Sharing Setup

5 Steps to the Right Business Model

09 March 2021 | Reading time 6 min

analysis stage

Shared Mobility solutions are becoming increasingly popular and inevitably form an important part of tomorrow's sustainable mobility. If you have decided to help shape the mobility of the future and become a shared mobility provider, it is not so easy to develop the right business model. However, since this forms the basis of the sharing project, the conception phase is already crucial for success. To get more clarity on the business model, the following 5 steps can help:

Market research

1. Market Research

First, it is advisable to conduct a market research and filter out which shared mobility providers already exist in the area. If there is already a shared mobility offering, it might make sense to opt for a different use case or include more budget for marketing purposes. However, if the business model stands out, for example by operating an e-carsharing service instead of a "regular car sharing service", providers can already set themselves apart from the competition in this way.

The research can also help determine which providers are pursuing similar concepts in other regions in order to get into touch with them. For example, cities and municipalities can learn from the valuable experience of existing providers.

Also, find out if there are any legal requirements in your community or city that need to be addressed before launching the shared mobility project.

target group

2. The Target Group

When designing the business model, the most important question is probably the target group: Who should the sharing be aimed at? What should the vehicles primarily be used for?

There are several use cases that come into question, but they are not mutually exclusive: Should commuters be addressed? Are they intended to reach people who use the vehicles for shopping? Should the vehicles be used to cover the last mile at train stations, for leisure activities or for tourists?

Depending on the use case, the question of the appropriate vehicle type also becomes clear. On closer examination, there are also other, alternative use cases and vehicle types that can be integrated into shared mobility projects and thus into your business concept, for example the Cargobike.

→ Use case "shopping/errands": For larger and heavier purchases, the car is the most suitable option. For smaller purchases, also a Cargobike. Users with young children also often resort to cars, as walking can be stressful and there is no room for children on a bike plus shopping.

Offering e-vehicles can also expand target groups and use cases. If older people prefer to rely on a car due to their physical fitness, an e-bike could be an attractive alternative for this target group. The same is true for commuters or users with business appointments: While regular bike sharing might not be an option, an e-bike offers the possibility to get to the desired destination in a relaxed way.

geographic

3. The (geographical) location

In addition to the target group, the geographical location also plays a big role when it comes to which business model is the right one for your sharing.

Roughly speaking, should the sharing be used in a more rural or urban area?

Currently, most sharing providers are limited to urban areas. Nevertheless, rural areas also offer potential if your sharing offer addresses the specific local conditions: Important hubs are usually further away from each other, so the share of private transport is very high. In addition, the public transport infrastructure is usually not as extensive as in urban areas. If e-vehicles (e-cars, e-bikes, e-scooters) are to be used in your sharing, it must also be ensured that sufficient charging infrastructure is available - this is still (mostly) thinly spread in rural areas.

situation in germany

Did you know?

In Germany, for example, 61% of the population lives outside the urban area. You can find out more about the potential of different settlement regions in the Status Report 2020.


Go to report
budget

4. The Budget

Another key element in the design of a business model is the available budget:

On the one hand, it has an impact on the choice of vehicle types, since the acquisition costs are lower for bike or scooter sharing offers than for car sharing solutions. On the other hand, it affects the size of the vehicle fleet. Finally, the higher the budget the larger the fleet of the sharing offer can start. This is particularly important because a sharing offer should always have at least two vehicles of one vehicle type available in order to ensure the balance between potential utilization of the sharing offer and the minimum necessary flexibility for users, because:

The smaller the offer, the greater the probability that users will not find an available sharing offer vehicle when needed. If this happens to the user more often, and he or she cannot use the sharing offer flexibly, it will subsequently not form an alternative to owning a vehicle.

hybrid solution

5. Hybrid Solutions

Combination models can also be smart solutions for your sharing business. You do not have to limit yourself to one type of vehicle with one use case.

If sufficient budget is available and local conditions allow, combinations of different vehicle types offer the opportunity to map additional use cases and thus serve additional users. Again, it is important that this takes place within a clear framework.

LeasePlan Netherlands serves as an example of such a combined business model. In its shared mobility offering "LeasePlan Tripp," residents of building complexes are offered shared mobility services in the underground parking garage. Shared cars as well as e-bikes and e-cargobikes are located there. Users who normally tend to use a bike can resort to car sharing in bad weather, for larger errands or longer distances.


More about LeasePlan Tripp:

Conclusion: How do I create the right business model for my sharing?

In order to set up a successful sharing offer, a conscientious analysis and the conception of a business model are essential. The conception depends on the target group and the use case. Local conditions, which vary from provider to provider, also play a major role. Therefore, it is important to clearly define the respective target group and, if possible, to exchange ideas with providers in order to tailor the business model to your goals.

Checklist Business model

read on

Always stay up to date?


Subscribe to newsletter