Spillikins # 597. Electric scooter rental in Russia – a real business or a bubble?

Hey.

The insane asylum of our world continues to work without interruption, and this disease is progressing. Following tech giants looking for a replacement for Master / Slave terms that suddenly began to remind someone of the times of slavery, other companies, for example, JPMorgan Bank, followed the same path. The bank said it would check the program codes and remove “racist terms” from them. What for? Why? Who sees these codes?

But what I liked the most was Twitter’s statement: The language we use in our codes does not reflect our values ​​as a company and does not represent the people we work for. We want to change it… From now on, the terms Master / Slave cannot be used in Twitter software products; they will be replaced by Leader / Follower. But the white and black lists will be replaced with a list of permissions and a list of prohibitions.

If you think I am joking, then I am not. These people take such epic challenges quite seriously. And they approach it with passion. The next logical step, I see, is a ban on certain words in the language, their use and even mention. After all, the offensive word for African Americans with the letter H is now called “N word”, which puts everything in its place in context. And if you want to say this word, then you say it that way within the framework of a cultural conversation, and everyone understands what was said. For the first time, we got to the wonderful world of the future, where companies and people have gone crazy, filtering the language as they want, and this takes the form of mass hysteria. It’s just a matter of the near future, when many words and terms will be banned, you simply won’t be able to type them in the same MS Word, since they will not be correct. Everything goes to this. It was inconceivable to imagine that you cannot write anything on a piece of paper, what you want. But we have created a wonderful world in which censorship becomes a part of it, and America itself shows how to implant your own way of thinking, to re-cut the consciousness of its inhabitants. This is a massive psychosis, it cannot be called anything else. And this psychosis progresses weekly, which is somewhat frightening. The feeling that our planet at one point turned into a country of fools.

But enough about the bad news, let’s touch on other topics that also do not inspire optimism, but they are directly related to technology. Go!

Content

  1. BMW and an attempt to sell car services by subscription
  2. Electric scooter rental in Moscow – Whoosh distribution
  3. Discounts on Samsung smartphones from GalaxyStore – all is gone!

BMW and an attempt to sell car services by subscription

This is BMW’s number two attempt, for the first time the company has tried to turn its cars into a permanent source of income by selling an annual subscription to Apple CarPlay. The third party service is not free for car manufacturers, and so they decided to try their luck at selling it. The subscription cost was $ 80, and the news of the cost to pay left many BMW buyers frustrated. There was so much negativity that it filled the space, they complained on all continents, as buyers of not the cheapest cars in the world suddenly realized that they wanted to be obliged to pay for every sneeze.

We are used to paying for MOT, we understand what we pay for in the service (not always and not all, but this is at least an understandable expense). But we are not ready to pay for what is already in the car, what should work. And that’s okay. Tesla’s approach, which is trying to sell just such a thing, to instill in the car market the approach of software companies, is not liked by consumers. There is a dissonance: you buy a car, and the manufacturer is still trying to sell you additional options that you have already paid for. Although it is important to make a reservation here that there are differences and they are fundamental. It’s one thing when you bought a car at full price and expect to get everything you chose for every ruble you have. Another thing is if you have a car on lease or on a loan from an automaker, you have not paid its full cost. In such cases, perhaps, the manufacturer may not give access to all the characteristics of the machine, may wait for its full payment. And then this is a question for discussion, since in the end you will still pay the full cost. But when buying for all the cost, it is unacceptable to wait for something that will not happen, for something you will have to pay for. I do not impose my point of view, but I know that a huge number of people think about the same.

BMW used the announcement of the seventh version of its on-board system in order to announce that it plans to sell certain services related to the comfort in the car by subscription. No special details were given, this can be called a careful probing of the soil, since the company has already burned itself with the paid Apple CarPlay, which had to be canceled for everyone, the service did not enter the market.

In the picture you can see the changes in the seventh version of the software, there is no point in listing them all, today we are not talking about that.

