👉 How to launch a vehicle sharing business in 6 steps

👉 How to launch a vehicle sharing business in 6 steps

Millennials and younger generations tend to be reluctant to buy items. Instead, they prefer to have access to products via different sharing models. “25 years from now, car sharing will be the norm, and car ownership an anomaly,” says author and economist Jeremy Rifkin in the latest Goldman Sachs Global Investment Research.

What we experience in Atom Mobility - a platform that can be adjusted to any sharing model and type of vehicle - is that people of any age are willing to share vehicles they own. From cars to e-scooters and even forklifts. Moreover, people are willing to start their own businesses based on sharing.

This will be a practical guide for those who are seriously considering starting a sharing business. As this business niche isn’t new, a lot of people have suffered bumps during the launch process and have learned their lessons. Atom Mobility has collected them and created a practical guide highlighting what you should consider when you are considering entering the vehicle sharing business.

🛴  Choose the vehicle type and operation model

This seems like a simple decision, but it’s not. Currently, the most popular vehicles for sharing are bikes and e-bikes, scooters, e-mopeds and cars. If you already own a fleet, then the offering will be obvious. If not, you’ll have to start by calculating which vehicle type you can afford. Here is some meaningful insight into the difference between launching a vehicle sharing business with scooters, e-bikes, and mopeds. By the way, the brand is not important. The most important parameter that can later reduce maintenance costs is the quality of the IoT system fitted into the vehicle and, of course, the quality of the vehicle itself.

You will need a minimum of 50-100 vehicles to start your business. Accordingly, you can calculate the amount of the initial investment you require. Obviously, car sharing requires way more money than creating a bike fleet of 100 vehicles. However, leasing is also an option. In addition, you have to do the market research, because your success depends on demand - if there are already two or three companies in town offering e-scooters, you will have to invest a lot of money on marketing to persuade people to use your services instead those of your competitors. So you should probably consider choosing another type of vehicle to establish a point of difference and thus secure competitive advantage.

When you start to do your calculations, start with the vehicle price. From one perspective, this is the easiest part, but it is very important to calculate:

How many rides should be taken with one vehicle during the day for it to be profitable? For example, take a look at this Shared Mobility Report from France. It might help you to get an impression of the demand and fragmentation of the market.

What is the value of one ride? Bear in mind that the price per ride in a car is approximately three times higher than on a bike, but so are the expenditures.

What is the structure of your costs? You have to insure every vehicle. Taxes have to be paid and vehicles have got to be inspected from time to time. Are all these positions included in your cost estimate? By the way, this is a great resource with an Excel table showing how market leaders estimate their income and expenses.

 

 

The next decision to make regards the sharing model. Currently, there are several on the market that have demonstrated proven value:

Charging stations - there are charging stations all over the city. When the ride ends, the vehicle is left at a charging station and it is charged in readiness for the next time it is going to be used. Although this approach can create significant additional costs, it lowers everyday servicing costs.

Free-floating vehicles - shared vehicles can be left wherever it is convenient for the customer. The city council may not be happy with it as this model sometimes clutters up the streets. So you should definitely check out whether there are any existing regulations in this regard before you launch this model.

B2B or corporate vehicle sharing - the company owns the fleet that can be used by their employees. This is quite a secure way to run your business, but you will need to sell it to other SMEs which is not an easy task and requires significant sales resources and expertise.

P2P sharing - anyone can register a vehicle on the platform, which can be rented by any other user. This may seem easy, but it is actually quite complicated, because the owner is putting his property on the platform which he wants to get back in the same condition as it was before. As a sharing service provider, how can you guarantee that the vehicle won’t be broken? You should run background check on users, as well as have insurance in case anything happens.

You can also read more about different operational models here.

🏢  Check the city regulations

In recent years both the demand and offering for ridesharing have grown to such an extent that cities have been forced to regulate this business sector. If you are planning to operate within city limits, you’ll definitely have to check out the relevant legislation.

Regulations may be in place that have been set by the City Council. So the first thing to find out is - is vehicle sharing allowed at all? In cities with high vehicle ridesharing service and density, the city council might organize tenders to identify which companies can provide the most appropriate ridesharing service. Other requirements for companies might also apply, so you should monitor this situation carefully.

