It feels like there’s a new scooter company every day. Bird, Lime, Skip, Scoot, Voi, Tier, Wind, Leo, Gruv, just to name a few.
This article covers how a scooter company gets started: from picking a short name to buying general liability insurance. With this article, you’ll have all of the information you need to start a scooter company.
We are building the software, hardware, and support tools you need to start and run a scooter company.
In the spring of 2018, I took my first ride on an electric scooter. I quickly saw how they could change cities for the better by providing a fun, cheap, and convenient way of getting around.
I had recently left my previous job and I wanted to work in the industry. With a background in software engineering, I interviewed at Bird and Lime and contracted for Skip. I had job offers on the table, but I didn’t end up joining any of the companies.
All of the scooter companies felt the same. They all said they were building a “custom” scooter and that they wanted to be friends with city governments, but in reality, they were totally focused on raising money to buy scooters.
What would a software engineer do at a scooter company? Governments give out permits, VCs allocate fundraising, supply chain folks negotiate with factories.
Software didn’t matter. And picking a company to join felt like choosing a random four letter word from a hat.
So about a year ago, I started my own company, Scooter Map. Scooter Map helps chargers for Bird, Lime and other companies make more money charging scooters.
Scooter Map made it easier for chargers to find scooters by aggregating across companies and providing powerful planning tools like notifications for nearby scooters and optimal routing. In the short term, chargers made more money and, in the long run, Scooter Map is lowering the industry cost to charge a scooter.
During the scooter hype while companies were setting money on fire, Scooter Map was the first company focused on improving unit economics.
It’s easier than ever to start a scooter company. As a scooter operator, you help your community get around while making money.
The toughest barrier is getting government permission. Cities saw the haphazard roll out 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.
So scooter companies require a permit to operate. And here is where local companies have an advantage. Cities want to work with companies that understand the social, political and geographic landscape.
San Francisco awarded permits to two local companies, Skip and Scoot, over the bigger Bird, Lime, Uber and Lyft. Portland awarded Shared Scooters a permit over Bird. Chicago awarded 10 permits, many going to smaller operators.
This guide will take you through the full process of starting and running a scooter company, giving you the confidence to apply for a permit in your city.
Scooter Map helps riders and chargers find scooters. Now we take the next step by providing the hardware, software, and information for you to start a local scooter company. Interested? Get in touch.
Table of Contents
- Picking a Scooter
- Tracking Scooters with GPS
- Renting Scooters in Your App
- Charging and Repairing Scooters
- Winning a Government Permit
- Buying Liability Insurance
- Coming Soon
- Keeping Up
Picking a Scooter
First things first: scooters.
Most scooter companies claim to have a custom scooter. Often, this just means slapping a sticker on a scooter from a Chinese manufacturer.
Segway, the largest scooter manufacturer sells to Bird, Lyft, Uber and others. The Segway m365 that kicked off the scooter revolution was originally intended for consumers. Segway designed a new scooter for fleet usage, the Segway MAX, which is now rolling off their production lines.
While Segway leads the pack, many other manufacturers sell new, fleet-grade scooters. InMotion’s scooter features a swappable battery in the stem. Okai’s durable scooters star in Uber’s advertisements. Electisan’s scooter debuted as Bird’s first “custom” scooter. SuperPedestrian’s scooter sensors detect issues before riders have issues. And there are many more…
The style of scooter in vogue — I call them kick-scooters to differentiate them from mopeds and sit down scooters — has proven incredibly popular because anyone can ride them. But the kick-scooter isn’t right for every market.
Electric bikes, mopeds, and sit down scooters thrive in the right market. Juiced Bikes helped Bird launch their new bike, the Cruiser. Razor launched a sit down scooter. Wheels uses seated scooters from i-Walk. Niu and Genze electric mopeds dot the streets of New York and San Francisco.
How to Choose the Right Vehicle
With all of these options, how do you choose the right vehicle?
Take into consideration topography and road quality. Are there hills? Are the roads smooth or full of potholes? How many streets have bike lanes?
The hilly streets of San Francisco make Jump’s electric bike popular. Santa Monica’s relaxed roads and winding boardwalk paved the way for the kick-scooter revolution. India’s patchy infrastructure requires a moped.
If you are the first entrant into a market, it’s basics, basics, basics. 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.
The laws around scooter and bike sharing are remarkably fractured.
For example, while most cities forbid sidewalk riding, Singapore allows it and keeps the streets off limits.
