How to Start an Electric Scooter Rental Business in 2023
Table of Contents
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.
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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!
Electric scooter business opportunities
The electric scooter business is gaining more and more popularity every year. And it is not surprising. In addition to the fact that electric scooters are an alternative to conventional transport to move around the city, avoiding traffic jams, and taking care of the environment, this business has a number of advantages for investors and entrepreneurs.
An electric scooter business with a fleet of 50 or more scooters can cover the start-up investment and current annual expenses in a year. Later in this article, we will talk about it in more detail.
Quick start of business
The electric scooter franchise from RexSoft allows you to start an electric scooter business in 1-2 months. You get the necessary software for this business, training, and consulting from RexSoft specialists.
This type of business provides an opportunity to quickly develop and cover new areas and cities. Start an electric scooter business for sale and transfer the rights to your business under franchise conditions, as the Lime, and Bird brands do.
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.
Request to local self-government bodies
The first step is to contact your local authorities to find out if a scooter rental business is allowed in your city. Each city independently forms the procedure for obtaining the necessary permits, and a list of rules and restrictions for scooter rental companies (travel zones, places for parking scooters, age restrictions, speed limits, etc.).
If the scooter rental business is allowed in your city - let's move on to the second stage, if it is prohibited - do not be upset, you can choose another city to start a business with because each city independently forms the rules for scooter rental companies.
In the second stage, you need to register as a legal entity (get a business license) and open a bank account. Business registrations vary from country to country, so on average, it can take 1-3 months to register a scooter rental business. In some countries, it is possible to register a business using a simplified procedure, which may take 1-2 weeks.
Vehicles & Software
And the third stage - is scooters, spare parts, and software. The most popular mistake of entrepreneurs at this stage is the sequence of steps. First, entrepreneurs buy scooters and only then move on to finding and configuring the necessary software. Due to this, the term of starting a business increases many times. The image on the screen shows very well the order of tasks that should be performed in parallel at this stage. Another popular mistake that delays the launch of your business and increases costs is giving preference to custom development of the necessary software instead of ready-made solutions. Custom development of client applications and CRM for managers can take from 6 to 9 months. Instead, customization of ready-made solutions from RexSoft takes 2 months. The cost of custom development - $80,000-120,000, customization of ready-made solutions - $5,000-$8,000 + monthly payment from $5 per scooter.
Let's return to the scheme of tasks of the third stage. At this stage, you complete obtaining permits for running an electric scooter sharing business in your city, if you have not already done so in the previous stages.
In parallel with this, we provide you with options for electric scooters and contacts of manufacturers from China, Europe, the USA, and Australia, which will help you form orders and pick up the necessary spare parts. You can order scooters from other brands we do not cooperate with, our software solutions are adapted to any scooters.
At the same time, we start customizing the necessary software for your needs. We are preparing a unique application design for clients. We configure language versions of software, connect payment systems, set rates, and customize functionality. After selecting the scooters, without waiting for their physical availability, the scooter manufacturer gives us the technical specification for writing drivers for the scooters. Drivers are necessary to connect scooters to the software.
I emphasize once again that the physical presence of scooters is not required to configure the software. For this, you do not need to wait 2-3 months for the manufacture, branding, and delivery of scooters.
After customization, the client application is published on the app store and the play market, and the CRM for managers is deployed on the Amazon server. And the last task at this stage is software and scooter testing.
This algorithm allows you to start your own electric scooter-sharing business within 3 months.
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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.
e-scooter app development consultation
To get free tech consultation on the e-scooter app. The RexSoft company has been in the electric scooter business for 5 years since 2017. Our specialists are ready to share their solutions which will make your business successful.
Necessary Electric Scooter App Functionality
The required minimum for an app for an electric scooter business is as follows:
- 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:
Main E-scooter App Features
- map showing scooters
- possibility to view information about the status of the scooter and its rates on the map
- scooter rent for the trip
- personal account
- travel history
- balance (refill, cost history)
- promo codes
- referral program
- messages (incoming notifications and mailing)
- settings (password, beginner mode with limited speed)
- about us (info page and feedback form)
- user management (editing, blocking for a period of time with a message to the user)
- managers (setting up staff rights)
- scooters (add devices, edit, view travel history and rent a device)
- trips (travel history)
- territories (creation of territories for separate cities, districts of cities, creation of movement zones in these territories)
- batteries (scooter battery management)
- battery replacement (accounting for battery replacement work by the staff)
- promo codes (creation)
- messages (mailing list creation)
- editing the text content of the application
- franchise (feedback)
- command history (login)
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.
