your investors. Instead of giving away equity (ownership) of your company, they end up “owning” one of your scooters (1 scooter = 1,000 EUR).
- The order is made into one of the top scooter manufacturers that have the best longevity – Bullride does this for you.
- You split the rental income – 55% for you, 30% for investors, 15% for Bullride.
The idea works for a number of reasons.
- You'll need money. A bank is unlikely to fund a scooter venture (because of historically low profitability), and a VC will ask for equity. This way, you get the investment, while retaining full control.
- Bullride has very specific requirements. They know what works, and what doesn't. They only work together with entrepreneurs that meet their very strict requirements. That includes entering a city that has no more than 2 competitors, and a city that has no more than 100,000 inhabitants. 30,000 is the ideal sweetspot. You also only have one employee – and that's you.
The operating brand then may use a leading vehicle-sharing platform ATOM Mobility, to fast-track their time to market. ATOM takes profitability even further with its unique pricing model. Instead of the common model of cost-per-vehicle, ATOM uses a cost-per-ride model. That means that if you have less demand (and as a result, less income) in a certain month, then you pay less for use of the ATOM platform.
But scooter sharing is just the beginning. This same model, Heiko believes, can be applied to e-bikes, e-scooters, carsharing, even wind turbines and major investments like that. Why shouldn't a community be able to jointly invest in and co-own the infrastructure that they need to live?
This is a unique model that hasn't been commonly seen elsewhere. It's more than just scooters – Bullride believes that at the heart of it, what they're doing is democratizing asset ownership.
If you're looking to launch or scale your own vehicle-sharing business, contact the ATOM Mobility team to learn more abut this opportunity.
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Who does carsharing better – OEMs or start-ups?
🚗📉 Why do big car brands struggle in carsharing while independent startups thrive? OEMs like Volvo and SEAT have shut down, but new players like Kia are stepping in with smarter strategies. Meanwhile, independent operators like GreenMobility are scaling fast. 🔍 What’s the secret to success in carsharing? It’s all about adaptability, cost control, and tech partnerships.
February 7, 2025
min. read
Who does carsharing better – OEMs or start-ups?
The carsharing industry is at a crossroads. Once hailed as the future of urban mobility, it has seen a mix of success and failure, with some players thriving and others closing shop. So we ask: why do some carsharing ventures fail while others continue to grow? And more importantly, what does it take to run a sustainable and profitable carsharing business in today’s competitive landscape?
Recent developments have been telling. Two OEM-backed carsharing ventures have recently shut down, while independent operators continue to expand, and a new entrant – Kia – has just launched its own service. This article takes you into the challenges, key success factors, and the evolving role of technology in the industry.
OEMs vs. startups: What's the difference?
Before diving into specific cases, it’s important to clarify what OEMs (Original Equipment Manufacturers) are and how they differ from startups. OEMs are traditional car manufacturers – companies like Kia, Volvo, or Ford – that primarily produce and sell vehicles under their brand names. Some OEMs have expanded into mobility services, including carsharing, but often struggle because their main focus remains on car sales.
In contrast, startups and independent operators like GreenMobility are built from the ground up as mobility service providers. They don’t manufacture cars but instead focus entirely on the carsharing experience, optimizing operations, technology, and customer service. This difference in core focus often determines success or failure in the carsharing industry.
OEM carsharing ventures
Automakers have long recognized the potential of carsharing as a way to diversify revenue streams, enhance brand loyalty, and explore new mobility business models. However, history has shown that simply putting cars on the streets and creating an app isn’t enough to make carsharing work.
Several OEM-backed carsharing services have struggled to maintain profitability. Volvo’s Volvo On Demand recently announced its closure as part of a broader strategy to optimize costs. Similarly, SEAT ceased operations at the end of 2024 due to declining demand and rising operational costs (€31 million total losses, with €11 million lost in 2023 alone, against a turnover of €16 million).
The challenges OEMs face in carsharing stem from several factors:
- High operational costs: Fleet management, maintenance, insurance, and parking fees add up quickly.
- Consumer behavior: Unlike leasing, carsharing requires a behavioral shift from users, who must plan trips around vehicle availability.
- Integration challenges: Traditional automakers are structured around car sales, not service-based mobility solutions. This makes it difficult to operate carsharing efficiently.