Spillikins # 597. Electric scooter rental in Russia - a real business or a bubble?

BMW’s strategy assumes that various systems are built into the car, they are hardware. And, of course, for their normal operation, software is needed, including on the driver’s smartphone. For example, we can talk about digital keys on a smartphone that can be shared with loved ones. Your phone opens the car even if it is low. Android owners can use this option for several years, in the seventh version they added support for iPhone with iOS14.

Spillikins # 597. Electric scooter rental in Russia - a real business or a bubble?

The cost of hardware for this option is pretty penny in the literal sense of the word; this is a minimum of modifications to existing systems. But for BMW, this is a convenient story, since it is possible to remotely control the operation of the system, turn it on or off, depending on whether the client has a subscription to BMW Digital Key. You can imagine that you will be given a free trial when you try these cd keys and then you can refuse them and use your regular car key. Or you can buy a subscription for a certain number of months and use such keys on your smartphone. And there is no contradiction here, because digital keys are not a required option, but rather an additional one. It would be silly if the manufacturer did not give you the keys as such, this is a basic thing that is necessary in every car. But digital keys are not basic, they are additional and provide some kind of comfort, for which they want to make people pay. And, perhaps, this can be done.

In some configurations, such keys will be free, in others they will be promoted as an additional option. But looking at the car market and the competition on it, we can say that there will clearly be manufacturers who will begin to give these penny technologies by default and thereby emphasize their offer favorably. BMW managers have clearly caught the Apple virus, they want to make customers pay for every sneeze, but do not understand how to do it beautifully. Improved maps, advanced cruise control – these things are built into the car, they are perceived as something extra. And the manufacturer may try to sell them to the client. Will such sales be successful? I doubt it. After all, we have excellent maps that are free on smartphones, all that remains is to make them so that they can be displayed on the screen in the car. This means that the manufacturer, in order to sell his solution, must make it difficult for everyone else to use the function. A sort of Apple’s approach to everything, just carried over to machines.

Can someone do a cruise control instead of a manufacturer? No, it’s just incredible. And BMW will most likely be able to sell such a function, but there are very few such things, and they can be counted on the fingers of one hand.

The personal assistant from BMW receives more or less advanced functions, for example, you can program it so that when you enter the garage, where you need to attach the key card to the barrier, a window automatically opens. Cool feature? Ten years ago, it would have been a hit, today most of the key cards are remote, or the barrier systems read the car number and automatically open the gate when they find the number in the database. The time of contact systems is gradually becoming a thing of the past, and BMW gave birth to such an option. Can you sell it? Hardly. This is a good thing for someone, it should just become a standard sentence. And this is how it turns out in everything, many of the chips are pleasant, but they are optional, you can live without them.

Why BMW and other manufacturers are looking for additional revenue in the subscription model is understandably the fiercest competition in the market, and they need to figure out how to make the extra money. But this approach does not look like a modern one, a machine is not some kind of program in which you can sell additional features as the need arises. Even in rental cars, such options will not be in demand. Remember the wonderful times when most people did not have smartphones, and in the rental offices they allowed you to take a navigator with local maps for some indefatigable money? That time has passed quickly, and we can only rejoice at this. When you rent a car, you simply connect your smartphone to the system and use your navigation (on Android it is easy and simple, with the iPhone it is not always the case, alas).

BMW’s search in this direction is understandable, but they do not cause support in me. A priori, I’m not ready to consider the car as a constructor, in which you can unlock those options that are already physically in the car. Either you give everything in the car for a certain price, or you just walk through the forest. I hate the fact that the manufacturer has already spent money on hardware, has already put it in the car, but does not give access to it until you pay for it. Change the cost of the car, do a different positioning. The cost of many chips in cars is penny, and they are sold for very real money. And this is the problem, such a business model does not evoke sympathy and support.