The cost of developing an app for the electric scooter business
So how much does it cost to develop a solution for the e-scooter business? Well, it directly depends on what you need and the service provider. For example, RexSoft offers 3 types of e-scooter sharing app development solutions:
You have an opportunity to launch a scooter share business within 2 months due to the franchise by RexSoft. You don't need to develop an e-scooter rental app - use our ready-made solution which is easily customized to your needs and pay for the franchise from $5 for a scooter per month. E-Scooter Franchise Cost includes basic payment for setting up the application and monthly payment for app use.
- Development of a unique design of the app.
- Customizing the app's appearance.
- Customizing the app functionality.
- Integration of payment systems in the app.
- Setting up the scooters to work with the app.
- Publishing the app in the app stores.
150-200 hours + supportCost
From $5 for a scooter per month
Turnkey e-scooter app creation from scratch. We use Flutter and Node.js technologies for development. The choice of this particular tech stack allows not only to develop cross-platform software solutions (Android, iOS) but also to ensure the stability of the work, no matter how high the load on the server is. The creation of this solution includes the following work:
- Creating prototypes, and unique design.
- Development of a custom app.
- Development of custom app functionality (for users/administrators).
- Integration of payment systems in the app.
- Configuring the scooters for the app.
- Publishing the app in the app stores (Android, iOS).
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.
Which scooters are suitable for electric scooter business?
We cooperate with manufacturers of electric scooters from around the world (China, USA, France). If you haven't purchased electric scooters yet, we can help you.
- Rated power (with Hall): 500w
- Peak power: 800w
- Battery: 36V 10.4Ah
- Tires: 10-inch solid tires
- Top speed: 25KM
- The farthest battery life: 35-40KM
- Maximum climbing degree: 20°
- Maximum load: 120kg
- Battery: domestic detachable
- Charging time: 4-6 hours
- Net weight: 23kg (including battery)
- Gross weight: 27kg
- Waterproof rating: IP55 (whole body), IP68 (battery control pack)
- Body material: aviation aluminum alloy
- Rear drive: Motor 36V, 450W
- Battery: 36V, 12.5Ah (range 30-40km)
- Max Speed: 25km/h
- Tires: 10-inch solid tires
- Front Wheel: no brake
- Rear Wheel: E-brake + Drum brake
ACTON M PRO 3.0
- Range: >55KM (>34 Miles)
- Top Speed: >30KPH (18.5MPH)
- Incline Rate: >20%
- IP Rating Connectors: IP 67;
- Electronics: IP64-66
- Vehicles: IP65
- IOT: Integrated with 4G-LTE, GPS, BLE, W/backup battery
- Battery: Pack 17.5 AH LITHIUM-ION premium batterie
TurboAnt X7 Max
- Motor Power: 350 W
- Maximum Range: 32 miles (52 km) in Comfort Mode
- Maximum Speed: 20 mph (32 km/h)
- Maximum Climb Angle: 15°
- Battery: 10 Ah (360 Wh), DC 36 V (Detachable)
- Charging Time: 6 hours
KIREST Kuick E-FOX Connected
- Motorpower: Powerful 500W Brushlessmotor
- Battery Type: 48V 15 Ah lithium battery
- Maximum speed: 35 km/h
- Wheel size: 10 inches-inflatabletire
- Range: 30-35 km
- Charging Time: 3h
- Weight: 22.00 kgs
- Max load: 125 kg
- Rated power/max power: 350w/700w
- Max gradient: 20%
- Max speed: 30km/h
- Range: >55km
- Weight: 29kg
- Battery capacity: 48v16ah
- Swappable battery: yes
- Tires: front 12" / rear 9"
Segway Max Pro SNSC2.2
- Max. Power: 690W
- Max. Speed: 25km/h
- Typical Range: 60km
- Max. Slope: 8°
- Net Weight: around 23.5kg
- Duration of Charging: around 4 hours,5A
- Payload: ≤100kg
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.
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).
