How to launch a car rental app with lean startup methodology?
What is a vehicle rental app, and how can you use the lean startup method to get one to market ahead of the competition? Here’s our guide to creating an app for private car rental as quickly and efficiently as possible.
When you need to get somewhere but don’t have a vehicle of your own, a car rental app is a godsend.
Just open it up, say where you are and where you need to be, and you’re sorted. It’s less intrusive than getting a bus and cheaper than travelling by plane.
Plus, if you rent a car as you need it rather than buying one outright, you’re not only saving cash but helping the environment too.
If you’re planning to create your very own car rental app in the months ahead, you may be wondering what the best way to get started is. Here’s our guide to creating a car rental app that everyone wants to click on, using lean startup methodology.
The rise of the car rental app market
Many people are now renting cars as and when they need one, rather than purchasing a vehicle for full-time use. The global car rental market is now worth $86 billion and is expected to grow by 52% by 2026.
The most revenue from car rentals is generated in the United States. Given that four out of five Americans live in urban areas and the sheer vastness of the US, renting a car makes a lot of sense.
Car rental apps make it easy for customers to reserve cars on the go, wherever they are. Some apps even let you book cars within a 15-minute timeframe, perfect if you’re waiting for a bus or a train only to find it’s been cancelled.
Car rental apps are available for both iPhone and Android. Some of the key players currently on the market include:
- Alamo;
- Carngo;
- Enterprise;
- Getaround — rather than using rental fleets, this app lets people share their cars when they’re not using them;
- Hertz;
- Sixt;
- Turo — Turo advertises itself as a car-sharing marketplace;
- Virtuo;
- Zipcar.
Many travel businesses like Expedia, Kayak and Skyscanner also offer car rental as part of the range of services their mobile app provides.
You may see the competition when it comes to car rental apps and worry it’s not a profitable market to get into. The good news is that you can launch your brand new rental cars app faster and more efficiently by using lean startup methodology.
What is the lean startup?
Lean startup methodology is all about making sure your product or service gets to market in the shortest time possible. This ensures you can start making sales, build a loyal customer fanbase and launch before your competitors do.
A vital part of the lean startup method is minimum viable products or MVPs for short. From a mobile app perspective, this is when you create a basic version of your app that you can quickly get to market. You can then improve and add new features as you go, using customer feedback to help you grow.
45% of features in a software system are never used by customers. This means that if you try and launch a fully-complete version of your app, you may find you have wasted time adding content that no one wanted in the first place.
Want to find out more about the lean startup method or MVPs? Here are some of our favourite blog posts to get you started.
- How to build a minimum viable product;
- The lean startup mobile development app checklist;
- Traditional business plan or lean startup plan — which is right for you?;
- Validating your lean startup;
- What materials do you need in the lean startup?
The standard development scope vs the lean approach
As you can see, if you’re planning to launch a car rental app, the lean approach will help you get to market a lot quicker.
In fact, we estimate that using lean startup methodology could make it 40% less expensive to build and 25% faster to get to market.
And given that over one in five startups fails in their first year, every cent of your budget needs to count.
Let’s say you’ve done your market research and have come up with the features you think your target audience would like to see in your new car rental app:
Passenger app
- Two-factor authorisation;
- Customised rides;
- Quick trip matching algorithm;
- Live vehicle tracking;
- Payment gateway;
- Booking history;
- Language settings;
- Rating and review system;
- Push-notifications;
- Referral program;
- In-app chatting and calls.
Driver app
- Two-factor authorisation;
- Driver accreditation;
- Rides management;
- Order and earning history;
- Push-notifications;
- Advanced route optimisation;
- Language settings.
Admin panel
- Content management;
- Interactive dashboard;
- Driver verification;
- Passenger management;
- Driver management;
- Revenue management;
- Push-notifications;
- Geo-location boundary settings;
- Bonus payment system.
You’ve also thought of how you would like to make money from your vehicle rental app
- Commission from passengers;
- Commission from drivers;
- Surge pricing;
- In-app advertising.
As you can see, there’s a lot there!
How to determine which car rental app features you want in your MVP
With the lean startup methodology and minimum viable product approach, you want to look at every feature and see if it is essential or just ‘nice to have.’
Here’s how you can identify which features you need to keep, and which can wait for a future iteration of your vehicle rental app.
1. Know your target audience
Knowing your target audience will help you understand what problems your app needs to solve and which features they want to see.
2. Look at your competitors
If you have competitors in your industry, look at their app and see which features they have included. If you have a prospective feature and they haven’t included it, why is this the case?
3. Don’t be afraid to ‘kill your darlings’
This is a common piece of advice given to aspiring writers. Even if you love a particular character or storyline, it needs to go if it doesn’t add value. This logic also applies to your car rental app.
You may want to see a particular feature included, but the truth is, if it’s not relevant, you need to be brave and take it out. Ask your co-founders and peers what they think for a more objective opinion.
