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 car sharing or scooter sharing software for you.
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How Donkey Republic became a micromobility leader
🚲 Donkey Republic is proving that bike-sharing can be profitable, while many competitors are struggling to stay on the road to success. Donkey Republic is partnering with cities, keeping costs low, and focusing on bikes. With more cities pushing for car-free mobility, can Donkey Republic continue to grow?
February 25, 2025
min. read
Bike-sharing has had a wild ride over the past ten years. Some companies threw thousands of bikes onto city streets without permission, while others spent tons of money but couldn’t figure out how to make a profit. Donkey Republic took a different approach—and it worked.
Started in Copenhagen in 2014, Donkey Republic didn’t rush to expand or rely on big investors. Instead, it focused on working with cities, keeping things simple, and making sure the business could actually make money. In 2023, the company earned €15.4 million (DKK 115.2 million), up 70% from the previous year, and, more importantly, it made a profit of €1.27 million (DKK 9.5 million).
From a simple idea to a growing business
The company’s founder, Erdem Ovacik, got the idea when he saw a friend using combination locks to share bikes with others in Copenhagen. He figured there had to be a better way. The answer? A mobile app and smart locks, so people could rent a bike quickly without needing a docking station.
In 2015, Donkey Republic started with just 30 bikes. Instead of flooding the streets with bikes and hoping for the best, it worked directly with city governments to get approval. That helped avoid the problems that companies like Ofo and Mobike faced when they expanded too fast and then collapsed.
The key of not overdoing
A lot of bike and scooter companies try to grow as fast as possible, spending loads of money and hoping to make a profit later. Donkey Republic didn’t do that. By 2020, it had expanded to 13 countries, including Germany, Spain, the Netherlands, and Finland, but always in a controlled way.
A big part of its success comes from working with cities instead of fighting them. Instead of just dropping bikes on the street and hoping no one complains, Donkey Republic made agreements with local governments. This means the company doesn’t have to worry as much about sudden bans or changing rules.
For example, in 2023, Paris banned rental e-scooters, which was a disaster for other companies. But because Donkey Republic focuses on bikes, it wasn’t affected.
Financial growth and key milestones
Donkey Republic has shown impressive financial progress in recent years. In 2023, the company reported a revenue of DKK 115.2 million – a 70% increase compared to the previous year. Even more importantly, they achieved a positive EBITDA (Earnings before interest, taxes, depreciation, and amortization) of DKK 9.5 million, marking a shift toward profitability.
2024 has been even stronger for Donkey Republic. The company reported a revenue of DKK 145 million, representing a 25% increase from 2023. For the first time, they also recorded a positive EBIT of DKK 1 million. This shows that their long-term strategy of working with cities and optimizing operations is paying off.
What makes Donkey Republic different?
Several factors have contributed to Donkey Republic’s success:
- Emphasize partnerships – Rather than competing with cities, they work alongside them, forging long-term agreements that drive stability and growth. Approximately 30% of their revenue stems from B2G and B2B long-term contracts, including subsidies.
- Technology-driven approach – Their smart locks and app-based rentals make it easy for users to find and use bikes anytime.
- Financial sustainability – While some bike-sharing companies struggle with profitability, Donkey Republic has managed to grow revenue while keeping costs under control.
- Commitment to sustainability – By promoting cycling as an alternative to cars, they contribute to cleaner and less congested cities.
What’s next for Donkey Republic
While Donkey Republic has shown that micromobility can be profitable, the road ahead isn’t without challenges. Competition is fierce, and other companies are rapidly expanding their e-bike fleets to compete in Donkey Republic’s space. Additionally, while city partnerships provide stability, they also limit rapid expansion – municipal contracts take time to secure, and some cities prefer to invest in their own public bike-sharing programs.
Still, Donkey Republic is betting that the demand for sustainable, city-friendly transport will only grow. With urban areas across Europe cracking down on car use – such as London’s Ultra Low Emission Zone (ULEZ) and Paris’s car-restriction policies – bike-sharing is well-positioned to thrive.
So while scooter operators continue to battle regulatory headaches and profit struggles, Donkey Republic is proving that a disciplined, city-first approach might just be the key to lasting success in micromobility.
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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!
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