Car sharing is a short-term car rental via a mobile application. This is a lightweight option for renting a car, designed for short-term use, literally for a couple of hours, with a reserve amount. Another advantage of car sharing is that the cars are scattered around the city parking lots, which means that one of them may already be within walking distance of the client.
In the world, cars were first rented out in 1948 in Zurich. And over the years, this type of rental has managed to absorb many changes and transform into the car sharing as we know it now.
The relevance of the business idea
For residents of large cities, it is often costly to have a personal car. Especially when it is rarely needed and only for certain purposes: a vacation outside the city, a business meeting, or a trip. Therefore, it is more profitable to use car sharing services. After all, the cost of such a lease for a client directly depends on the time the car is used and is calculated daily, hourly and even per minute.
Car sharing was created as one of the global trends in the sharing economy. And it lies in the fact that it is more profitable for the population to pay for temporary access to products than to buy them. Joint consumption is a form of social cooperation and allows you to “squeeze out” the maximum efficiency from resources.
Another advantage of car sharing is the absence of a grueling search for rental companies by the client, the signing of a “tricky” agreement and other nuances that arise during communication with managers of traditional rental companies. The car sharing system is designed so that the client can quickly and at any time find a car in the current or another city where the service is available, rent it in the application for the required amount of time and use it on the same day. This is something like a short-term rental of city electric scooters.
Costs and profits
You can start such a business completely from scratch, but for this you need to have a certain start-up investment. We have made an approximate calculation that makes up 5,200,000 UAH. Let us take a more detailed look.
- Buying a car. You can start with the purchase of 10 cars of mass models. This can cost about 5 million UAH. To reduce initial costs, you can rent cars to make the monthly payment a little lower.
- Mobile app. Since the owner profits not only from the time the car is used, take care of a high-quality and convenient application. First of all, car sharing software will allow customers to choose a car and use the service. Second, by monetizing the application, you will receive client registration fees. You might want to order application development from outsourcing companies specializing in this. The expense depends on the competencies of the company and the desired options, and will be approximately 100,000 UAH.
- Paperwork and insurance. In order to conduct business, register a legal entity, conclude a contract with fuel companies, insurance companies, and maintenance companies. Insurance alone will cost about 100,000 UAH.
- Advertising. It is better to entrust it to specialists, whose services will cost about 20,000 UAH per month. In addition to contextual and targeted advertising, we recommend using SMM services. The active development of social networks will allow you to capture a specific audience and communicate with them through personal messages.
There is another option to start a car sharing business by getting a franchise with a large company. In this case, the service provider takes full responsibility for the IT component and marketing. However, royalty is a pitfall here. You will have to share the profits with the franchise founder.
How to choose a supplier
Buying a car is the most expensive investment in business. And in order to choose the right car, contact a special car selection company. You can find such companies simply by searching your browser. They will help not only to choose the right cars for your criteria, but also check the level of maintenance and deliver the car to you. At the beginning, you might want to buy used cars in good condition, and over time you can afford to buy new cars or take advantage of leasing.
Specialists will also help you develop car sharing software, but you can use ready-made car sharing software. And at this stage, you should not button up your purse, because the application for customers is the basis of the business. A good application is not cheap, because it should be convenient and functional.
Imagine how many customers you can lose if you do not have a custom application, or it does not work correctly. With this app, you will keep a record of rented cars, see their level of maintenance, collect sales reports, and take care in time of possible mistakes of customers or staff.
Compared to other expenses, this part will require small costs. Initially, for your car sharing company to work, you will need several people who will be responsible for regulating the main issues, such as technical control of the condition of cars, timely maintenance, accounting of fuel cards, car refueling, and support service. You will also need the services of a lawyer, as well as a programmer who will resolve issues related to the software.
Some app development companies provide additional maintenance services, so keep that in mind when choosing the right one. Ready-made software for car sharing is very beneficial for the business owner, because it allows you to delegate this issue to specialists and get a quality product.
Advertising for business
There are many types of advertising: newspapers, radio, television, internet. It is up to you which type to choose you. We recommend using contextual advertising — a type of online advertising where ads are shown in accordance with the time, audience requests, location, and context of web pages. This is more profitable than SEO optimization where you get results after a long time.
Social media is another way to promote your company. Proper use of this tool helps a business solve several problems at once: it increases recognition, boosts sales, and helps to set up communication with customers. And it is also faster and more convenient to get feedback from users through social networks.
The world is rapidly urbanizing and new business opportunities are emerging. Opening your car sharing company requires considerable investment and a lot of work. However, if you plan everything correctly, it is really possible to make your business a good addition to public transport and cycling. It will easily pay itself off in an urban environment and will become a salvation for those who need “wheels”, but do not have their own car.