Pedal biking has grown to become such a big part of Minnesota that Bicycling Magazine recently named Minneapolis the number one bike city in America.
It’s only fitting that new Minnesota startup Velolet (bike + lend) was founded here as a bike rental hub. Velolet connects bicycle owners — individuals and businesses — with an instantaneous global market.
The website consists of two sections: The first is the area where cyclists can list their own bikes for rent with a photo, description and daily rental price. The second is the default homepage where people can quickly search for inventory in a given location.
Considering some airlines charge up to $200 each way, the service is ideal for those who don’t want to ship their road bikes when they travel. Combined with the inconvenience of transporting (either in whole or disassembled), co founder and CEO Dan Cleary initially conceived the idea out of personal necessity. He describes the business model as common sense, saying “by putting bikes to work, we are enabling owners to better monetize their assets and by lowering the hassle and total cost, we save cyclists time and money.”
The big secret sauce for Velolet is found in the site’s ability to facilitate the whole transaction — most importantly the insurance for both the lister and renter.
The rental shop or individual decides on the exact listing price, generally ranging from $30 to $70 per day. As with many brokerage models, the lister doesn’t pay anything until he or she actually receives money from a renter, and only then does Velolet receive a cut. In addition to the insurance, Velolet holds on to the renters credit card information in case the bike is damaged or stolen.
One of the biggest challenges of the Velolet approach is the trust and confidence factor; will a renter get exactly what he or she expects? To combat this, Velolet has a rating/reviews feature built in similar to Ebay’s seller rating system. Worse case scenario, the renter can always decide not to accept the bike if it isn’t what was expected. “I don’t think this type of thing will happen often, maybe less than 1% of the time,” said Cleary.
For now, Velolet plans to continue to use word-of-mouth and grow organically, as listings are already coming from major cities throughout the country — Tucson, San Francisco, Denver, etc. . Cleary ultimately intends to establish a sales force and officially expand to other cities when the time is right. “Biking communities require a known or trusted person to champion products,” said Cleary. “I happen to be part of the biking community in Minneapolis, so it makes sense to start here.”