As far as density is concerned, there’s no point in creating a new ridesharing business if the vehicle density is already more than 700 shared vehicles per 100,000 people. If the ratio is one shared vehicle per 100 - 140 people, very careful calculations should be done as it could signal that the market is overcrowded so demand might be low.

 

 

💰 Consider all costs

Every business plan starts with an Excel sheet. As always, it is not possible to predict all costs but you can sneak peek into existing companies and take a look at their cost structure. You should take the following items into account:

Maintenance costs - every vehicle now and then will have to be repaired.

Vehicle purchase and depreciation costs - you need to know after how many kilometres you are going to have to replace your existing vehicle with a new one.

Charging costs – you will need a team to take care of vehicle charging. Of course, costs will differ depending on the ridesharing model, but there are going to be charging costs in some shape or form.

Bank commissions and payment transaction costs - even if you haven’t used credit to buy vehicles, your bank will still charge you commission for its services. If you use Stripe, Adyen, or a similar payment operator, you should take into account additional costs for every transaction.

Marketing - it is vital to go loud upon launch so that everyone notices the new company in town. This requires a sizable marketing budget. If you decide to use promo codes, free rides, and other bonuses to attract new customers, this will reduce your profit margin on a certain amount of rides.

Customer support - customers always have questions, which they will ask via Messenger, phone or any other platform. You have to have a team in place that can provide answers right away.

IT system support - it is crucial that the service is up and running all the time. And there are a lot of different parts involved starting from software to IoT systems and data.

Additional costs - always leave space for unplanned costs. The industry average is approximately 3 - 5% per ride.

At this point, you are ready to start to talk to manufacturers, haggle about prices, and ask them to send you a vehicle for a test. You should not forget to discuss the prices and delivery policy of spare parts, in order to avoid unplanned downtime.

🤑  Financing options

If you already own a company and see ridesharing as an additional direction in the development of your business, then most likely you will be ready to invest in its launch. If not, and you are planning to start a new company, the first thing to consider is how can you launch a test? The idea of a vehicle sharing business alone will not be enough to attract investors or convince banks to give you a loan. You will always have to prove that this business can really take you somewhere in this particular place. And a successful test with a small number of vehicles could be good proof.

You could consider crowdfunding as an option if you want to get some seed capital. Consider choosing the most popular platforms like Spark Crowdfunding, Seedrs, Fuderbeam, or Crowdcube. They are so interested in your success that they will also put their effort into marketing your campaign on their channels. This is your opportunity to make some savings on your marketing expenditures, which will definitely benefit you later on.

 

 

🛵  Plan fleet management

So far so good. You have a plan and a budget, so what’s next? Now you have to put your fleet management system on paper:

Maintenance and charging - at the end of each day you are going to have to check the condition of every vehicle. Does it need to be charged? Is everything working smoothly or do some details need to be changed? This everyday care usually “eats” 30 - 40% of overall costs.

Spare parts - you should be ready to spend about 10% of the total value of the vehicle on spare parts. In addition, you should have a proper warehouse. Losing 30% of the fleet for three months due to a spare parts’ shortage is a nightmare for any business.

People on the streets - your company will require two employees per 100 vehicles to inspect and collect them. So estimate their salaries. Remember that these people won’t have regular working hours. They might charge you overtime for work at night. And another thing to consider is how they are going to get about the city. If the vehicle is broken, how are they going to be able to take it to be serviced?

Customer support - no matter how mature the market is - your customers will always have questions. Who’s going to answer them? Remember that customer reviews create a rating that builds the further success of the company.

As the ridesharing business is becoming more popular, you should probably consider outsourcing the vehicle service. There are new companies on the market that focus on servicing vehicle sharing platforms.

📈  Build your marketing strategy

Marketing starts with the brand. You have to decide whether you’re going to hire a marketing agency or work with the designers and marketers yourself. Either way, you will need a brand name, logo, web page, and corporate colours.

