EVmo: Recession May Boost Demand for Ridesharing Services, Rental Vehicles

An economic downturn may boost the demand for both ridesharing services and the vehicles that some of the gig economy drivers rent, according to executives at rental vehicle provider EVmo.

Responding to a question from an analyst about how the firm might fare during a recession, company executives said that the vehicles they rent to gig economy drivers and companies will be in demand as drivers seek employment and as passengers try to reduce the number of miles they put on their vehicles.

“In some ways, I think that that helps us,” EVmo Chief Financial Officer Ryan Saathoff said Thursday (May 19) during the company’s quarterly earnings call. “It raises demand — people are looking to not drive their vehicle as much, they’re looking to car share and they’re looking to find employment, if we have an unemployment issue that comes up.”

Providing the Means to Work and Earn

As a fleet operator, EVmo owns the vehicles and allows drivers to rent a vehicle that is insured, maintained and available at a fair price, EVmo CEO Stephen Sanchez said during the call.

That distinguishes the company from peer-to-peer car-sharing platforms and enables it to offer drivers vehicles that they need to work and to earn, Sanchez said.

“We are somewhat buffered against some of those economic headwinds in the fact that people still need to care for their families, and we give them the means by which to do that,” Sanchez said.

Transitioning to Electric Vehicles, Hybrids

As with other operators of commercial fleets, EVmo is also transitioning its fleet to electric vehicles (EVs) and hybrids. Together, those vehicles now make up 34% of the company’s fleet.

“Even as fuel prices continue to stay high, the demand for rideshare stays high,” Saathoff said.

By adding EV vehicles to its fleet and doing so when the supply chain is compressed, the company has vehicles available for customers to rent and offers an alternative to internal combustion engine-powered vehicles.

“I think our demand actually potentially accelerates, at best; at worst, I think we stay relatively neutral through the process,” Saathoff said.

At present, renting vehicles to gig economy drivers is a total addressable market estimated at between 300,000 and 500,000 vehicles, Sanchez said during the call.

Read more: Gig Economy Drivers Rent More Than 300,000 Vehicles

Offering vehicles to gig economy drivers and companies in both the rideshare and last-mile delivery spaces, EVmo is active in seven metropolitan areas across the United States and has a fleet of about 635 vehicles. It expects to have 2,000 vehicles by the end of 2022 and 4,000 vehicles by the end of 2023.

“As we continue our transition to all electric vehicles, we believe we are in the forefront of the new era in commercial transportation, and that our early presence in this industry will further distinguish us from a competitive standpoint,” Sanchez said.