E-scooter app development: How this new business model of e-scooter rental business can take tourism and micro-mobility industries to the next level?
Considering the fact that an e-scooter rental company is making $1 of profit per ride, per e-scooter and every e-scooter completes 5 rides in a day, that company can make a total of $5000 profit a day if they deploy 1000 e-scooters. This is why we all call the e-scooter rental business a most commercially successful mobility business of this decade!
However, in recent times, harsh government rules, cut-throat competition, and fatal e-scooter accidents have affected the e-scooter usage rate and e-scooter rental business profitability very badly. But some e-scooter rental companies have already sensed the unsettled future of the micro-mobility business and thus, they’ve come up with a unique and money-making business model. They bring e-scooters in the tourism industry to save dying e-scooter culture in many profitable markets and derive many other benefits from the ever-growing tourism industry.
In this blog, we will discuss the Australia-based e-scooter rental company called RIDE which has introduced a new business model for e-scooter rental business and successfully put forth a workable idea of rubbing out the line between e-scooter industry and tourism industry. But before revealing that new business model and talking about the RIDE, let’s first learn about the traditional business models of the e-scooter rental business.
Most popular and conventional business models of the e-scooter rental business
Looking at the success of some early players, many new startups are jumping into the niche by hiring e-scooter app development companies to develop an e-scooter app. Since e-scooter app development is no longer the novelty, both app owners and e-scooter app development companies employ latest technologies and manage to accommodate some groundbreaking features into their apps which sometimes surpass the feature-set of the some most popular e-scooter apps. But when it comes to the business model of the e-scooter rental business, they generally follow the conventional e-scooter rental business models and end-up reaching break-even point too late. (To break-even early, you should introduce a new business model which you will get to know really soon in this blog! Just hold on!)
Following are the top two business models which are very common in the micro-mobility market.
Letting users hire e-scooters and charge them per minute
Including some big players like Bird, Lime and Jump, almost all e-scooter startups are running their business on this business model which is really profitable if business terrain is not overly intensified. In this business model, basically, e-scooter startups allow users to hire the e-scooter by paying $1 to unlock the e-scooter and 25-35 cents per minute of the ride.
This business model has a very significant disadvantage which is low customer retention rate due to high price. Since a user is charged per minute, a 2 kilometers ride which takes easily 10-15 minutes costs users more than $6. Specifically, in cities where one can use the weekly or monthly pass in public transportation — a more affordable option to travel in an urban area — people do not prefer e-scooters.
Charging a flat fee and letting users own e-scooter for a limited period
Subscription business model in e-scooter rental business works the same as the subscription model of other services. In the subscription model, e-scooter rental companies let users buy the month-long subscription of the e-scooter which is later delivered to the buyer to own and use it until subscription period ends. This business model is doing wonders for many micro-mobility startups. But they have limited customers who can afford a very high security-deposit and have the financial freedom to pay damage charges if they damage the e-scooter during the use. Because of this only disadvantage, only a few micro-mobility startups have adopted this business model.
If we talk broadly, out of two possible business models of the e-scooter rental business, there is only one purposeful business model which a small-medium scale startup can opt for. Meaning, small-medium scale startups have to work on ‘business model innovation’ to not rely on only one revenue stream. An Australia-based e-scooter sharing company named RIDE has become the first ride-sharing company to innovate the e-scooter rental business model after marrying micro-mobility industry with the most lucrative Australian tourism industry.
So, now let’s discuss the newest business model of the micro-mobility industry.
Guided city tour on e-scooters – a financially rewarding business model of an e-scooter rental business
Needless to say that low-cost and emission-free e-scooters are the best mode of urban transportation. Though students, daily commuters and tourists are the major users of the e-scooters, e-scooter rental companies only target students and daily commuters in their marketing campaign as it is difficult to target overseas people who will someday be tourists of the city where that e-scooter rental company is running its business. Lack of awareness about e-scooters and safety standards among tourists is another reason why an e-scooter rental company can’t let any tourist enjoy the e-scooter ride all alone. However, RIDE has found a way to decode these challenges. After all, Keeping the most profitable user group (tourists) out of sales-life cycle is not the entrepreneurial mindset!
RIDE offers a way to explore a city on e-scooters in a very secure, fun, easy and affordable way. Through its e-scooter app and website, it welcomes users to book a guided tour of the Adelaide city ( where RIDE is currently operating its business) on e-scooters. Since the group of tourists is always accompanied by the guide who also looks after the safety of riders, tourists can explore the city in the best possible way. The guided tour package of RIDE starts from $45 AUD.
So, now when you know about the business model which we have been mentioning from the first line of this blog, let’s find out whether this business model is workable or not.
Guided city tour on e-scooters – is it a workable idea?
When a tourist lands in a new city, he wants to explore the city while having fun and not causing trouble to his budget.
If he chooses public transportation to roam around the city, he can surely save a few bucks, but he can’t have fun as travelling in crowded metro trains and buses is not something a tourist is looking for when he is on vacation!
And if he rents a car to have fun while exploring the city, his idea hits his pocket very badly. So, what is the alternative? The answer is an e-scooter.
An e-scooter does justice with both requirements of the tourists in the best possible way. Hence, we can firmly say that guided tour of cities on e-scooters is a sustainable idea. However, there are some factors which affect this business model.
Factors affecting – Guided city tour on e-scooters
We just have discussed and come to the conclusion that the integration of e-scooter and tourism industry give fruitful results to both users and businesses of these two industries. But to be able to claim those rewards, you should take two factors into account.
- If you wish to add this business model in your e-scooter rental business, you should first study the weather of your business area. If the weather remains unpleasant throughout the year, tourists will not ride e-scooters to explore the city due to many obvious reasons.
- If you wish to add this business model in your e-scooter rental business, you will need an e-scooter app with an extra feature which lets users book the guided city tour on e-scooters and lets guide to validate the booked ticket of every user.
Herein, Know how much does it cost to develop an e-scooter app with custom features.
Cost of e-scooter app development with custom as well as common features
Coruscate is the top e-scooter app development company which has developed 5+ e-scooter rental apps and entertained numerous e-scooter app development queries. We have an army of 100+ developers, designers and IoT engineers who can develop a robust e-scooter rental app for you.
At Coruscate, e-scooter app development starts from $10k and you will get all common app features in your e-scooter app. In case, you wish to add custom features into your app, you’ll be charged based on the complexity of those custom features and expected development hours.
In addition to e-scooter app development, we offer many other services. We study the market on behalf of you, we help you get government permits, and we give you the free server to host IT infrastructure of your app.
To ask for the free e-scooter app demo and free consultation, feel free to contact us.