A Beginner's Guide to Starting a Scootershare Company
It’s more enticing than ever to start a scooter company. As a scooter operator, you give your community new, fun options to commute as well as the monetary incentive.
One of the toughest barriers is getting government permission. Cities saw the haphazard rollout of Bird and Lime and remember how Uber and Lyft resisted regulation. In response, cities are regulating scooters and allocating permits so that only a few companies can operate in each city. City regulations also vary, meaning there is no universal set of rules to abide by.
While scooter companies do require a permit to operate, there is an advantage to local companies. Cities want to work with companies that understand the social, political, and geographic landscape of their respective areas. It’s worth noting that the alternative to getting city permission would be launching on a private property such as hotels or other tourist attractions.
Obtaining a Government Permit
Bird and Lime may seem like big, scary, competent companies, but they're consistently losing permits to smaller, local companies. Due to the high publicity of scooters, many cities are beginning to put laws and permitting processes in place for rentable scooters. These often come in the form of permit programs where different operators have a period to apply to be able to operate.
For example, San Francisco awarded permits to two local companies, Skip and Scoot, over Bird, Lime, Uber, and Lyft. Portland awarded Shared Scooters a permit over Bird. Chicago awarded 10 permits, many going to smaller system operators. You may not be the CEO of a large company, but it's very likely that you understand where you live and work better than say, Bird’s CEO, ever will. You have the ability to meet with the city council, place scooters where they will get used, partner with local business, and recruit a strong local team.
As a smaller company, you can beat the big corporations simply by maintaining local relationships. Starting out, choose to deploy in an area where you plan on living and working, if applicable.
Check with your city council or department of transit to see what the rules are for scooter rental companies. Apply for a permit or work with them to develop operating guidelines. As an example of what the permit process looks like, you can look at Santa Monica’s permit application or San Francisco’s application.
A contrast between San Francisco and Santa Monica.
Choosing a Scooter
With all of the available options, how do you choose the right one? Here are a few things to take into account:
Take into consideration the topography and road quality of your desired market area. Are there hills? Are the roads smooth or full of potholes? Do the streets have bike lanes?
If you're the first entrant into a market, stick to the basics. As a pioneer, you’re educating the market on how dockless scooters work. Make sure that your product works and stick with a proven manufacturer like Segway or NIU.
If you are entering a competitive market, stand out with a novel type of vehicle. Wheels launched their seated scooter in San Diego where Bird and Lime had a foothold. People tried the Wheels scooter due to its different form factor and Wheels used their ridership data to raise $37m.
As previously mentioned, the laws around scooter and bike-sharing are incredibly fractured with no universal set of rules to abide by. For example, while most cities forbid sidewalk riding, Singapore allows it and instead keeps the streets off-limits.
Your vehicle impacts how you will be regulated. Scoot and Revel chose an electric moped because they are already street-legal. Just figure out parking and you’re good to go. Choose a vehicle that allows you to work with local regulators.
Your style of scooter depends on your market. Electric bikes, mopeds, and seated scooters thrive in some markets, while traditional escooters work great in others.
Segway, the largest scooter manufacturer, sells to Bird, Lyft, Uber, and more.
Okai stars in Uber's advertisements.
Fiik is a scooter manufacturer.
Here are rough estimates on how much you can expect to spend per vehicle:
Kick-Scooters — $400 – 700
Electric Bikes — $800 – $1.5k
Mopeds — $2-4k
With Movatic’s software, you have the capability to fully customize pricing capability based on your customer audience:
Create memberships with custom monthly or annual pricing to give special perks to users such as better rates, exclusive usage, etc. For example, memberships can provide a way to give discounted rates to locals while maximizing revenue for rentals performed by tourists.
Create multiple pricing options based on your target market/city and allow multiple rentals per account, which works well with tourist customers.
Create coupons and determine their usage duration and value.
For an in-depth look at our software, how scooters are integrated into our system, a general walkthrough of our software setup, and feature capabilities, check out our documentation.
You need general liability insurance to get government approval. General liability insurance covers you if someone gets injured using one of your scooters or if a scooter rider injures someone else.
City permits often require $2M in general liability coverage with a max of $1M for each incident. Your insurance will list the city as another insured partner so that the city is not liable for a problem with your service.
Insurance is notoriously difficult to buy, as the vocabulary can be confusing and some insurance brokers may attempt to scare you into buying more expensive insurance.
We’ve partnered with the good people at Christensen Group Insurance to help scooter companies easily purchase affordable insurance. Check out our interview with Brandon Schuh from Christensen Group detailing the significance of insurance in the micromobility space here.
The efficiency of your day-to-day operations will determine how much money you make on each ride. With a well-run operations team, you’ll ultimately spend less money on each ride and your riders will have a better experience.
Each scooter ride depletes the scooter’s battery. By the end of each day, scooters with low batteries are scattered around the city, so each night you’ll find those scooters, charge the batteries, and deploy them the next morning.
Bird, Lime, and Wheels all use gig workers to charge their scooters. Gig workers register with a company, go through a quick onboarding, then get paid per scooter they charge.
Chargers log into an app to see a map of low battery scooters that need to be picked up, charged, and re-deployed.
The gig model allows these companies to grow quickly. With the gig model, opening a new city doesn’t require a full operations team. In addition, you don’t need a warehouse to hold your scooters.
When Bird moves into a new city, they simply drop scooters on the street. Then each night, their army of gig workers finds scooters, take them home to charge, then the following morning, they return them to the street, fully charged for riders.
While flexible, the gig model has the propensity to be complex. It requires managing incentives, fraud, and disputes between chargers.
Smaller scooter operators often opt for hourly workers to charge their scooters. This old-school approach involves renting a warehouse and finding an operations team that can work daily to pick up and charge scooters.
Estimates on Charging Cost per Scooter in the US
Gig Model — $4-6
Hourly Model — $5-7
Your scooters carry multiple riders on a daily basis and park up and down public streets and sidewalks. As with any vehicle, maintenance is required.
The first crop of scooters — the Segway m365 that Bird and Lime launched with — were not built for fleet usage and correspondingly broke within months if not weeks.
The scooters available today are built to last years. But still, issues arise. QR codes get obscured, fenders break, wheels puncture, batteries degrade. You need a team of mechanics to fix these issues.
You’ll need to manage and coordinate a team to pick up scooters, repair them, and track issues over time to ensure stability.
You’ll need a way to communicate with your customers anytime they have questions or issues. The Movatic admin dashboard has made this process seamless, being notified of any customer inquiries and being able to respond right away from the admin console. To see this example an action, check out the customer support section of our documentation here.
As the micromobility ecosystem evolves and adapts, make sure you research the success of competitors and similar businesses. Is there a demand for more business? Is your area growing in population? It would be advantageous for you to understand what's working in the market now, and what best keeps your customers coming back for more.