Our experience shows that the success of the launch event is a bridge to the future success of the vehicle sharing company. So it is really worth focusing your attention on the big bang at the beginning. It is crucial to get as many downloads during the first days of the operation as possible. Even if not everyone uses your service straight away, you will have a database of potential customers with whom you can work, for example, by sending push notifications - consider using Intercom or Mailchimp for this.

Oftentimes collaboration with influencers is a good channel to use. And local media are interested in vehicle sharing businesses entering the city. But never forget social media - it is the most appropriate channel for marketing, as well as quick responses to customer requests.

Now sit back, relax and enjoy your amazing results… 😆  No, the vehicle sharing business doesn’t work that way. During the first month you will have to put a lot of your effort and the effort of the whole team into adapting your initial plan to real life. The first season is usually full of experiments and failures, but the most rewarding part of this business is the opportunity to scale.

👍 ATOM Mobility is here to help you with all the challenges you will face. ATOM Mobility provides reliable and proven white label technology helping entrepreneurs to focus on marketing and operations. Now serving customers in over 15 countries worldwide. Check what our customers are saying: Story of Ride, Story of Qick, Story of GOON

Interested in launching your own mobility platform?

Click below to learn more or request a demo.

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Ride-hailing vs ride-sharing – what's the difference?
Ride-hailing vs ride-sharing – what's the difference?

🚗 🛴 🛵 Ride-hailing, ride-sharing, carpooling, car-sharing, on-demand rentals, micro-mobility rentals, shared transportation, Mobility-as-a-Service… It's a bit much, isn't it? No wonder people prefer using and verbing brand names, e.g. “Uber to the airport” or “grab a Bolt”. 🔦 But, don't worry – we'll help you find your way in the mess that is the mobility industry's terminology. Understand the difference between ride-hailing and ride-sharing, discover what is MaaS, and learn a fun fact about Uber in our latest article 👇

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It's easy to get lost in today's mobility landscape. It feels like every year a new type of vehicle hits the streets, and with it comes some weird new term or category adding to an already deeply confounding list – ride-hailing, ride-sharing, carpooling, car-sharing, on-demand rentals, micro-mobility rentals, shared transportation, Mobility-as-a-service,...

No wonder people prefer using and verbing brand names, e.g. “Uber to the airport” or “grab a Bolt”. 

In reality, it's not that complicated. Virtually all of the terms listed above are self-explanatory and by the end of this article you'll have a firm grasp on the industry's terminology. 

Understanding the distinction between these various concepts is important for entrepreneurs and anyone else looking to set foot in the industry, as using the correct terms:

  • Ensures everyone is on the same page, 
  • Is relevant for regulatory compliance,
  • Matters in all your business endeavors from market research to strategy development. 

Since the two terms that people get most hung up on are “ride-hailing” and “ride-sharing”, we'll take a closer look at those, and then follow it up with a disambiguation of the other terms on our list. 

What is ride-hailing?

Ride-hailing is – surprise, surprise – the hailing of a ride. Much like with a taxi, it involves hiring a person with a car to pick you up and take you to your destination. 

So why don't we just call it a taxi service? 

When mobility startups like Uber came to prominence in the early 2010s, they did so by disrupting the cab industry through digitalizing the hailing experience and introducing transparent pricing. 

Read more: Uber's company history.

In other words, you could now hail a ride through an app on your smartphone and see exactly how much it would cost. Whereas previously, you had to call a taxi service or try to hail one on the street. 

So the term “ride-hailing” was coined to distinguish this new type of on-demand app-based taxi service from the more traditional one. However, over the years, the ride-hailing service portfolio has evolved beyond just taxi-like operations and includes things like hiring drivers for moving, or even taking your kids to school. Traditional taxi companies also increasingly make use of a ride-hailing app

Accordingly, the meaning of ride-hailing is the hailing of on-demand transportation services via an app. Most often it's used in the context of taxi-like services, but it's an umbrella term that can include other services, too. 

Fun fact: did you know that Uber was originally named UberCab? Its founders dropped the “Cab” part since they didn't see themselves as a traditional cab service.

What is ride-sharing?

Again – the hint is in the name. At the most basic level, ride-sharing is sharing a ride. But, as with ride-hailing, there's some nuance that's important to understand. 

