Should I rent or buy an electric micromobility vehicle?
A cost analysis of renting versus buying an electric scooter or bike.
Let’s face it, modern-day is all about efficiency and finding new ways to do old tasks better and faster. And one thing that has always caused universal headaches seems to be commuting, or simply getting from one point to the other in the least painful way. This has inspired the development of many alternatives that aim to ease this pain point, such as ride-sharing apps, renovated public transportation initiatives, and more recently, electric micromobility vehicles like e-scooters, e-bikes, and e-mopeds.
Within the past year or so, it seems that electric scooter and bike rental services are everywhere, including a few trials in Boston, which is making them hard to ignore. But what if we told you that owning your own electric micromobility vehicle might actually be a better option for you, in terms of lifestyle benefits AND cost savings? We’ll cover the following topics:
What is the rental model?
Renting a micromobility vehicle is a service you’re most likely already familiar with if you’ve seen electric scooters lying around street corners or neatly stacked rows of city bike docks. Springing around major destinations everywhere (including a brief stint for Bird, Lime, and Spin in the greater Boston area), these services are all about catering to the tech-savvy rider that might be interested in testing out alternative modes of transportation.
The underlying premise behind these services is a phone app that allows users to locate electric micromobility vehicles in their area, activate a ride through their device, and track the user’s location as they take the vehicle to their desired location. And while cost structures vary between services, the most common pricing model includes a combination of a “ride activation” flat fee and a per-mile or per-minute fee.
The most popular electric scooter and bike rental services in the market currently are Lime, Bird, Spin and Citi e-Bike. However, major ride-sharing companies, Uber and Lyft have begun to generate their own fleets of electric scooters, called JUMP and Lyft Scooter respectively.
The biggest upside to the rental model is a low-cost barrier to entry. It’s easy to stomach paying a few dollars to take an electric micromobility vehicle to work or to run an errand. However, with this lower commitment comes several downsides:
Rentals are not always available when and where you need them. And in some cases, they can be extremely inconvenient to track. You not only have to worry about how to get from point A to point B efficiently, but you also have to worry about how to locate the vehicle in the first place. In addition, some rental services have restrictions on areas their vehicles are allowed to travel, which may not be conducive to your exact routes.
Rental vehicles have lower safety levels. Since maintenance is out of your hands, you just have to trust that service representatives are upholding a high safety standard and routinely checking their vehicles for issues or potential replacement needs.
Rental services use a “one-size-fits-all” approach. This means that their vehicle components, such as the shocks, motors, or brakes, may not be optimal for your specific terrain and conditions. Therefore, if you’re not always riding on smooth, fresh pavement, this may not be ideal for you.
The rental model may not be as eco-friendly as it seems. If your goal is to lower your carbon footprint by replacing your current mode of transportation with an electric micromobility vehicle, renting may not be the best option. Most of these services function by hiring gig workers who drive around, usually in large trucks, and collect the vehicles for overnight charging. This practice alone often negates the benefits of lower CO2 emissions that riding an electric micromobility can provide.
2. What is the ownership model?
On the other hand, you have the ownership model, which involves researching, purchasing, and owning your own micromobility vehicle. In this instance, you have total control over the type, model, customization, timing, and routes of your vehicle, but you need to make a larger upfront investment for it.
With ownership comes greater responsibility, as you now must incur the costs of maintenance, electricity for charging, and supplies for safety or storage. However, according to research, experts have found the cost of electricity for charging to be relatively low, approximately $20-$40 annually. And as micromobility vehicles continue to become more mainstream, it will become easier to find designated storage areas and local charging dock stations.
As with any rent versus own scenario, the benefit of ownership is owning. You receive the fullest extent of convenience and lifestyle advantages:
You will never be limited by when or where you can take your vehicle.
You will be able to afford to replace more of your daily commutes and trips for errands.
You will have total control over the maintenance, safety, and upgrades of your vehicle.
You will truly lower your carbon footprint.
3. Rent vs. buy: a cost analysis
However, the question still left on the table is how both models compare in terms of price. In order to fully understand the cost analysis of both options, let’s do a few calculations.
The two most popular electric scooter and bike rental services, Lime and Bird, function under the same cost structure that will be used as a reference. Activating a scooter costs $1 and then the rider is charged anywhere from $0.15-$0.25 per minute, regardless of whether the vehicle is moving or not. Once activated, it is also important to note that Lime and Bird scooters can travel at a maximum of 15 MPH.
Therefore, at their most efficient, a typical 5-mile commute would cost:
$1 + ($0.20 x 25 minutes (20 minute ride at 15MPH plus 5 minutes for stops)) = ~$6
Made twice a day = ~$12
Made 20 days out of the month = $240
The average cost of an e-scooter is $300 and the average cost of an e-bike is $2,800.
Therefore, while there may be a few other factors that could adjust cost, such as membership subscriptions or vehicle models, buying an e-scooter is the equivalent of purchasing 1.25 months of rentals, and buying an e-bike is the equivalent of purchasing 11.7 months of rentals.
Based on our research, we have also calculated that the cost-per-mile of a rental service is around ~$1.50, while the cost-per-mile of owning is ~$0.10.
So which is better?
The bottom line is, rental services have a much higher long-term cost-per-mile.
So if your goal is to replace your daily commute, you will be much better off purchasing your own electric micromobility vehicle. Especially if your commute is a few miles and you plan to continue making it for more than a year, you will be able to reap the full reward of the cost savings of ownership. Micromobility enthusiasts swear by making this commitment and have also found it to be cheaper and more efficient than driving, taking the bus, or riding the subway.
And if your goal is to be a leisurely rider that replaces a few trips a month with an electric micromobility, that’s fine too, but renting may be better for you.
Or, if neither of these options seems like the perfect fit, there is at least one other option you should consider. The SomEV Batteries-as-a-Service (BaaS) model seeks to strike the perfect balance between vehicle ownership and vehicle rental by allowing riders to own their vehicles while renting the batteries. Given that the battery is often the most expensive and hardest to repair component of anything electric, the BaaS model allows users to purchase their micromobility vehicle at a much lower cost (because they don't have to buy the battery), while also taking away all the hassles of battery ownership.
To learn more about SomEV and our model of “own the vehicle, rent the battery,” click here.