However, these closures don’t necessarily mean that carsharing itself is an unsustainable model. Instead, they highlight the need for a different approach – one that independent players are executing more effectively.
New entrants and independent operators
While OEM carsharing ventures struggle, independent operators like GreenMobility are experiencing growth. Unlike traditional automakers, these companies are built from the ground up as mobility service providers, allowing them to operate more efficiently.
GreenMobility’s growth can be attributed to:
- A laser focus on carsharing: Unlike OEMs, which juggle multiple business lines, independent companies dedicate their entire strategy to optimizing the carsharing experience.
- Smart cost control: Leveraging technology for fleet management and maintenance allows them to run lean operations.
- Strategic market selection: Choosing the right cities with high demand and favorable regulatory environments plays a huge role in their success.
By leveraging a digital-first approach, these companies are able to optimize vehicle utilization, reduce operational costs, and offer a seamless user experience—something OEMs often struggle to achieve.
Does KIA’s entry in carsharing bring new hopes?
Amidst the shifting landscape, Kia has entered the carsharing market with its new service, Hyr & Dela. Unlike previous OEM carsharing attempts, Kia's model focuses on businesses rather than individual consumers. This service allows companies to rent vehicles on a monthly basis and share them among employees, partners, or customers via a digital platform.
Why does this approach make sense?
- Higher vehicle utilization: By targeting businesses, Kia ensures that its vehicles are in use more frequently than traditional consumer-focused carsharing models.
- Fleet management efficiency: A B2B-focused model allows for easier scheduling, tracking, and maintenance planning.
- Electric vehicle (EV) adoption: Kia’s service aligns with the growing trend of businesses adopting EVs for sustainability goals.
If executed well, Kia’s corporate-focused carsharing model could prove to be a sustainable business approach, avoiding many of the pitfalls that plagued previous OEM carsharing attempts.
5 lessons we have learned from this
So, what can current and future carsharing ventures learn from these experiences?
1. Adaptability is key
Rigid business models and a lack of flexibility are major roadblocks to success. Carsharing services need to be highly adaptable, leveraging data to adjust pricing, fleet locations, and service offerings dynamically.
2. Cost management determines longevity
Carsharing is a capital-intensive business. Operators need to optimize fleet efficiency, reduce downtime, and control maintenance and insurance costs. This is where independent operators often outperform OEMs, as they are more agile in managing expenses.
3. Technology is a game-changer
A carsharing platform is only as good as its technology. Companies partnering with mobility tech providers like ATOM Mobility can benefit from advanced booking systems, automated fleet management, and data-driven decision-making—key elements for a seamless and cost-effective service.
4. Market selection matters
Choosing the right city or region for carsharing is crucial. Factors like public transportation integration, parking regulations, and urban population density can make or break a carsharing business.
5. OEMs need a service-oriented mindset
Carsharing is not just about providing access to vehicles—it’s about service excellence, convenience, and user experience. For OEMs to succeed, they need to rethink their approach and adopt a more customer-centric mindset.
The future of carsharing
The carsharing industry is at an inflection point. While some OEM-backed services have faced hurdles, independent operators like GreenMobility and strategic initiatives like Kia’s Hyr & Dela show that success is still possible with the right approach. The key lies in adaptability, cost control, technology integration, and market focus.
As the industry continues to evolve, Kia’s entry into corporate carsharing is an exciting development. With a smart strategy and strong execution, they have the potential to carve out a successful niche in the market.
We’ll be keeping an eye on Kia’s progress and, in the meantime, wishing them the best of luck in their new venture. Let’s hope they are here to stay!
Blog
How to find your niche in the competitive ride-hail market: real-world examples of businesses that resonate
💡Want to break into the ride-hail market but don know what’s your angle and how to make yourself visible in an already packed field? Check out how InDrive, BLACWOLF, and COMIN found their unique angles to thrive in a competitive space! 🚗
December 18, 2024
min. read
The ride-hail market is crowded, fiercely competitive, and often dominated by household names like Uber and Bolt. But don’t let the giants fool you into thinking there’s no place for you. With some creative thinking and a unique angle, you can get on the road quite quickly. The secret? Finding the one thing that sets you apart from others. Let’s explore how some notable players (both veterans and newcomers) have done just that.
InDrive: A pioneer in price negotiation
🔹 Over 200M downloads, active in 700+ cities across 45+ countries
🔹 Unique feature: Set your price - Riders offer a fare, and drivers can accept or negotiate!