Today, ride-sharing typically refers to multiple passengers sharing a single private ride on a route that passes their various destinations. You can think about it as on-demand carpooling. 

Let's unpack this. 

Though there are many similarities between ride-sharing and carpooling, they generally differ in terms of ride organization and journeys. Carpooling often happens informally, in the sense that a group of neighbors or coworkers traveling or commuting on the same route will agree to share a ride to, for example, save on gas. Carpooling can also be very sporadic and is primarily organized through private channels or local bulletin boards. 

On the flipside, ride-sharing allows a person to carpool with others by simply finding an available seat through an app – drivers digitally share their route and seat availability and passengers can hop into a suitable ride for a small fee. 

Notably, ride-sharing is often most popular with busy routes and times of day, as that's when there's highest demand. 

There's a reason why a lot of confusion arose regarding the difference between ride-hailing and ride-sharing, namely, the terms were used interchangeably early on. To this day, “Ride-sharing” is sometimes used as an umbrella term for all app-based mobility solutions, though this is going out of fashion, given the clearer differentiation between solutions. 

So, while both ride-hailing and ride-sharing are app-based on-demand mobility solutions for getting to a destination in a private vehicle, they differ in passenger count, cost, route, availability, and popularity. 

Other terms commonly used in the mobility industry

Though ride-hailing and ride-sharing are categories you'll hear most often, it's almost inevitable that you'll encounter other terms, which may sow further confusion. 

Let's avoid that – here are some quick explanations of other popular terms.

Car-sharing

Car-sharing or vehicle-sharing is most often confused with ride-sharing, but despite sounding similar, they mean completely different things. Car-sharing refers to the app-based short-term rental of cars. The easiest way to remember it is that with ride-sharing people share a single ride, whereas with car sharing people share a single car – again, it's all in the name. 

On-demand rentals

On-demand rentals is a category describing vehicles that are instantly available for rent, usually through an app. This includes both micro mobility solutions, like scooters and bikes, as well as larger vehicles like mopeds and cars. For those following along – yes, car-sharing is a type of on-demand rental! 

Shared transport

As mentioned in the previous sections, “ride-sharing” is often incorrectly used as an umbrella term for all on-demand app-based mobility solutions. The correct term is shared transport or shared mobility. Shared transport is a broad category that includes both multiple people sharing a vehicle simultaneously (i.e. ride-sharing), as well as individual people sharing a vehicle over time (i.e. car-sharing/on-demand rentals). 

Ride-hailing and other on-demand services related to mobility are also often categorized under the shared mobility umbrella. 

Mobility-as-a-Service

Mobility-as-a-Service or MaaS is an approach to urban transportation that seeks to integrate a variety of mobility options (both public and private) into a single super-solution that answers a traveler's every mobility need. Often, MaaS solutions are sought out by local municipalities to provide effective alternatives to car use and minimize a city's carbon footprint. 

Is the terminology really that important? 

As you can see, a lot of the confusing mobility terms are simply categories and categories of categories – don't worry if you can't remember them all. If you know the difference between ride-sharing and ride-hailing that's already plenty. 

Anyone in the mobility industry will tell you that it's perfectly acceptable to ask for clarification when talking specifics, as it's common for people to interpret these terms differently, and language barriers can be particularly troublesome for getting on the same page. 

That said, you SHOULD pay close attention to the terminology if you're doing research for your own mobility business. A ride-hailing business is completely different from a ride-sharing one, and it's important not to compare apples to oranges during market research, as it can undermine your business from day one. 

Other than that, all you have to remember is that ride-hailing is hailing a ride and ride-sharing is sharing a ride. Simple as that.

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New feature that will boost your fleet uptime and client satisfaction – vehicle damage management
New feature that will boost your fleet uptime and client satisfaction – vehicle damage management

New feature alert! Say hello to vehicle damage managemet 👋 With this solution, you can boost your fleet uptime and improve client satisfaction by: 🔎 Learning about necessary repairs more quickly 🔧 Easily managing the repair process ⭐ Turning a negative customer experience into a positive one

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Is there anything more frustrating for a mobility user than needing quick access to a vehicle and having none available nearby?

Yes – finding a vehicle on the app, making your way to it, and discovering that it's broken. 