In theory, blocking certain functions can be interesting if you are sold an “empty” car, it costs significantly less than the same one, but filled with all the possibilities. And here the price gain will push many to buy such “empty” cars, but the business model will quickly prove to the manufacturer that it does not work – statistics on software in other areas prove that selling very cheaply will not work, and the number of transitions and subscription payments will be low. It is possible that this is an interesting model for used cars, the first owner buys the car without any options, and the subsequent buyer activates them. But this is also a very contrived scenario. At the moment, I do not see any prerequisites for some options in cars to be successfully sold by subscription, this causes rejection among buyers. Maybe my opinion is wrong and you will tell in the comments that you are ready to pay a subscription for heated seats, automatic windows and something else. Tell us about it and try to formulate what exactly you are willing to pay for a subscription in the car, what it can be. One hundred rubles a month? Three hundred? And the main question is what you can pay for.

Electric scooter rental in Moscow – Whoosh distribution

It’s amazing how often many projects are picked up on the wave of fashion and then try to adapt them in our country, one of such topics can be safely called the project of electric scooters. The takeoff of this type of urban transport, and this is transport, fell on 2018, although they appeared much earlier. On trips, I love to take scooters and ride the streets of cities, these are other impressions of the city, the opportunity to stop and look around. The cost of a trip is no lower than in a taxi, as a rule, it can be even higher. But this is about something else, about traveling as a tourist. And these scooters are always more expensive than any public transport.

Unfortunately, in the wake of the popularity of electric scooters, no one bothered to create an economic model for them, this is a very costly story in all aspects – the purchase of hundreds or even thousands of scooters, their maintenance and constant charging, the information systems that stand behind them. The economy simply does not exist here, and attempts by various companies to capture this market segment, which de facto does not exist, lead to permanent and inevitable losses. On the other hand, why not ride a scooter if someone creates such services?

There are several scooter rental services in Moscow, in 2018 Delimobil tried to become a pioneer of this market, after which it closed the direction – there is no economy, and money is being burned at such a pace that it is easier to abandon this idea altogether. There are other players, but the number of rental stations, the number of scooters is such that they simply cannot be seen.

This season, there is a player that is visible and people are seen using their scooters. There are quite a few of them in the center, they can be found in various places. The Whoosh service (pronounced “wush” in Russian, and a scooter is a wushbike) appeared last year, but the number of scooters has increased dramatically this summer. Former and current top managers of the S7 Group are behind the project.

Spillikins # 597. Electric scooter rental in Russia - a real business or a bubble?

The cost of a trip in Moscow is 5 rubles per minute, you also need to pay 50 rubles to unlock the scooter plus the cost of insurance. As a rule, scooters from Xiaomi are used, they form the basis of the Whoosh fleet (model Xiaomi Mijia M365), but there are also newer models, the variety is growing. The rental price is not the smallest, and the reliability of such scooters, more precisely, their durability, is an issue that the company will be able to study for the first time at the end of the 2020 season. In America and Europe, the durability of scooters without taking into account vandalism remains at a very low level, which negates any potential opportunity to make money on this service.

In Russia, Whoosh actively attracts third-party investors for its franchise, they need to buy scooters, connect to the Whoosh cloud platform and start servicing the scooters on their own. For a franchise, you need to pay 25-35% of royalties, which looks at least strange.

Spillikins # 597. Electric scooter rental in Russia - a real business or a bubble?Spillikins # 597. Electric scooter rental in Russia - a real business or a bubble?

Let’s try to calculate how this cost adds up. Two hundred Xiaomi Mijia M365 scooters will cost at least 5 million rubles (25 thousand rubles retail price excluding modifications from Whoosh, the base model does not have a GPS tracker, a GSM module, I also do not take into account the cost of the lock). I would venture to suggest that the price of the modified scooter will be about 30 thousand rubles, respectively, it will turn out to be 6 million rubles only for these scooters. Most likely, 2 million rubles are payments for software, franchises, and so on. A controversial issue is how quickly scooters will fail. Reading reviews for applications, you can find a sufficient number of comments that the locks are broken, something is not working. A visual inspection of the scooters on the streets of Moscow shows that they are already quite shabby.

