The economics behind Cruizador
A while ago, we published an article in which we unraveled 6 myths and realities around peer-to-peer motorcycle rental (here).
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In this article, we will review the main arguments for or against renting out your bike! And you? What do you think? Ready to be a pioneer?
The peer-to-peer motorcycle rental is a very innovative idea. Yet, the circular economy is already well established. Indeed, who has never heard of Airbnb, Sharoo or Mobility for example?
But, while the concept of moto-sharing has existed for several years, especially in the USA and it starts spreading fast, the concept is completely new in Switzerland. We are sometimes attacked on social networks by negative people on the subject. One can understand because who says new concept says lot of questions that goes with it. It is therefore time to unravel the myths and realities surrounding Cruizador and the p2p rentals in a broader sense. In this article, we will review the main arguments for or against renting ou your bike! And you what do you think? Ready to be a pioneer?
We hear this argument often and the analogies between motorcycle and human individuals, often female (we are not fond of the comparison), are legion. There is often an emotional connection with the bike, and we understand it 100%. But leave the emotional aspect aside, since it is different for everyone, and let’s look at the facts.
We have browsed extensively the website Motoscout24 to analyze the 2nd hand market in Switzerland. And the results are straightforward! In August 2019, there were 14,800+ two wheels (> 125cc) available for sale. And of these 14’000 + bikes, 55% were first registered less than 2 years ago (and 67% <5 years). So, do you change your partner every two years?
And even if you absolutely don’t want to rent out your bike, it does not mean that Cruizador is useless for you, but not as an owner but as a renter. We personally do not rent our apartments on Airbnb. But we regularly rent other people’s apartments when we are out and about. And that’s why our attitude towards Airbnb is positive. How nice would it be if you could drive a different model from time to time (i.e. a real test drive before a purchase) or a motorbike for a few days when you’re abroad?
Risk 0 does not exist. We cannot guarantee it without going for hucksters! However, safeguards have been put in place to minimize the risk. Yet, the risk of breaking an engine on the current motorcycles is limited, unless you ride it full throttle when the engine’s cold or ride it on a racetrack. But precisely, our general conditions (validated by a specialized lawyer) prohibit track racing, or off-road riding e.g. A renter who breaks the GTC would be legally bound to pay damages to the owner.
That’s why we validate all renters before authorizing them to use our services (license, passport, etc.). So we know for sure who are using our service. And if there should be a claim/damage, Cruizador provides a comprehensive insurance (included in each rental)!
Again, we put safeguards. Already, we have a copy of the renter’s documents (license, passport, etc.). If a document is missing, the user cannot rent on Cruizador. Then, when you hand over the keys you have signed a rental agreement (provided by Cruizador) that will make the renter legally and financially responsible for his actions. This contract being dated and signed, we will be able to prove, in addition to the reservation in our system, who drove which vehicle and when.
There I think we can reach a consensus. Motorbike riding is a hobby a passion that comes with a price. Owning a motorcycle, whether you ride it or not, means paying for insurance, cantonal tax, maintenance costs and often a garage to protect it from theft/vagaries of the climate … A bike is a luxury good for the owners. They are able to pay for it in the name of their passion, but often at the price of concessions in their daily lives.
We will also mention this new generation who works as freelancer or part time and has a limited income. In addition, the season is short in Switzerland (April to October in general) and few are those who use it as the main vehicle and ride all year around.
Yet, Cruizador allows you to offset some or all of these expenses, and some even generate a surplus that they can use to buy accessories or they save up for the purchase of their next bike.
During the season, we are on the road every week to meet our members. We take this opportunity to tour the motorcycle parking spots and we see very often motorcycles that do not move at all or very little. And very often, they are registered. How do we know? Some are parked outside and covered with cobwebs, leaves, moss or dust for those sheltered from the wind/rain.
However, the mechanics will tell you better than us, it’s bad to leave a motorcycle at a standstill for a long time. The engine suffers, the battery is discharged below the critical load level, the rubber tires dry and they become flat, etc. So if your bike is registered and you pay your insurance/your state tax and you do not have no time to ride it, why not letting others enjoy it whilst earning money? Your bike and your bank account will thank you 🙂
Yes and no. Certainly the process is relatively simple. We use a platform like Anibis or MotoScout24, we look for a buyer, we organize test rides and once we found the buyer and we agreed on the price, we cancel the bike registration’s document and cash in the money. Anyone who has ever experienced this will tell you. It may well be, but it can also be more complicated. Already, to optimize your chances, it will be necessary that the bike is registered so that the interested buyer can make a test ride. Then, the resale process can take time, weeks or even months. And when a buyer sees that your ad has been published a long time ago, he/she will not hesitate to use it against you in the negotiation.
Let’s go back to our initial example (MotoScout24). There are more than 14,000 vehicles on sale
The risk is that your bike drops in value and that you lose money during the process.
For example, you sell a bike with a lot of miles? You will have to be ready to negotiate. In Switzerland, we do not like high mileage … Your bike has few km but by cons was registered some (long) time ago? You may have to lower the price as well. You sell a sports bike type? The demand is low (thanks Via Secura), again, you will have to drop the price. You sell a small bike ideal to pass the license? You will deal with candidates with smaller purchasing power or who will not want to spend too much on their first bike.
In addition, all accessories or aesthetic parts paid full price to pimp your bike are bequeathed at a loss in general. They will certainly give more attraction power to your ad to differentiate you from the competition, but few buyers will buy them at the retail price.
All this to get where? At Cruizador, we cannot help you to sell your bike at a good price. But at least you can do some rentals during the (long) resale process. And if a buyer is actually buying your bike, offer him/her one or two rental days on Cruizador (offer him/her the rental if he/she buys the bike). That way he/she can get an idea and you at worst, you will have won a rental 🙂
And for all others, whether you sell it or not, Cruizador allows you to offset your ownership costs!
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