Is Car Sharing a Good Business?March 5, 2022
Gas and fuel seem to be getting more expensive all the time. With the cost of living on the rise, it’s no wonder that more and more people are turning to car sharing services to meet their transportation needs. Along with that, enterprising people are able to leverage that need by entering into business as a car sharer to meet that need. Car sharing has become more popular than ever as a business. People have turned their cars that they own into profit. Does this sound like a good business choice for you? We will try to answer that question.
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What is Car Sharing?
As a business model, car sharing is pretty straightforward. It involves renting out a vehicle (or several) for people to use. These services are often managed through a third party app, but you can run a service on your own. A client who has a need for a car will connect with the owner and book for a certain period of time at a certain rate. The owner will then make the car available and have it ready to go by that time. It works very similarly to a traditional car rental company, but car sharing is on a smaller, more personal scale, and anyone can enter the business even if they have no experience.
An owner is responsible for keeping the car clean, making sure the fuel is full, and monitoring mileage and damage. If you are an individual owning your own business, then you will need commercial car insurance even though you are renting a personal vehicle. If you go through a 3rd party app, they will usually cover the insurance for you. The car rental business is a very capital intensive one, so car sharing is an affordable option for renters and a simple way for owners to make some cash.
Do You Live in a City?
Generally, car sharing businesses work best in bigger cities. Cities are where housing prices and crunches have been felt the most. With the rising cost of living in cities, there are more people sacrificing their cars to afford to live there. Plus, a city is a much larger marketplace than a rural municipality.
With such a big market, you are almost certain to find some clients who have short-term vehicle needs. If they don’t own a car, they may need one to visit family and bring gifts or luggage that would be inconvenient on public transportation. Or, they have several appointments in one day and the subway routes don’t stop near any of them. Whatever the reason, people use cards, even if they don’t own them.
It’s Very Simple
If you are looking to start a business or a side gig, then car sharing is one of the easiest options to get up and running. The concept is already widely known, and there is little you need to do up front to get started. Some businesses can be quite complicated to start. Plus, you can run it yourself without the need of any employees or partners. You can certainly hire some if you want, but you can wait until you’ve seen some growth and profits before doing that. The business case for making money from a car sharing service is very easy. All you need to do is have a vehicle you can spare and you are pretty much ready to go.
It’s Passive Income
As a car owner, you have very few responsibilities that you need to worry about. For one, you will need to make sure that the car is ready and fuelled at the arranged pickup point. You will clean it after every use and keep up with maintenance. If you are using a third party app, you won’t even have to worry much about marketing. Some car sharing owners report making as much as $2000 a month while only working 9 to10 hours. Of course, those results will vary depending on where you live and several other factors, but that is an amazing hourly rate.
There is Opportunity for Growth
There are several factors that make car sharing a great opportunity for growth. For one, with other businesses, you may need to work many many hours a week to make a good profit. However, with the relatively low number of hours worked, you will have time if you wish to rent out more cars and make more money.
If you start with a single car, you can start to think about buying another car with your profits to rent out. That way, you can quickly double your income. Assuming you work 10 hours a week with your 1 can, you can then work 20 hours and make twice as much. With demand being what it is, there is almost no doubt that you can reach these milestones. Any business you start will have competition, but with car sharing there is currently plenty to go around. Just make sure you get in on it quickly before there is too much competition.
The truth about a car sharing business is that your assets are out in the world where you have little control over them. If you are renting out a personal car or one that has sentimental value, then this can be difficult to deal with. If you work for a car rental company, you have no personal attachment to the vehicles, and a large corporation backing everything. This is not the case with a car sharing business, and you need to be prepared to accept this.
You Will Be Facing Customers
This can be a difficulty for some car sharing business owners. Not everyone has the gift of customer service skills, and you will be the sole point of contact. That means that you will have to deal with any disputes, questions, and concerns yourself. If you are not used to that, then it could be challenging. If you have a sole proprietorship, then you are on your own, and those responsibilities will fall onto your shoulders.
As with anything else, whether car sharing is a good business depends on your situation. If you feel that it fits with your skills and personality, and you have a good market to draw from, htne it can absolutely be a great choice.