- 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.
- 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.
How much do scooters for a scooter sharing business cost and where do you get them?
The Chinese market for electric scooters is the largest in the world and provides a large selection of electric scooters and scooter parts. You can buy them yourself or you can rely on us.
RexSoft cooperates with many electric scooter manufacturers and has representatives in China who will help you in choosing scooters and arrange delivery to any country in the world.
Get advice on choosing scooters
Order electric scooters and app for their management now. RexSoft is your reliable partner for creating successful businesses.
Example of scooters, perfect for a scooter sharing business
Let's take a concrete example of an electric scooter model that's great for starting your own fleet of vehicles. Our clients nicknamed the model of the Shenzhen X890 scooter "armored car" for its technical characteristics and reliability in operation.
|Rated power (with Hall)||500w|
|Tires||10 inch solid tires|
|The farthest battery life||35-40KM|
|Types are heavily dependent on||rider's weight, road conditions, and usage habits|
|Maximum climbing degree||20°|
|Charging time||4-6 hours|
|Net weight||23kg (including battery)|
|Waterproof||IP55 (all body), IP68 (battery control pack)|
|Body material||aviation aluminum alloy|
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.
Let's talk about personnel for the e-scooter business. Keep in mind that some roles in this list can be combined. We provide an estimate of the number of staff needed to maintain 50 scooters smoothly.
2 Chargers with cars (cargo van):
- replace dead batteries
- transport scooters
1 charger at the office:
- Arranges battery charging
- discovers places where there is a high demand for scooters, plans scooter parking lots.
- Repairs scooters
- Support service
- Responds to queries from users (for example, our app has an "Ask questions" section where the customer can ask the support service anything in real-time).
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.
|Small business registration||Legal consultations. Obtaining a tax registration number. Registration with the social insurance authorities. Obtaining a license/permit. Opening a bank account.||100-1000|
|Purchase of scooters||The cost is calculated based on the example of buying 50 Shenzhen X890 scooters, which have proven themselves well in the scooter sharing business.||32500-40000|
|Spare parts for scooters||Replacement batteries. For 50 scooters, 120 batteries are required. Headlights, stops, wheels, humpers, brake systems, other parts with high wear and tear.||12000-14000|
|Electric scooter sharing software||The cost is calculated for the customization and setting up of the necessary electric scooter sharing software (client app, and CRM for managers) according to the terms of the franchise from RexSoft. More information about the cost of the franchise here||5000-7000|
|Purchase of cars for chargers||A cargo van is required for a scooter sharing business. For example, we found out the cost of the used (from 2017) and new van - Transit Van. All information is taken from the site||22000-50000|
So, the costs of starting an electric scooter sharing business can be $70,000-110,000.
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.
|Warehouse rental||A room of 30-40 square meters is required for storage, maintenance of scooters (spare parts) and battery charging. The cost of renting premises in the USA is taken from the site||15000-25000|
|Car expenses||Expenses for gasoline, spare parts, technical service||15000-20000|
|Software fee||Monthly franchise payment for the use of the necessary software||3600|
|Insurance||Property and general liability insurance||500-1000|
|Update of spare parts fund||Headlights, stops, wheels, humpers, brake systems, other parts with high wear and tear||12000-14000|
|Accounting, legal services||Providing legal advice, bookkeeping and reporting||7000-12000|
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.
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.
What do you need to start an electric scooter rental business?
To start an electric scooter sharing business needs software designed for customers (app) and for company managers (CRM), scooters fleet and spare parts for them, as well as staff.
What are the main electric scooter business expenses?
50 scooters with the necessary spare parts can cost $ 50,000, electric scooter software development can cost $ 40,000-70,000. The e-scooter sharing franchise from RexSoft allows you to reduce the cost of developing the necessary software by 10-20 times.
How do increase the profitability of the e-scooter Rental Business?
To start a scooter-sharing business it is better to use ready-made software that allows you to launch a business quickly (1-2 months) and reduce development costs by 10-20 times. Modern analytics modules help identify routes that bring revenue to the company and ones that do not. Due to the correct placement of scooters on the map, the income of your business can increase many times over. The E-scooter sharing franchise from RexSoft will help you with this.
Oleksandr KryvotsiukHEAD OF MARKETING AT REXSOFT