Operating an efficient e-bike or scooter subscription service
The rise of subscription-based services has revolutionized various industries, and the vehicle segment is no exception. With a 30% year-over-year growth projected for the next decade, subscription e-bike and scooter services have become increasingly popular due to changes in consumer consumption patterns and advancements in mobility.
We recently held a panel discussion to understand the key strategies for efficiently operating a subscription vehicle fleet. You’ll find the main conclusions from the discussion in this summary article. Experts included were:
Driss Ibenmansour, Co-Founder and CEO of Motto, a French e-bike subscription provider
Kristjan Maruste, founder and CEO of an e-scooter subscription business called Äike
Sven Lerche, Sales Manager from Comodule, working with several large subscription fleets
And for a brief input also Kevin McLaughlin, Founder and CEO of Zygg, a Canadian-based e-bike subscription service
You can see the full recording of the discussion here:
The shift toward Subscription
The success of subscription models in software, exemplified by platforms like Netflix, has paved the way for subscriptions in other industries. People are now more interested in accessing services rather than owning products, making subscription-based models highly attractive. This shift, coupled with the development of micromobility and infrastructure, has created a demand for e-bike and scooter subscriptions as a convenient and cost-effective alternative to ownership.
Subscription services act as a bridge between traditional retail models and sharing vehicles. People who are new to using e-bikes or scooters are not sure whether to justify the high cost of buying the vehicle and how to deal with any maintenance or theft issues. The subscription model removes these barriers and enables more people to switch to micromobility.
Emphasizing service over product
The core of any subscription-based model lies in its service offering. Customers value convenience, peace of mind, and overall service experience rather than the physical product itself. While an e-bike company centers its business and customer value around the bike, subscription businesses put service quality first and vehicle second.
Addressing operational challenges
Setting up and running an efficient subscription-based e-bike or fleet efficiently involves overcoming various operational challenges. Key areas to consider include:
1. Customer Service
Providing responsive and efficient customer service is crucial for maintaining customer satisfaction. Leveraging remote diagnostics through IoT technology can help identify and troubleshoot issues, ensuring quick and accurate resolutions.
2. Repairs and maintenance
Establishing a robust network of repair shops or offering pick-up solutions near users' locations is vital to minimize downtime and keep customers happy. Quick repairs or replacement of bikes within a defined timeframe can help meet customers' low tolerance for breakages. Motto promises their customers that any issues are fixed in 48 hours or they’ll receive a replacement e-bike. The upside is, that the frequency of damage is 3-4 x lower than in sharing fleets as users have the feeling of owning the bike, and that makes a huge difference.
3. Logistics
Depending on the operating area, and whether maintenance is local or managed via shipping, getting logistics right is a crucial part of subscription vehicle businesses. For e-scooters, shipping may be easier, while e-bikes might require on-site or nearby repairs. Speedy delivery of replacement parts or vehicles is essential to minimize customer waiting times and maintain satisfaction.
Improving total cost of ownership
Improving the total cost of ownership for e-bikes and scooters is crucial for the sustainability of subscription-based business models. One of the main costs is vehicle theft. Leveraging IoT technology allows for remote tracking and recovery of stolen vehicles, minimizing losses.
To make the e-bikes last longer, tracking e-bikes and their components data gives insights into how long different components last and which of them should be replaced. Over-the-air updates enable remote software upgrades and decrease the need for physical maintenance. For example, the biggest bike subscription company Swapfiets has said that using data has helped them to cut down bike breakdowns by a whopping 66%.
Connectivity also enables to the management of customers who haven’t paid for their services and are in debt, by reducing their vehicle’s speed or disabling the e-bike system remotely.
Dealing with e-bike or scooter theft
Theft can pose a significant challenge for subscription fleet operators. According to Motto, their average theft rate is 10% of the fleet. There are two main things to address to deal with this:
Leveraging IoT technology together with recovery teams, local law enforcement or security companies can greatly enhance the chances of retrieving stolen bikes. In Motto’s case, 2 out of 3 stolen bikes are recovered thanks to GPS positioning. Comodule’s customer data also shows an average of 70-80% recovery rate for stolen e-bikes equipped with IoT. In case of theft, disabling the e-bike or scooter system remotely renders it worthless, reducing the incentive for theft.
Educating users about preventing theft and how to responsibly lock their bikes is a good preventive measure to lower the theft rate. Also, implementing penalties for users for negligence can help mitigate theft-related risks.
As an extra layer of safety, implementing theft insurance as part of the subscription package provides additional value to customers while lowering insurance costs through bulk coverage arrangements.
Connectivity technology empowers subscription fleets
In conclusion, IoT technology plays a crucial role in improving the efficiency of e-bike and scooter subscription services. Connectivity improves maintenance, ensures vehicle security, and helps to gather relevant data to improve the service and vehicles. If you have any additional questions about connectivity for e-bike or scooter subscription services, please contact us at sales@comodule.com and we’ll be happy to advise you.
