The economics of E-bike hire

[RustyMTB]

Lot of smart people around here, so what do we think of this? Chap local to me has got himself in the paper promoting his eeb hire venture. The bones of it are half a day rental for £40, full day for £65 & I guess some tack on services, merch, guided riding, etc.

I wonder if anything other than pin money & a lifestyle business can come of it. Off the top of my head, I'd guess rain pushes demand to zero, weekends you're overrun, weekdays you can't give them away. Servicing, cleaning, insurances, vehicles, premises, depreciation, repairs all factor in.


Assuming you can get the bikes & spares as a starting point, let's say six day operation, ten bikes at £65 & a pessimistic 50% utiisation = £1950/wk before costs. On the face of it, that could add up but then seasonality in the UK at least suggests you'd be kicking your heels a lot of the time between say October & March & you'll soend a long few months ticking up bills without much income. Sky or pie?

 

[mark.ai]

50% utilisation seems optimistic to me I know absolutely nothing about this kind of thing, but I'd guess at 10% to 25% ...
Maybe in a really popular tourist location demand could be high. Or split across several locations/areas.

 

[RustyMTB]

Yeah, that's true. Should have said the guy I read about is hawking them on the South downs, so ticking the pretty location/fun trails box.

 

[R120]

I would say very location and season dependent. Also given the current lack of components/spares on the market its got to be difficult to keep a fleet of any sort of rental bikes going right now

 

[The Hodge]

Location location location ...
My mate & owner( The Bike Place at Kielder ) can't keep up with demand ..its not high end bikes either... hardtail Haibikes ..
He is based at Kielder and the typical rider is not "serious" ..or necessarily wanting to take the red trails ..but the easier multi purpose Lakeside Way on Kielder Water ..( some or part of the 27 mile route ) ..
The trick is to know when to sell & replace ( under normal circumstances when stock is plentiful?)

 

[Jimbo Vills]

I would say very location and season dependent. Also given the current lack of components/spares on the market its got to be difficult to keep a fleet of any sort of rental bikes going right now

you’d think so, but whenever friends have tried to hire one at bedgebury to join me on a spin, they are always booked out in the mornings. Granted weekend peak times.

But some days they must be getting 2 or more hires I’d say

£60 for 2hrs soon adds up.

I’d say that generally people that hire them will go easy on them (apart from newbie errors I guess) so maintenance might not be as bad as you’d think.

Either way, they are still hiring them so must be making money....

Good luck to anyone trying to give it a go.

But as said, location is key!

 

[jerry]

When doing the math, I would tackle it the other way round - not starting with what they could make, but what the TCO would be, and see how many times you' d have to rent them out just to break even. I think they generally underestimate this. This includes the hours spent on cleaning, maintenance&repair, electricity, and (currently) the rather short lifespan of an ebike. Analog bikes can be kept in the road virtually indefenitely, whereas with EMTBS, that's far from certain.

 

[Paul Mac]

Don't forget though, after one season of hire you'll probably sell off the whole fleet and grab back half of the investment, and start again

 

[The Hodge]

if you can get stock ..and as mentioned earlier ..thats the problem ..

 

[SwissMountainLeader]

I think it's going to depend on the location.

Here, which is a mountain station in the Swiss Alps, the sports stores do a lot of rentals, skis and bikes but climbing gear as well. The staff are working over a range of activities so one part of the business doesn't need to pay all the costs. They also have contracts with local schools, guides and instructors for group gear. There's some ancillary services that can be sold but rental (here) would rarely lead to a sale. The rentals are way more seasonal than they would be in the UK, skis in the winter and bikes in the summer, not a lot inter-season.

An ebike here for the day would be about £50.

Gear is sold off pretty regularly, the schedule will vary but there's a lot of residual value given the discounts on purchase. Although you'll still find stores in other stations with some pretty dreadful old rubbish.

I'd think the business as described would do fine but I'd imagine it's part of other activities. "Lifestyle business" I could live without, they do some damage to other businesses and clearly we're all working to support our lifestyles

 

[Planckus]

I rode a demo levo in the rain (organised for weeks and drove 4 hours so really had no choice) spoke to the dealer the next day he said they replaced both sets of pads because they were fucked after 1x3 hour wet ride, I wonder if rental places allow wet rides if someone really wanted to go for one? My point is you would have to restrict hiring out bikes in the wet otherwise maintenance would be insane.

I guess for a demo, you would want it to be in mint+ condition, but a rental shop would be satisfied with a little less. The ones I have rented have been in a working condition, but not exactly new

 

[Gary]

There's a guy in a village near me sells really good homemade pizza from a van. in the winter he barely opens at all (one evening a week) and in summer he opens for just a couple of hours each evening.

If you enjoy making pizza that sounds pretty good to me

 

[Jimbo Vills]

There's a guy in a village near me sells really good homemade pizza from a van. in the winter he barely opens at all (one evening a week) and in summer he opens for just a couple of hours each evening.

If you enjoy making pizza that sounds pretty good to me

Or not working in winter ??

 

[Zimmerframe]

There's a guy in a village near me sells really good homemade pizza from a van. in the winter he barely opens at all (one evening a week) and in summer he opens for just a couple of hours each evening.

If you enjoy making pizza that sounds pretty good to me

Sounds like he sells S-Works Pizzas !

 

[Gary]

I'd ask him but it's kinda none of my business. ?

 

[Janc]

Don't forget though, after one season of hire you'll probably sell off the whole fleet and grab back half of the investment, and start again

I have a friend who operates a business in a water sport and essentially has constant replenishment and offers for sale as ex demo with discount off new. That way they sell on in much better condition. Remember also you can depreciate your asset against the business.

 

[Swissrider]

Where I live (in the Swiss Alps) the hire bikes, whether analogue or electric are bought by the outdoor shops (who have access to trade prices and deals for bulk orders) at a considerable discount in the spring and at the end of the season they generally sell the lot at up to 50% of retail price. This is seen as a bit of a bargain by lots of locals who buy them up and if the bike hasn't been used too much can be a very good deal. So the shops can sell them for not much less than they bought them, so they don't need to rent them out for many days to break even. I guess they would not do it if they could not make reasonable profit. The hilly and steep nature of the terrain means that even on not-technical trails, only pretty fit people could really hire analogue bikes. The great thing about ebikes is that the market is now so much bigger as the long climbs are no longer the barrier they used to be. I certainly think this is going to be a significant market. I was in Locarno a few weeks ago and I reckon 90% of the bikes I saw were ebikes.