Choose a vehicle that allows you to work with local regulators.
How Much To Spend
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
Tracking Scooters with GPS
You now have scooters (or bikes or mopeds)! Now you need a GPS module to track the scooters’ locations.
GPS modules not only track the scooter but allow the rider to start and end their ride, warn when a scooter is being moved, enable special geofence zones, and more. GPS modules are also referred to as IoT modules (Internet-of-Things) because they may contain a WiFi chip, Bluetooth capability, cell service, and even a camera in addition to the GPS unit.
GPS Integrated into Scooter by Manufacturer
If you buy a scooter from a fleet provider like Segway, SuperPedestrian or NIU, the scooter will often include a built in GPS module.
The manufacturer’s GPS modules vary in quality but we have found it generally a good idea to stick with the module that a manufacturer provides unless you know what you are doing.
Custom GPS Modules
If you use a smaller manufacturer or want to develop a custom GPS module, you have a few options. You can buy from a Chinese manufacturer or develop your own GPS module using custom components.
If you want special functionality on your scooter, you may need to design and build your own GPS module. Companies like Particle and Comodule help manufacturers and operators design and build GPS modules.
I’m still learning more about GPS / IoT units and we will come out with an overview of the IoT landscape.
Renting Scooters in Your App
You now have scooters and you know where they are! Awesome. But before you can start making money, you need an app that riders can download, find scooters, and pay to rent them.
Here’s what the rider app will do:
- Show scooters nearby on a map
- Scan scooter QR codes to begin a ride
- Take a photo when the ride is over
- Collect credit card information and charge the user after the ride
- Show history of rides
- Allow users to mark problems with scooters
- Give discounts on rides or to users
But none of these companies do a good job with the more important piece of software that you’ll need — an app for managing your fleet. Bringing us to our next section…
Charging and Repairing Scooters
Day-to-day operations determine if your company makes you money and brings you joy or if it becomes a drain on your life and bank account.
The efficiency of your operations determines how much money you make on each ride. With a well-run operations team, you will 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 battery are scattered around the city. So each night you will find these scooters, charge the battery, and deploy them the next morning.
Gig vs Hourly
Bird, Lime, Voi, and Wheels use gig workers to charge their scooters. Gig workers register with a company, go through a quick onboarding, and 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. Hell, you don’t even 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, takes them home to charge, and in the morning, puts them out fully charged for riders.
While flexible, the gig model adds a lot of complexity. 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
Maintenance and Repairs
Your scooters carry multiple riders a day and park on public streets and sidewalks. If you’ve been outside before, you know that when something is used by the public things can go wrong.
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 will need to manage and coordinate a team to pick up scooters, repair them, and track issues over time.
Your operations app must be much more powerful than your rider app.
It will need to support charging and repairs as mentioned above along with customer support, analytics, and government compliance.
Bird, Lime and Voi have invested the minimum amount of effort in their operations apps and it shows. Chargers consistently prefer to use Scooter Map over the scooter company’s apps.
As a small scooter company, you don’t have hundreds of millions of dollars to lose. So you can’t neglect operations just because the big guys do.
We are giving new scooter operators all of the advanced features from Scooter Map so that they can efficiently run operations and charging. Fill out the form at the bottom of this article to get more information.
Winning a Government Permit
Bird and Lime may seem like big, scary, competent companies, but they are consistently losing permits to smaller, local companies.
Skip and Scoot won permits in San Francisco which is Lime, Uber and Lyft’s backyard. Shared Scooters won a permit in Portland, Bird didn’t.
You may not be the CEO of a large company, but you understand where you live and work better than Bird’s CEO ever will. You will 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 will beat the big corporations by maintaining local relationships. Choose to deploy in an area where you plan on living and working.
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.
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. And if you have questions on applying for a permit, reach out to us. We’d love to help.
Covering Your Ass Buying Liability Insurance
Alas, we left the most boring part for last… Insurance.
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 hard to buy. The vocabulary is confusing and insurance brokers will scare you into buying more expensive insurance.
We’ve partnered with Newfront Insurance to help scooter companies easily buy affordable insurance.
Video Walkthru of This Article
Here’s what’s coming up:
- Financing your scooters
- Understanding the business model and ensuring you’ll make money
- Other revenue sources — ads and partnerships
- Parking scooters at docks and parking stations
We built the software and support tools you need to start and run a scooter company. Reach out to get started today!
Thanks to Michal Naka and David Sessoms for helping with this article.