Prepared for francis w. | Delivered February 23, 2020
Operating Costs of Bike Rental Operations
To determine the operating costs of major bike rental operations, like Lime and Bird, in North America. The information should include the cost of charging and charging related expenses.
In 2019, Lime was expected to post an operating loss of over
. This is against a gross revenue of
. Despite solid growth, there are still questions about whether their model of business is sustainable.
Bird had similar results recording a
loss against revenue of
in the first quarter of 2019, although admittedly write-offs and seasonality played a role in this.
It was reported Lime told investors in July, "it spent about
of gross revenue on depreciation,
on local operations, and
on charging. Other smaller costs include payment processing, customer support, and insurance."
Both Bird and Lime have struggled to cover the costs of vandalism and depreciation of their scooters. The average lifespan of the scooters is
The small battery size and low electricity costs mean that the average bike costs less than
per charge. As the quality of the bikes improves, maintenance costs should fall to around
per mile. Extending the life of the bike to a year will yield
in savings per mile. If the lifespan were to decrease to one month, the cost per mile would increase to
Quartz has estimated the average lifespan of a scooter to be just
days. Bird needs five rides per day at the cost of
per ride to recover the cost of purchasing the scooter. The average trip is
minutes. The scooters average
rides per day. This means each scooter makes
in revenue per day.
The cost breakdown includes charging costs of
per ride, repairs of
per ride, credit card fees
per ride, customer support
per ride, and insurance
per ride. This adds up to costs of $2.75 per ride.
In addition to these
, some cities require the company to pay a probationary license fee, along with additional licensing costs, cities charge a fee for the docking stations, each vehicle, and per designated group parking area.
In our first hour of research, we have found some details around the operating costs of bike rental operators in North America. There appears to be a considerable amount of data available that provides details of not only costs but
difficulties associated with the business model that Lime and Bird have adopted.
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