The Whoosh site has success stories, for example, these are the figures for St. Petersburg – 200 scooters, 4 months of work, 40% margin. The staff is seven people. A total of 48 trips were made. Unfortunately, the average travel time is not given, but if you look at the statistics of similar services in Europe and America, there it is about 000 minutes. I doubt that similar indicators are achievable in our cities (banally there are no bicycle zones, you cannot go to the roadway, and on the sidewalk with pedestrians this is still a balancing act).

Knowing these figures, let’s calculate what happens to the economy in St. Petersburg. 48 trips give us 000 minutes for the 2019 season in St. Petersburg. This is 576 million 2 thousand rubles. Let’s add here 880 rubles for unlocking, this is another 50 million rubles. The total is 2 million 400 thousand rubles in four months. It sounds good? I do not think so. You need to pay seven employees, transport for collecting scooters and charging them, this is an infrastructure that cannot be free and costs money. I don’t want to count these costs in detail and carefully, but monthly, even according to the most optimistic estimates, they should amount to 5 thousand rubles for the payroll fund (I took an average of 280 thousand rubles per person, this is “dirty”, that is, the company must pay all taxes and so further, such a spherical employee will receive about 420 thousand rubles in his hands). Let’s also calculate the cost of one machine that collects scooters, the cost of electricity and premises somewhere in an industrial area, where they are charged and then delivered again. Roughly, but very optimistic, this is about 60 thousand rubles a month. This number is fantastic, but I really want to play along with the numbers of the service. The total is in the imaginary scenario about 30 thousand rubles of operating expenses during the month. How long did the service work there in 150? Four months, let’s multiply and get only operating expenses at the level of 570 million 2019 thousand rubles. Revenue from rental amounted to 2 million in four months, we subtract operating expenses and get 280 million rubles. The caps are flying up, the franchise is making great money.

But let’s remember how much scooters cost, this is the most unpleasant moment. Their cost is 6 million rubles (at a price of 30 thousand rubles per piece). A season in St. Petersburg is at most 5 – 5.5 months, the rest of the time the weather does not make skiing comfortable. Even taking into account the successful work for two seasons, the cost of scooters will be able to be recaptured, taking into account the fact that they will not break at all! Can you believe it? I can not.

We look at the numbers that are widely discussed in America’s rental companies, as they faced vandalism, breakdowns and other troubles associated with scooters. The average lifespan of a scooter, which amazed so many in 2019, was less than a month! Let’s say that people who are extremely careful about someone else’s property live in our country, there are no vandals and scooters from ordinary, non-industrial series will show miracles of vitality. Even with such fantastic introductions, the average lifespan of a scooter will not exceed one year (this is a life cycle that is considered a target for many pioneer companies in this industry, but in practice it is unattainable).

It seems that a lot of “ifs” and fantastic assumptions have accumulated. And I didn’t even count taxes and other “little things” in operating expenses. Even such a rough estimate, done on the knee, shows many weak points of such projects, they cannot work, miracles do not happen. Someone always has to pay for this holiday of life, and it seems to me that in such services in Russia it is not customers who become paying, but those who buy a franchise. It’s like in the days of the gold rush, you don’t need to wash the gold yourself and count on luck, you need to sell shovels and other tools.

Holders of a scooter rental franchise create software, modify scooters for navigation, software and communications. And this is their part of the job, they do it plus or minus normally (again an assumption, I play along with them to the fullest). And it is possible that they will come out of these projects without losses, since in this pyramid they shift their costs to the franchisee. The sharing economy is interesting because it allows you to get an inexpensive product. But this is not about the history of scooter rental, the service itself is too expensive, and even the economies of scale (purchases of scooters, software development, support service, and so on) do not allow getting a working economy here. This has not happened anywhere in the world, it is not clear to me how this can happen in Russia.

