We all had days where we’ve been stuck in never-ending, never-moving traffic, watching two-wheelers zip past you to stand tall in the traffic’s front, first ones to rush away when the signal turns green. When you curse at them for being able to maneuver their way around easily; for getting to places earlier; for easy parking. The fact that they have their fate of getting late or on time to the destination is in their hands and not on some government bus driver or a cab driver’s, has you swallow rage. And last but not the least, you have to choose between the stuffed public transport in rush hours to save money or pay by drilling a hole through your pocket for a private cab in this generation of economic tightness. Well, in this article we will explore the Bike Rental Business model, Revenue Model, and Possible Challenges.
Indian Bike Rental Business Model:
Engineers and businessmen saw this a business opportunity and thus entered a variety of two-wheeler rental start-ups.
A. These vehicles are fast. Not in speed but in mobility to work your way around crowds which happen often in rush hours.
B. It is a cheaper means of commutation. Money matters a lot for this working class.
C. The availability of the vehicles is a pro here. They do well the vehicle distribution based on heavy traffic of booking rental services. They set stands up in rental hot-spots for easy and faster bookings.
D. Implementation of IoT in the bikes makes it a neat model with seamless functioning that attracts the user base and grows the bike rental market in India
Efficiency in terms of time, money and access builds any good rental company and these bike renting models tick all these boxes.
Bike Rental Working Model
We describe the business model for bike rental according to how they are implemented in a particular company. The art of developing a business model emerges from a basic idea of the business that needs to be established. Further changes lead the idea to become a means to gather revenue and keep stakes on the market.
- Firstly, the need for a solution in any sector of the market is targeted. They design a unique solution for a problem (congested roads). It needs not to be just a solution in this era of globalization but needs to be the most efficient one possible.
- But how would the marketplace be ready for a solution they never had? In comes the marketing ad advertising. With a constant awareness of a problem that a company is providing a solution for, they create a path for the business model that leads to its destination – funding.
- The essence of the difference between managing finance of a company and managing the life cycle of a company is in their names – business model and revenue model. Although the revenue model is a smaller sub-section of the prior, which focuses on how bike rental companies make money.
Business model deals with the setup of the company, actions leading to financing, hiring of engineers, gaining user base, marketing and lastly, smooth sailing of the company.
Revenue models of companies only deal with gaining investments and compartmentalizing expenditures. It needs to be decided for a company after a careful evaluation of the type of company and its future. Verticals for gaining revenue need to be decided to attain the maximum amount of revenue to get maximum profits. This parameter define how bike rental companies make money to earn a profit.
This would only work well if they set the business model up with perfection enough to function in this cut-throat marketplace. Hence, they are the only two pillars that keep the company stable.
Since all rental companies work for the same service provided to the users, a few of their revenue verticals overlap. This is how bike rental companies earn:
On booking of any sort of ride, the end of the ride is met with you paying for the service based on what amount of time was the vehicle rented for. These shares are often very low to suit the budget of every person regardless of the level of the working class they stand-in.
Marketing is one of the leading ways people earn money in this age of commercialization. Hence, it is no shock to know that bikes on rent can have ads on them which are paid for by the company being advertised.
Apart from these, different bike rentals hold different verticals for revenue acquisition. For example, Yulu came up with the concept of “pause” where a bike can be held on to for a little while in case someone needs to make a detour while on the way to the destination. They account time for the duration of the “pause” and charge accordingly.
Common Problems for bike rentals
Since they all stem from the same root of bike rental business models, they all share the same causes of concern, which are a potential threat to their companies. Possible challenges to Indian Bike Rental Industry:
They are all rental companies and hence are competing against each other. Besides this, people who don’t seem to enjoy driving much would always take pubic transportation or private cabs for their convenience.
We know India for not having a lot of user-friendly roads (especially for bikes in tier-2 & 3 cities). Having to drive a two-wheeler on them could prove to be a hassle for a lot of drivers new to driving.
Since this is a new concept to the masses, they would take time getting used to it. In the meantime, it would be a “public commodity” that people seem to take for granted and find it okay to damage since they do not own it. This mentality could take a serious amount of damage control that needs to be done to maintain the bikes up for rental via regular checkups on them else this could a possible threat to the Indian bike rental startup market.
Latest Tech in Bike Rentals Business Model:
Vehicle tracking accomplished using IoT integrated into the vehicles.
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Yulu, the bike, and bicycle rental start-up use an IoT sensor that beeps the battery signal to the server for acknowledging the need for a battery change. This tends to bikes to not stop or stop fewer mid-rides, which increases customer satisfaction.
These rental businesses make it easier to use on the app and provide faster results, all thanks to the people crunching data in real-time. The bookings are done either by payment before the ride via online money transfer; ride hiring is done by either OTP entry or QR scanning. They all make our lives easier, and that is what we all look out for.
Sounds interesting, browse the business and revenue model of various bike rental startups to understand their working and earning sources. Besides this, prepare yourself for interviews.