Vehicle damage comes in all shapes and sizes from broken scooter kickstands and headlights to damaged moped QR codes and car engine issues. Even minor damage to a vehicle can severely affect its usability, putting it out of order until a ground operations team catches and resolves the issue.

Worst of all, it's often the customer who first encounters the problem and does so during one of the most sensitive parts of the user journey, namely, when they have an acute need for transportation. 

As a result, unresolved maintenance issues are not only directly hurting your bottom line by taking one of your vehicles off the road, but they may severely negatively impact client satisfaction, too. 

That's why the ATOM Mobility team has added a new solution to the vehicle-sharing and rental modules – vehicle damage management

Let's take a closer look at this new feature, explore why it's important, as well as understand how it works from both the user and operator perspectives. 

Vehicle damage reporting – a better experience for everyone

In the simplest terms, the new feature allows users to easily report any vehicle issues through the app – and for your operations team to effectively respond to and manage the reports. This helps your mobility business in several ways. 

ATOM Mobility's vehicle damage reporting feature:

  • Increases the speed at which you receive information about necessary repairs for your fleet,
  • Enables you to respond to this information in an organized manner, as it streamlines operator tasks through the Dashboard and Service app,
  • Equips users with a clear communication channel for reporting issues.

In unison, these help you ensure maximum uptime for your fleet, as well as offer various other benefits. These include:

  • Identifying issues that routine maintenance might miss, e.g. a trunk stuck shut, 
  • Resolving customer anxieties by letting them report problems, e.g. people might be hesitant to use a damaged vehicle in case they get blamed for the issues,
  • Giving you better control over the customer experience, e.g. turning a negative encounter with your brand into a positive one through communication,
  • Easily tracking maintenance history for your fleet, e.g. discovering which vehicles fail often and require replacement. 

Simply put, this new feature is a positive for everyone involved. All you need to do is set it up – let's find out how. 

How does vehicle damage reporting work? 

On the surface, it's simple – the customer reports some damage and you fix it. But underneath the hood, it's … still simple. Here's how the new functionality works from the perspective of your customers and your operators. 

For your customers

In the user app, anyone can report an issue by clicking the “Report” button found on the vehicle card. For the Sharing module, it's located in the “More” menu, whereas for the rental module, the “Report” button is visible directly on the vehicle card. 

After pressing the button, your customers will be able to indicate the faulty part, include a more detailed description in the comment field, as well as add up to three images of the issue in question. 

The tags that the user sees can be customized in the Dashboard

Your customer can complete the damage report process quickly and painlessly and it wraps up with a friendly thank you message that lets them know that your team is ready to resolve the issue. The system will highlight previously approved damages for user convenience.

For your operators

Once a user submits a report, it will appear in your Dashboard. You can find “Damage reports” under “More” in your left menu. 

Here the operator can verify, approve, and/or modify the reports. Once a report is checked, the operator can approve the report and then it gets passed onto the maintenance crew and their Service app. The admin can also add damages manually via the dashboard, for example if they notice any additional issues in the user pictures. 

In the Service app, the approved reports appear as a task. When your team is done with repairs or maintenance, they can mark damages as fixed by clicking "Mark as done". 

A highly useful feature is the ability to track damage reports and fixes, as well as who fixed them and how quickly – all of this data can be easily exported. This allows you to gain a broader understanding of the health of your fleet and its individual vehicles and make data-based decisions, e.g. about which vehicles to choose/avoid when growing your fleet. 

ATOM Mobility – future-proof your mobility business

ATOM Mobility is a mobility superapp that equips mobility businesses with a robust solution for all their tech needs – from a modern user app to a functional platform for fleet management and more. This allows you to launch and scale your mobility business incredibly quickly, no matter the vehicle type. 

More than that, a chief reason why many mobility entrepreneurs choose ATOM Mobility for the long term is that they benefit from the on-going improvements to the app – like the feature discussed in this article. Alongside our own continuous developments of the app, our team frequently receives requests for various custom additional features, and when we see broader applicability, we also make it available to our other clients. 

But don't take our word for it – hear it from our clients in our latest case study.

Launch your mobility platform in 20 days!

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