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Home»Business»Electric Scooter Business: Launch Perspectives and How Fast It Will Pay Off
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Electric Scooter Business: Launch Perspectives and How Fast It Will Pay Off

mindminglesBy mindminglesJuly 26, 2022Updated:July 28, 2022No Comments5 Mins Read
Electric Scooter Business: Launch Perspectives and How Fast It Will Pay Off
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Electric scooters are one of the most popular means of transportation, especially in large cities. Their main advantages are maneuverability and low weight. Most people do not buy scooters but rent them because they are only used occasionally. This can make a highly profitable electric scooter business with a relatively modest investment. In this article, we’ll look at the main features of the electric scooter market and figure out how profitable the electric scooter business is in 2022.

Table of Contents

  • Prospects for electric scooter businesses
  • Peculiarities of starting an electric scooter business
  • Profitability of electric scooter business

Prospects for electric scooter businesses

The market for electric scooter businesses is currently experiencing, without exaggeration, its heyday. Experts predict that the global bike and scooter rental market will grow from $2.5 billion in 2019 to $10.1 billion by 2027 at a growth rate of 18.9%. This is driven by the growing demand for micro-mobility and emissions-free vehicles. Many countries are struggling with traffic congestion and imposing strict emission standards to encourage fuel-efficient and environmentally friendly modes of transportation. 

 

 

Electric scooter businesses are expected to grow especially rapidly in the Asia-Pacific region. This is mainly due to the rapidly developing countries like China and India. The reason for market growth in China and India is the growing concern about pollution and increasing traffic congestion due to the increasing number of vehicles. In addition, China is home to many manufacturers of mass-produced low-cost models that are particularly popular with electric scooter businesses.

Peculiarities of starting an electric scooter business

The electric scooter business is often combined with bike rentals, as well as Segways and other means of transportation. This is a relatively new niche that is just beginning to develop, mostly in large cities.

The advantages of the electric scooter business:

  • This is a growing market (growth prospects are estimated at about 15-20% per year);

  • High margin – up to 250-300%, which allows you to quickly recoup investments;

  • The popularity of this type of transport among young people;

  • Availability of infrastructure (bike lanes, etc.) in many cities.

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The amount of equipment depends on your plans and the scale of the business. The minimum number – is 10-50 scooters. Buy them from wholesalers, as for small wholesale you can get a discount, and if you can, then order directly from the manufacturer. This option will be cheaper. You will also need a payment terminal and validators, a set of equipment for the office, as well as household equipment.

Profitability of electric scooter business

Opening electric scooter business you have two ways. The first to start all by yourself from scratch. The second is to use the franchise. In the first case, you can run an electric scooter business for about 3-5 months. The initial investment will also be higher, as you will have to take on all the hassle of purchasing vehicles, as well as developing an application from scratch. The second option would only take 2 months and would cost significantly less in the beginning. For example, RexSoft provides an electric scooter business franchise with access to an app with customization options and also helps with purchasing electric scooters directly from the supplier. 

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Keep in mind that your electric scooter business will not be profitable in the initial period, as you first need to go through all the nuances with registration, purchasing, etc. In terms of the combined initial costs, opening an electric scooter business can be $70,000 to $110,000. In turn, the annual cost of running an electric scooter business could be $550,000-700,000, including taxes, employee costs, and other expenses.

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Now let’s talk about the revenues of an electric scooter business. Typically, the cost of renting a scooter consists of an unlock fee of $1 USD and a rate per minute of $0.15 to $0.30 USD. Weather conditions in the U.S. allow for an electric scooter sharing business from March through November (270 days). About 15% of the days in the season will be days with bad weather. So it turns out about 230 days. From the experience of our clients, we know that 1 scooter can bring in from $70 per day. 50 scooters can bring in a season of 100 000 dollars a month, or 1 200 000 dollars per season.

Thus, the income from renting 50 scooters allows to return the initial investment to start a business (70 000-110 000 dollars) and cover the basic operating costs of running it (550 000-700 000 dollars) for the season.

***

Electric scooters are a popular means of getting around town among young people. But not everyone is willing to buy expensive equipment: since it is used periodically, many prefer to rent a scooter. This is a fairly simple business, which can be very profitable – especially in large cities and provided that most of the year the weather conditions allow riding on the streets. But it is important to consider all the risks (competition, possible damage, theft, etc), as well as think about pricing and carefully choose the location of the point of rental. And if you don’t want to start completely from scratch, it is worth enlisting the support of a reliable technology partner that will provide you with an electric scooter franchise and help with purchasing. Contact RexSoft now and your electric scooter business will be profitable in no time!

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