👉 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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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.

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Everything you need to know before starting your car-sharing business
Everything you need to know before starting your car-sharing business

What is car-sharing & how does it work? What's the car-sharing business model? How to launch a car-sharing business? Find out here.

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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?

Competition

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. 

2. Investment

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.

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