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What type of transport to choose to start sharing

If you already thought about starting your sharing business, the real headache for you was probably choosing the most promising transport. There is no single solution, in this case, because too much depends on specific factors in your area that directly impact the business’s success. In this article, we will analyze and compare the major disadvantages and advantages of each type of transport in terms of pros and cons.

A few words about carsharing

Carsharing is currently the leader in the transport-sharing industry, actually turning into a new type of public transport. That is why the authorities are actively encouraging the development of such businesses in their cities by granting preferential terms for parking fees to carsharing companies, hoping to unload traffic on the roads and improve the environmental situation, because 1 carshare can replace up to 10 private cars a day. If we look at the research, the expert on urban planning Donald Shoup has calculated that 95% of the time a personal car is idle in the parking lot or at the service station, and only 5% of the time it is used for travel. The classic carshare user is a resident of the center and other densely populated areas of the city. For them, carsharing is a great way to get to work or run errands without paying for parking.

About the pros

  • Active government support, which other modes do not.
  • Steady growth in demand, because conventional car rental, taxi, and even the purchase of your own car is increasingly a thing of the past as an economically unprofitable model.
  • High business profitability in the range of 15 to 30%, which is slightly worse than the performance of other sharings, but still strong against the background of other venture industries, where an excellent result is considered 20%.
  • Ability to expand the fleet by renting a private car on a revenue-sharing basis.
  • High virality in the promotion of the service.
  • Lack of seasonality factor, typical of other modes of transportation.

About the cons

  • The major disadvantage of carsharing – is the need to invest significant capital of 500 thousand dollars to start.
  • The difficulty of expanding business outside the megalopolis. Because the demand for carsharing services arises when and where people find it difficult, inconvenient, and expensive to use personal transportation.
  • High cost of vehicle operation including fuel, insurance, repairs, maintenance, parking fees, and taxes.
  • Frequent damage to the car, including theft, turns the vehicle into an illiquid commodity and requires you to spend time on damage compensation. However, this problem is inherent in all types of carsharing, but in this case, we are talking about larger sums of money.
  • Driver neglect, resulting in calls to move cars, evacuations, and missing items like phone stalls or blower brushes.

A few words about kicksharing

According to forecasts, in the coming years, a real boom in scooter transport demand is expected, which is associated with a change in users’ attitudes towards these services. Initially, kickshare services were seen as a good option for the entertainment of citizens, but the industry quickly changed the way of development, and scooters turned into a significant alternative of movement in the city, where the problems of traffic jams, lack of parking spaces, etc. are relevant. The most active consumers of kickshare services are citizens aged 18-34. And more than 70% are men. Food delivery service couriers and other representatives of the B2B segment are increasingly choosing scooters as a “working tool”.

About the pros:

  • A low entry threshold of $80,000.
  • No fee for the use of city infrastructure, and no need to coordinate the placement of scooters with the city authorities
  • Very high profitability in the range from 30 to 50%
  • Fast scalability in cities with populations from 200 thousand people
  • Eco-friendliness of transport
  • Opportunity to sell in the B2B segment: large recreation centers, delivery services, etc.

About the cons:

  • Seasonal nature of business
  • Dependence on the adaptability of urban infrastructure to micro-mobility
  • High probability of injuries among customers
  • The need for constant recharging or changing of the scooter’s batteries
  • Acts of vandalism to vehicles
  • Costs of placing and relocating scooters from areas of low demand
  • Possible resistance from city officials amidst an oversaturated market and creating discomfort for pedestrians and drivers
  • High cost of vehicle insurance

A few words about bikesharing

The wave of popularity of bike-sharing started in 2014 when bike-sharing became a sensation in China and received billions of dollars in investment. Since then, the industry has spread around the world, but business has not taken root everywhere. The main reasons for the failures vary from region to region: in China, the market was oversaturated, leading to a veritable dumping ground for derelict bikes, while in Europe the business suffered from vandalism and theft. Despite the problems, the industry continues to show a steady growth trend, and the leading companies have done a good job of correcting their errors, reaching steady profits.

In general, the benefits and risks of bike-sharing in many ways duplicate kicksharing, but we will highlight some unique features of this activity:

Pros:

  • Less risk of injury to customers
  • physical activity for sports enthusiasts
  • a more familiar mode of transport for citizens

Cons:

  • bike-sharing is less popular now than during the scooter boom
  • the market is oversaturated in many areas
  • bicycles are vandalized more often
  • not well suited to office employees as a form of transportation.

Conclusion

If you would like to start any of these businesses, you can always contact us and we will help you implement the most ambitious ideas in your region.

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