4. Think user-first
When looking at features, you need to consider them with the mindset of your target customer. This will help you see what benefit these features bring and how they can help (or hinder) the people using your app.
5. Prioritise your features
It can be helpful to prioritise your features on a list. That way, you can see which ones can be rolled out straight away and which can wait.
You can do this in many different ways, but we like the MoSCoW matrix. This helps you visualise which features are must-haves and which just aren’t a priority. The bonus of this system is that you can get your whole team involved in the scoring process.
Find out more about how the MoSCoW matrix works.
Lean approach methodology: which car rental features need to go?
So, let’s go back to our original list of features. Which ones can stay in the first version of the vehicle rental app, and which remain on the drawing board for the time being?
Here are our thoughts:
Passenger app
- Two-factor authorisation. Two-factor authentication can be hard to set up, and if not done right, it doesn’t really give any additional security. Social login is easier to implement and makes the app more convenient for users;
- Customised rides. Most customers want to travel from A-Z, so while customised rides are nice, it’s likely your customers won’t use this feature. Replace it with a simple rides feature instead;
- Quick trip matching algorithm. Keep this as is;
- Live vehicle tracking. This can be an expensive feature to implement, and it doesn’t necessarily work all of the time. Replacing it with a timer means customers can see how long they have been waiting;
- Payment gateway. Keep this as is;
- Booking history. We’d remove this entirely. If customers receive emails detailing their previous bookings, they are more likely to refer back to these;
- Language settings. We’d remove this entirely. If you’re launching in a specific country, we advise sticking to one language for simplicity. When you know more about your users, you can roll out additional languages as and when you need them;
- Rating and review system. Keep the ratings, but leave the reviews. Social proof is essential, but sticking to a simple rating feature will make it easier to launch;
- Push-notifications. Keep this as is;
- Referral program. Keep this as is — it’s an effective way to increase the number of customers that use your car rental app;
- In-app chatting and calls. Save this for a future version of the app and offer an SMS messaging service. This is not only cheaper and quicker to integrate, but you can directly see what issues customers have and the feedback they provide.
Driver app
- Two-factor authorisation. Change to social login for the reasons given above;
- Driver accreditation. Keep this as is — accreditation and verification is very important and builds trust in your app;
- Rides management. Keep this as is;
- Order and earning history. Keep this as is;
- Push-notifications. Keep this as is;
- Advanced route optimisation. Take this out. As most trips will be simple ones, this level of optimisation is not needed at this stage;
- Language settings. Remove this, for the reasons given above.
Admin panel
- Content management. Keep this as is;
- Interactive dashboard. Use third-party analytics for the time being. This will be cheaper and quicker to implement;
- Driver verification. Keep this as is;
- Passenger management. Keep this as is;
- Driver management. Keep this as is;
- Revenue management. Keep this as is;
- Push-notifications. Remove for now. While push notifications are helpful for users, it’s not something needed on this side of the process;
- Geo-location boundary settings. Remove for now. This is definitely a ‘nice to have’ and not essential for the management of your app;
- Bonus payment system. Remove for now.
Revenue model
- Commission from passengers;
- Commission from drivers;
- Surge pricing;
- In-app advertising.
When launching your app, getting the revenue model right is important.
We’d recommend keeping the commission and surge pricing in place and leaving the in-app advertising. Not only will you save time building a system and finding potential advertisers, but an initial ad-free experience may entice more customers to sign up.
So, while we have kept 52% of the original features, we have changed out 23% of them and removed 26% of them entirely. This will make your vehicle rental app quicker and cheaper to launch, and you can bring in additional features at a later date.
What team is needed for development car rental app
- 1 UI/UX Designer;
- 2 iOS developers;
- 2 Android developers;
- 1–2 Server developers;
- 1–2 Web developers;
- 1 Project/Product Manager;
- Single Quality Assurance Engineer;
- 1 Account manager.
Cost to develop car rental app
That’s not a secret that the price of development would consist of terms, rates, platforms and features. Let’s imagine you’ve decided to move with both (iOS & Android) platforms. Also, you’ve picked an ordinary company in Ukraine and picked the classical features we’ve described above. All this means that the car rental app would cost over $80`000 to launch. The lean startup allows downgrading the scope before getting on the market to make sure there is a sense in scaling. According to the feature cuts above, you would be able to launch the Car Rental app with the Lean Startup within $50`000.
In summary: the best car rental app is a lean one!
42% of startups fail because there is no market demand for their product. If you want to increase the odds of your vehicle rental app succeeding, using the lean methodology will help.
As well as creating an app that customers will want to download, an MVP also gives you something tangible to show prospective investors, meaning you’re more likely to get funding that will drive your app forward.
So, think lean, be keen, and you’ll soon have a fantastic car rental app that will be top of the download charts!
