How to Start an Electric Scooter Rental Business in 2023

One of the most successful types of seasonal business can be considered an e-scooter rental. E-scooter business brings excellent profits and enjoys great popularity. At the same time, it will be very easy for an entrepreneur to work in this field, as it is very simple to start your own electric scooter business, although it will certainly require some investments.

RexSoft company has been in the electric scooter business for 5 years since 2017. And although the main focus of our activity is e-scooter app development, we have already managed to accumulate an exhaustive amount of knowledge in this industry. And now we are happy to share our expertise with you and help you start an electric scooter business. In this article, we will tell you what is required for the electric scooter business, how to deal with the scooter sharing app, where to get scooters & spare parts, and how to manage them properly. Also, you’ll understand how to plan business expenses, income, and profitability of the electric scooter business. Let's do it!

How to start an electric scooter business within 3 months

We divided the process of starting an electric scooter rental business into 3 consecutive stages: request to local authorities, business registration, purchase of scooters and setting up the necessary software (sharing app, CRM for Managers) for the rental business. Let's look at these stages in more detail.

What is required for an electric scooter business?

The most important thing during electric scooter startup is the scooters themselves. To begin with, you need 10-12 of them, and in the early stages of organizing your electric scooter business, you should find a reliable e-scooter sharing app supplier of these vehicles. They can sell electric scooters, and sometimes even rent or buy on credit (it will be repaid fairly quickly). In addition to e-scooters, you will also need scooter rental software to track and manage them.

Another equally important step is the selection of staff, and the electric scooter business requires quite a big team to maintain. You need managers and technical specialists to monitor the condition of scooters and carry out their repair and maintenance. Let's take a closer look at these aspects.

What App is needed for the electric scooter business?

Quality software is the heart of your electric scooter business. It's in your best interest that it beats smoothly and without any delays. It is also in your interest to have all the necessary features in such an application. And it’s even better if you’re able to add new features when you need them or when you are in dire need of competitive advantage in a heated market. Let's break down this aspect of the electric scooter business in more detail.

Necessary Electric Scooter App Functionality

The required minimum for an app for an electric scooter business is as follows:

• GPS
• QR Scanner
• Smart Lock

So, the basic functionality of an electric scooter business app is the ability to track the movement of the vehicle, a QR code scanner to unlock the device via smartphone, and a smart lock to lock it after use. In addition, each application should have a convenient admin panel for users and the administrator of the service. It includes the following functions:

We have already reviewed the necessary functionality required for the application.

Now let's move on to reviewing the development possibilities and how much it costs.

So, the RexSoft company offers 2 options for developing an electric scooter sharing app: customization of ready-made solutions and development "from scratch". The main advantages of customizing ready-made solutions are the price and terms, because in 2 months you get an app with a unique design and the necessary functionality.

The most popular brands in the electric scooter business are Chinese brands. Among them, there are ready-made offers, where after the purchase it is enough to connect a SIM card.

When choosing, it is worth paying attention to the battery capacity. The better the battery, the more distance the vehicle will be able to travel without charging. A low-capacity battery can cause a sudden stop, which will negatively affect the reputation of the company. It is better if the charge will be enough for a distance of 25 km.

Technology

The inner workings of the electric scooter should have Cloud Monitoring support and/or IoT technology. These technologies allow the vehicle to communicate with other devices and monitor its status in live mode.

In addition, the electric scooters must be configured to alarm administrators about a hard fall (breakage) and reports of unauthorized movement (movement outside the allowed route, theft of the scooter).

Physical features of Scooters

• An electric scooter's power should start from 500 watts. A person with a weight of 200 lb/ 90 kg must be able to climb a hill of 15 degrees. This is important for hilly terrain. If you choose scooters with insufficient power, users will not be able to get to the necessary places on them and the reputation of the brand will be lost (users will throw the scooters in the middle of hills).
• Vandal-resistant.
• Waterproof.
• The suspension must be able to withstand a load of 120-150 kg.
• Replaceable battery. The charged scooter has to work for 2-3 hours of active riding. For the scooter to continue working you need to replace the batteries 3-4 times a day.
• Theft protection. Difficult to access the battery and program access to traction charging.

What parts are needed for Scooters

You need to stock up on parts for electric scooters to keep your business running smoothly. The parts fund is a must and you need to consult with the factories, which parts have high wear and tear and buy them before you start the e-scooter business. In particular, you will most likely need:

• Replacement batteries. For 50 scooters, 120 batteries are required.
• Headlights.
• Stops.
• Wheels.
• Humpers.
• Brake systems.
• Other parts with high wear and tear.

The order is calculated by the necessary set of spare parts and consumables for the appropriate number of scooters. If we are talking about a rental business, these quantitative indicators and information is calculated by the factory engineers and the experience of customers. In addition, there is a possibility to order any spare parts additionally, the factory provides maximum cooperation and assistance to all customers. Ordering spare parts is not a problem.

Shenzhen X890

How much does Scooters cost for Scooter Sharing Business

Shenzhen X890 price in China is $450-550. The price depends on the order quantity (the bigger the order, the less the cost). Add to this amount the cost of customs clearance, taxes, shipping costs, other consulting costs, and intermediary costs. These costs will vary from country to country, so the cost can go up to $650-800 for 1 Shenzhen X890 scooter.

What is the profitability of the Scooter Sharing Business?

From an economic point of view, e-scooter rental is a profitable business. From the point of view of absolute income numbers, it’s rather small. Let's try to roughly calculate the profitability of the e-scooter business.

All calculations are made on the example of a scooter sharing business with a fleet of 50 scooters, the location of the business is a US city with a population of 230,000 people. Calculations of expenses and income of the scooter sharing business are approximate and we did not take into account a number of factors (competition, level of vandalism, local fees and charges), which may affect the success of this business.

Business start-up costs

It takes 2 months to start an electric scooter sharing business if you decide to use a franchise from RexSoft. If you have decided to develop scooter rental software "from scratch" - the term of starting a business may increase to 3-5 months. During the start-up period, your business will not generate income, because first you need to register the business, set up the necessary software, purchase scooters, find premises, etc. Next, we've collected the main costs you need to be prepared for at the start-up stage.

So, the costs of starting an electric scooter sharing business can be $70,000-110,000.

Business expensess

After the launch, your business will start to work and generate income for you, and to support the electric scooter sharing business, you need to cover current expenses: rent, car expenses, taxes, employee wages, etc. In the table, we calculated the main annual expenses.

The annual costs of running an electric scooter sharing business can be $550,000-700,000.

Income of the electric scooter sharing business

The cost of renting a scooter consists of an unlocking fee of 1 USD and a rate per minute - 0.15 to 0.30 USD. Weather conditions (temperature must be above 0) in the USA allow electric scooter sharing business from March to November (270 days). We subtracted 15% from the season for days with bad weather (rain) when city residents prefer other means of transport. So we have 230 days. From the experience of our customers, we know that 1 scooter can bring from 70 dollars a day. 50 scooters can bring in a season from $100,000 monthly income, or $1,200,000 per season.

So, the electric scooter sharing business is a highly profitable type of business, because in our case, the income from renting 50 scooters allows to return the initial investment for starting the business ($70,000-110,000) and cover the main current costs of running it ($550,000-700,000) per season.

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E-scooter business is quite easy to create. You just need a few scooters, a quality application, and a good location to get a flow of customers. The key is to have the right people to help you figure it all out and make your business truly competitive. Contact RexSoft now and we will work with you to make your city's residents more mobile and you truly successful.