If you want to launch a carsharing service, the time is now! By equipping yourself with the right knowledge and team, you’ll set your business up for success.
AI-powered technologies have made carsharing more accessible not just to users, but also entrepreneurs seeking to launch their own carsharing business. If you’re thinking about starting your own carsharing service, here is an overview of the 12 steps necessary to help you get started:
- Select your carsharing model
- Set up a legal entity
- Establish the business model and revenue plan
- Build partnerships
- Select a technology platform
- Procure vehicles
- Identify the refueling/recharging plan
- Secure carsharing insurance
- Develop an operations and staffing plan
- Public or private?
- Identify host site(s) and service’s city(ies)
- Grow marketing and measure success (KPIs)
1. Select your carsharing model
First, decide how users will pick up and drop off vehicles. Free-floating is a service offering shared vehicles without fixed stations, meaning vehicles can be picked up and dropped off virtually anywhere as long as they are returned within the home zone. With station-based vehicles are picked up and returned to a fixed station.
Next, select a booking method. With scheduled-booking, users book a vehicle in advance for a period of hours, days, or weeks. They then pick up the vehicle at a fixed station (e.g. parking lot, mobility hub) on the allotted date/time.
For last-minute trips, the instant-access booking method allows users to access a vehicle at a moment’s notice. Users visualize the vehicle they want via the platform’s app, book it for immediate use, and start/end their trip anywhere within the service’s home zone.
2. Set up a legal entity
You have several options: co-op model, for-profit, a mixed partnership, or non-profit. This decision is based entirely on your goals and what you aim to achieve with the service. Traditionally, many carsharing services have opted for a co-op model or for-profit approach. Your legal entity can impact the funding for which your entity can apply, so remember to consider this carefully when making your final decision.
3. Establish the business model and revenue plan
When you launch a carsharing service, having multiple revenues through different streams is very beneficial, primarily to manage the initial expenses in the first few months.
Consider implementing the following: usage revenue (i.e. mobility plans, subscription), fees (i.e. pre-booking, special requests), user incentives (i.e. promotions, discounts), and financial aid (i.e. private/public grants).
4. Build partnerships
Partnering can happen with local businesses, schools, organizations, and even other mobility service providers. Establishing strategic partnerships when you launch a carsharing service can ensure operations run smoothly and efficiently, especially when it comes to logistics such as charging, refueling, parking, and cleaning. They are also a great way to generate additional revenue and create visibility.
5. Select a technology platform
Assess your specific needs. Technology providers are diverse in their services. Some provide a simple software back-end solution while others provide a full spectrum of tools from which to choose.
If you’re looking for comprehensive support throughout the life of a service (i.e. fleet management/operations, app support, 24 hours customer support, operations, insurance, vehicle procurement, software, and hardware integration) consider a turn-key solution.
An AI-powered multi-service mobility platform offers users diverse mobility options all within one single app. For example, scheduled booking, free-floating, per min/day/month; one type of vehicle or several (multimodal); in one city or across several (multi-city). And even if you decide to start off small, a multi-service mobility platform will help you scale your business in the future. So make sure you’ve done your research thoroughly before making your decision!
6. Procure vehicles
With so many vehicles out in the market, which should you choose? The most common types of EVs available are Hybrid, Plug-in hybrid, and All-electric. You also have the standard ICE engine vehicle.
Each vehicle type has its own advantages which will correspond more or less with your overall business model (selected city, local refueling/charging preference, infrastructure, available financial resources, etc.) and target audience. This is why we encourage you to carefully assess all aspects of your business plan when planning vehicle procurement.
If you procure vehicles that are not already “connected” you will have to connect them by installing reliable, built-in vehicle technology hardware.
7. Identify the refueling/recharging plan
No matter which vehicle type you select it’s important to identify the refueling and recharging plan, prior to procuring vehicles. Ask yourself the right questions (see full report) that will help define your plan. Once you launch your service, make sure to inform users about their options. Users should know exactly what they are paying for when they use your service.
8. Secure carsharing insurance
Start researching as early as possible and make decisions based on your individual business model and goals. For example, if you have a smaller fleet you may want to work with an insurance broker to get proposals. This is because insurers prefer to spread their risk across more units (meaning greater cost-efficiency).
When narrowing down your options, it’s also beneficial to decide whether you want to go for insurance that offers more coverage and not only third-party. More coverage means a heftier price tag but can help mitigate risk.
9. Develop an operations and staffing plan
We suggest focusing on lean operations. Decide who will be in charge of which everyday operations and ask yourself: Will operations be managed internally? Or by an external contractor? How much staff should I hire? We delve into the answers to these key questions in the full report.
Once you’ve set up your team, make sure you prepare a clear and smooth onboarding process. Every person involved in your carsharing service should know exactly how to do their part in keeping the fleet running smoothly.
10. Public or private?
If you opt for a private network, only those who are invited to the network or have a unique code will be able to see and access vehicles on the platform. If you’re thinking about setting up a B2B service, you may want to consider going private. A public network (B2C), on the other hand, allows anyone who signs up to access a vehicle.
Regardless of whether your carsharing service is public or private, make sure you have sufficient security throughout the registration process. Doing so will help prevent potential fraud. We cover aspects such as personal data protection and credit card payment in the full report.
11. Identify host site(s) and service’s city(ies)
Where you decide to launch your carsharing service has a direct impact on your user base and revenue streams. Footfall is important: the more people in a given location, the more potential users.
In addition to population density, you’ll have to consider other factors such as charging infrastructure, the state of the current transportation network, etc. Other factors to consider? Accessibility, safety, and whether a city has prioritized sustainable mobility.
12. Grow marketing and measure success (KPIs)
Build an effective action plan for your carsharing service by asking yourself the 5 Marketing Ps (people, product, price, promotion, and place). You’ll want to boost your marketing activities via different channels and approaches, for example, street marketing, partnerships, in-person events, etc. We delve into these examples and more in the full report.
Once you’ve established your goals and timeline (a certain number of members/vehicles by a given date), track your KPIs to determine how well your strategies are working.
Once you’ve followed these 12 steps and successfully launched your carsharing service, you’ll want to consider scaling (growing your fleet size, launching in other cities, etc.) and adding onto your offer (new vehicle models, pricing plans, etc.). Our 7 Key Ingredients for Carsharing Success is a great place to get expert insights into how to take your service to the next level.
Ready to get started? Download the full report to Launch a Carsharing Service in 12 Easy Steps today!