Car sharing is a relatively young but promising business area. Short-term car rental has become popular due to its simplicity: the user just needs to register in the system, link a bank card and provide documents. After that, they can rent a car from any location and use the car for as long as they need.
Therefore, more and more people are thinking about opening their own car sharing service. What is important to know before starting such a business? We will tell you this in the material.
How to start a car sharing business
Before opening a car sharing company, you need to choose the format of work. You have two paths to create a business in this niche:
1. Start a company from scratch.
In this case, you should have enough investments to cover all important issues: paperwork, application and website development, purchase of cars for the fleet and their equipment, team recruiting, and advertising campaigns. The advantage of this format is that you control all processes, make decisions on your own, and you do not have to share the profits from the business with anyone.
2. Franchise a well-known brand.
By paying for a franchise, you get ready-made tools and a business model. You will not need to deal with marketing, and many business processes will be at your disposal from the start: a mobile application, parking spaces, maintenance services, support service. But to use the franchise, you need to pay a lump-sum fee, and in some cases, royalties will have to be paid monthly.
Costs to open carsharing
It takes a lot of investment to create a profitable and working car sharing system. In a multimillion city, it is optimal to launch a car sharing business with several dozen cars. In addition to buying a car, the main costs at the initial stage should be directed to:
- registration of insurance;
- alarm system;
- development of mobile applications and software;
- basic equipment of cars (built-in key, first aid kit, fire extinguisher);
- additional equipment (child car seat, pet carrier, phone charger).
Fixed and variable costs
In addition to the initial investment, you need to consider fixed and variable costs. Fixed costs include, for example, rent of premises, salaries of employees, website and application support, insurance, as well as the cost of corporate software for car sharing.
Variable costs may vary from month to month, depending on the circumstances. These are the costs of fuel, car wash, car maintenance, brand promotion, parking fees.
Promotion and advertising of carsharing
The consumer needs to know about your car sharing service, so advertising costs are inevitable. To ensure that these investments are not in vain, it is better to outsource marketing activities. Experienced professionals know how to effectively use promotion tools and channels, in particular:
- native advertising;
- contextual advertising;
- ads in apps.
To promote car sharing services, more classic types of advertising are sometimes used: radio, television, outdoor advertising.
If there are significant investments at the start and an attentive approach to details, the car sharing service can pay off in the first six months of work. As a result, such a business can become an excellent startup that brings a steady income to your company.