🔹 Drivers pay no commission, just a small monthly subscription, giving them better earnings.
🔹 Unique market entry: Initially free usage for drivers (no commission, no subscription).
Before we discuss the latest players, let’s revisit InDrive, a company that entered the market years ago with an approach that sounds almost too simple to work – offer your price.
The idea is straightforward. Instead of accepting a fixed fare, riders suggest how much they’re willing to pay. Drivers, in turn, can accept, counter, or reject the offer. It’s a dynamic that mirrors haggling at a bazaar but digitized for the modern commuter.
This model resonated. Riders felt empowered, and drivers appreciated the flexibility, especially in sensitive markets where fair pricing is a concern. InDrive rapidly scaled across emerging markets like Latin America, Russia, and Southeast Asia, regions where affordability and negotiation are cultural norms.
The takeaway here? InDrive’s “offer your price” model wasn’t just a fun gimmick, but a solution tailored to specific markets and demographics, offering fair rides to anyone who needs it. If you’re entering the ride-hail space, ask yourself: what unique cultural or social nuance can you leverage to disrupt the market in the region?
BLACWOLF: The armed and ready approach
🔹 Unique feature: Focus on rider security with armed & trained drivers 🛡️
🔹 Launched in Atlanta (2023), now expanding across Arizona, Florida, Georgia, Tennessee, and soon Houston, Austin, and Dallas!
🔹 Over 300K downloads in just 1.5 years.
Now, let’s fast-forward to the present and head to the U.S., where BLACWOLF has entered the scene (launched in Atlanta, 2023), now expanding across Arizona, Florida, Georgia, Tennessee, and soon Houston, Austin, and Dallaswith an eyebrow-raising twist: drivers who carry firearms.
BLACWOLF was launched in response to concerns over driver and passenger safety. Their USP (unique selling proposition) is ensuring peace of mind through armed drivers. As their slogan says, “We didn't reinvent ride-hailing; we just made it safer.”
As controversial as it sounds, it’s resonating in specific markets like Houston, where personal security is a priority for many.
This approach has gained traction, especially among passengers who prioritize safety or feel underserved by existing ride-hail platforms. Of course, it’s not without its challenges. Regulatory hurdles and liability concerns spring to mind; however, BLACWOLF is scaling rapidly, proving that a polarizing angle can still be a winning one.
Don’t shy away from bold ideas that cater to real pain points. Whether it’s safety, convenience, or cost, identifying an underserved need can help you stand out in a crowded market.
COMIN: France’s bid-for-ride disruptor
🔹 Unique features: Offering a fair 10% commission and Set your price feature (similar to inDrive).
🔹 Quickly onboarded 6,000 drivers, capturing 15% of the market in record time.
Over in Europe, a fresh player called COMIN is shaking things up in France. This newcomer has onboarded 6,000 drivers, taking 15% of the French market almost overnight, a feat that’s turning heads across the industry.
COMIN’s secret sauce? A bidding system that allows passengers to submit offers for rides, giving drivers the choice to accept or negotiate. Yes, it’s like InDrive, but with a hyper-local twist tailored to France’s market dynamics.
To fuel their growth, they’ve also raised €300,000 in seed funding from Station F, Europe’s largest startup incubator. By focusing on one market and perfecting their model, COMIN has avoided doing too much at once—proof that a focused approach often trumps trying to be everything to everyone.
For aspiring ride-hail entrepreneurs, COMIN serves as a case study in starting small but thinking big. Specializing in one region or demographic before expanding can help you gain traction and refine your offering.
The ride-hail market may look like a fortress, but even the strongest walls have cracks. With creativity, boldness, and the right platform to support your vision, there’s no reason you can’t break through and thrive. Are you ready?
How ATOM Mobility can help
So, you’ve got your groundbreaking idea. What’s next? To turn your vision into a reality, you’ll need a robust platform to build on—and that’s where ATOM Mobility comes in.
ATOM provides a ready-made platform for entrepreneurs looking to launch ride-hailing or mobility services. With customizable tools, seamless integrations, and scalable tech, ATOM lets you focus on your unique value proposition while we handle the backend.
Ready to make your mark in the ride-hail world? Join ATOM Mobility today and start your journey!
Driver App demo credentials - Email: test@atom.com, Password: driver