I would be very happy if you explain to me how such a franchise service can be profitable, where it comes from. At the same time, I hope that you will still be guided by the fact that the company does not work underground, pays taxes and does not charge scooters at home with its employees. Try to find a model where such a service can make money.

In the meantime, I suggest you read a couple of articles on how such services work in other countries:

Discounts on Samsung smartphones from GalaxyStore – all is gone!

Our market is so intricate that customers don’t want to get into the details. If there is a discount on certain models, then this is definitely an event started by the manufacturer himself and, of course, due to failures, failure and other unpleasant moments. Life is much more complicated and interesting, but who will try to figure it out?

In Russia, Samsung branded retail is the company’s partners who sell goods on its behalf, and these are several unrelated companies. These are separate legal entities belonging to completely different individuals, if you allow me to say such a platitude.

At the end of last week, Nosimo LLC, which owns the site galaxystore.ru, launched discounts for almost the entire line of Samsung smartphones. Here is what is written about the company on their website.

Spillikins # 597. Electric scooter rental in Russia - a real business or a bubble?

And here’s what discounts look like.

Spillikins # 597. Electric scooter rental in Russia - a real business or a bubble?Spillikins # 597. Electric scooter rental in Russia - a real business or a bubble?

Please note that even the Z Flip, which is positioned as a fashion smartphone, has undergone a discount, but the Galaxy Fold has not received a discount. There are also no discounts on accessories, TVs and other equipment, the reason is one thing – for the Samsung partner, the main sales are smartphones.

It’s easy to check that there are no such discounts anywhere else. Neither the Samsung website nor other branded stores, including online, are even close to such prices. Something similar is observed in MVideo and MTS, but prices have not been reduced for the entire line. Why did Nosimo go for such a price cut? The answer, as always, looks trite, working capital is needed, and profit does not play a role in the moment. We live in a crisis situation, and big, visible players are doing their best. Someone finances a business from another pocket, someone fixes losses (and such prices are a direct loss) and then moves on. In the second quarter of 2020, the Russian smartphone market, despite the crisis, grew year-on-year, the reason, among other things, in such sales that have been going on all this time. Many small traders bought goods in large chains, it turned out to be cheaper to buy at retail than in wholesale channels. For shoppers, this is a cool story, you get a retail device at a wholesale price and sometimes even below that cost.

And for the manufacturer? For the manufacturer, this is pain and sadness, since the pricing policy breaks down, other partners suffer and it is necessary to figure out how to compensate for these problems. Such exercises do not last long, they cannot be eternal, since there is no economy behind them. There is only a momentary solution to problems with money, loans, and so on.

The market is crazy right now, as the crisis is forcing companies to operate in a way they are not used to. And this translates into a constant stream of discounts, while they do not destroy the market for everyone. They influence it, but the market itself has become atomized to the limit. There may be two shops selling smartphones next door, both of which will sell the same models, despite the fact that the price may differ by 15-20%. The consumer, on the one hand, is smart and looks for favorable prices, on the other hand, he is lazy and buys where it is convenient for him. This saves retail. Someone destroys prices, and someone buys at them and immediately sells at a higher price. To some extent, this explains why the market has grown. Many sales of smartphones are counted twice – once, when they were sold by a large federal network, and the second time, when they were sold by a smaller player. But the number of activations of new smartphones in Russia is 15% less year-on-year. That is, the market fell, but this resale of smartphones and the method of calculating them cannot show this in any way. It turns out a complete confusion and confidence that everything is fine. This is not entirely true, and the story with Nosimo clearly proves this (they have a completely profitable, good business, they just have the same problems as retail MTS, MVideo, they are hostages of their size).

PS Have a good working week, let the bad weather pass by. A good wish, because in my area there are constant thunderstorms, wind, water floods in Moscow crossings, and they turn into pools. It has never happened before, and here are new pictures that boggle the imagination. Happy week and great mood!

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