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An e-scooter rental startup has the potential to make you a billionaire. Learn ‘how’ from the success story of top E-scooter startups!

Coruscate Solutions
An e-scooter rental startup has the potential to make you a billionaire. Learn ‘how’ from the success story of top E-scooter startups!

Transportation is the industry which needs the most number of innovation in the current time. The unplanned system of transportation is something which is heavily affecting not only human but also putting the whole earth in risk. This is why any new innovation that hits the transportation industry must be public and environment-friendly and not costly. E-scooter is one of the innovations which satisfies both the urgency of the industry.


What is the E-Scooter Rental startup business? 


It is the bussing of providing on-demand E-scooter to the user to roam around highly congested and polluted cities by paying a very low amount. The user can do the whole operation, from searching nearby available E-scooter to the paying the fare, only through his phone.  


What is the market size of the E-scooter startup business?


Thanks to its less price and more usability, people have adopted E-scooter unlike any other piece of innovation. Thus, E-scooter companies are getting more and more customer every day. An E-scooter sharing company named bird becomes a $2 Billion company in just 14 months of its launch. It is the officially fastest company which hits the valuation of $1 Billion.  Another company named Lime which hits the valuation of $1.1 billion in just 18 months.  According to CB Insights, in 2017, investors invest $2.8 billion into E-scooter sharing startups. Additionally, the following graph clearly depicts that the popularity growth of E-scooter sharing business.


Why E-scooter startup becomes so successful?


  • More user-friendly


There isn’t any record of how many E-scooter riders have involved in an accident. But it seems that there is no accident happens with the E-scooter riders in top urban areas. Also, riding an E-scooter is so easy for any age of people. Thus, it is observed that not only young people and students but some older people prefer to commute on E-scooters. Apart from this, with the mobile application, it is a very simple task for users to find the nearby scooters, hire an E-scooter, drop the E-scooter and pay the fare. These ride-sharing companies are smart enough that they have deployed their E-scooters near all train stations, school, corporate parks, beaches and bus station. Not only this, but riders are free to drop the scooter anywhere in the city limit. Because of this many user convenience, it is very obvious that user’s acceptance rate remains high.    


  • Not costly


If we compare the on-demand taxi fare price with the on-demand E-scooter fare price for 3 to 4 KM, then the difference in the fare would be 3 to 4$. Yup! E-scooter wins here. In this way, E-scooter is the most pocket-friendly way to roam in the city for any tourist, students or even commuters.    



These are the market giants of E-scooter sharing business. 


  • Lime


 An insight  into the company

Lime is the E-scooter and bike sharing company which was founded in June 2017. Lime’s first operational area was at the University of North Carolina. The company has provided 125 bikes to the student to roam on the campus of the university. Next month, the company has expanded its services to the few cities of Florida, Indiana, and California. Currently, Lime’s E-scooters are available in almost all urban cities of the USA and in some of the most prominent universities. Countries like Australia, Germany, France, Canada, Chile, Denmark, and New Zealand have also welcomed Lime. Currently, Lime’s estimated revenue is $26 Million. If you are still not satisfied with the detail of Lime success, then go through the following graph!



Funding details:


In the first round of the funding, Lime raised $12 million through Andreessen Horowitz venture capital firm. During the second round of the funding, the company valued $225 million. And in the third funding round, the company raised as much as that it became the company of $1.1 billion valuations.


How they manage the fleet of E-scooters? (This is interesting)


The major concern of E-scooter company is the charging of distributed E-scooters. What Lime does to charge its E-scooter is letting contractors to do it for Lime. So, basically, anyone can sign up to be a contractor (Lime called it Juicer) and these juicers are responsible for charging E-scooter overnight. Juicer is get paid on how many batteries of dead scooter they have changed.


  • Bird


An insight into the company

The bird is the other unicorn E-scooter ride-sharing company, started by a former executive of Uber, MR. Travis VanderZanden in September 2017. It started its first service in Santa Monica California and currently have an operation in 100 cities of North America and many other countries of Europe and Asia. In 2018, the bird was successful to make its place in time magazines 50 genius companies and LinkedIn awarded it with the one of the most sought after startup.

The bird is not only providing the E-scooter rental service, but it is also developing E-scooter by themselves which are more battery efficient.    


Funding Details

In its series A round of funding, it has raised $15 million by Craft venture. In series B round of funding, it has raised a whopping $100 million and becomes the fastest company to reach $1 billion. In June 2018, bird raised more funding of $300 million which valued the company at $2 billion.


Bird app features:


  • A user can check the all nearby E-scooter in a map.
  • The user can select any one E-scooter and by scanning the QR code which is there on the E-scooter, it will unlock and the user can access it.
  • When the user reaches his destination, the user can drop it anywhere. He will be charged on how many minutes he has used the E-scooter.
  • The user can check the battery level of the E-scooter on the mobile app.


Business model


To understand how much money does Bird make, let’s divide this section in two part. One part which refers to the revenue of the bird, and another part which refers to the gross margin of the bird. According to the database, in   2018, bird’s revenue was $65 million and in October 2018, it reached $250 million. Bird generated $3.65 per ride. So, it is important for the bird that every scooter offers at least 3 to 5 ride a day. Ideal E-scooter means a loss for the bird. Now, let’s take a look of the cost bird has to pay to generate this much of the revenue. From the graph, you will get the idea where the bird is spending money. So, if we do revenue minus cost of revenue, we will get 19% which is the gross margin of the bird. 19% gross margin is quite low for a company. But we don’t have to forget that bird is having so much cash. Also, there is a prediction that the bird will achieve more than 30% of the gross margin rate in the coming years.


Current threats of the E-scooter rental business


  • Government policies


Companies like Lime and Bird has fought a long legal battle against municipal and local authorities. Local authorities are more concerned about the safety of the pedestrian as it is very obvious that a lot of riders will ride the E-scooter on the footpath. Also, not all road has a dedicated bike lane where the only bike is allowed. So where there is no bike lane, riders have to ride either on the road or on the footpath by putting a life of so many people in the danger. Apart from this, there are no specific points to park the E-scooter. Thus riders end up parking illegally on the road or on the footpath.


  • Vandalism  


There is so many news of abandoned scooter are peeping out every day. Vandals smear the scooters and producing a high economic loss to the company. Any e-scooter generally comes at the price tag of $500-$700. Even with the live tracing ability, it is hard for companies to stop vandalism. There is a lack of any full proof plan.  


In the nutshell:


E-scooter ridesharing is the billion dollar industry and has the potential to transfer the way people commute in the city. It does also have the potential to make our planet greener. But all innovations come with the limitation. E-scooter ride-sharing business has so many limitations. In order to get rid of those limitations and to create a long-lasting green transport solution, government, E-scooter ride-sharing startup companies, and entrepreneurs should work together.



About the Author:


Vishal Virani:


Vishal Virani is a Founder and CEO of Coruscate Solutions, a leading mobile app development company, having expertise in electric scooter app development. He enjoys writing about the vital role of mobile apps for different industries, custom web development, and the latest technology trends.


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