As an avid cyclist, Dan Cleary didn’t like how expensive it was to ship his bike when he traveled, and he found both the quality and quantity of bikes available for rent anywhere he went on vacation to be lacking. So in February of 2010, he incorporated Velolet with the goal of doing for bike owners and would-be renters what sites like Airbnb and VBRO have done for short-term vacation rentals.
Velolet was officially launched in January 2011, allowing individual bike owners and bike shops to list their bikes for rent. The site is currently run by two people—Cleary and Ethan Otterlei, who was brought on board in April 2010—and has listings and partnerships with bike shops in the Minneapolis and Tucson markets, along with individual renters and links to shops that rent bikes in several other locations around the country.
Bike owners are able to set their own prices for daily rentals, list the hours of availability for bike pickup, and add information about the bike models and features for potential renters. Renters use Velolet’s search function to find out which bikes are available in a given area, and Velolet handles payments so that no money directly changes hands between owners and renters. That also allows Velolet to turn a profit by taking a percentage of each transaction, and settle any disputes that may arise. Though the site doesn’t currently offer optional insurance against theft or damage (it’s something that’s being looked into for the future), Velolet does have liability coverage should someone get injured while on a rented bike.
I asked Velolet’s founders about some of the challenges they faced when building the site, and the biggest issue seemed to be ensuring enough inventory was available. It’s one thing to have individual bike owners scattered throughout a given geographic area, but it’s been important for the site to get bike shops that rent entire fleets of bikes interested in the site as well.
“With bike shops specifically, one major holdback was their own presumption that the service had an upfront cost,” said Otterlei. “Our service, however, is transactional only, meaning that there are no subscriptions or contracts involved and it’s free for them to list their fleet of bikes. They only pay a small fee at the point there’s a rental, so their use of the service is profitable from the start.”
That also helps explain why Velolet is able to operate with such a lean staff. The main operations appear to include making sure the website is functioning properly, processing payments and settling occasional disputes. It also leaves Velolet somewhat vulnerable to copycats or larger services like Airbnb that might decide to offer bike rentals as an additional service down the line. But the idea itself—high-quality bikes for rent to people who want more than what they’d be able to get with Zipcar-like bike sharing services cropping up more and more often in big cities—might be niche-y enough to support a small, dedicated team without drawing too much attention from larger competitors. It stands to reason, too, that a site like Airbnb may be open to simply partnering with a service like Velolet instead of trying to handle bike rentals itself.
As for the future, Velolet has plans to expand the bike delivery services it rolled out earlier this year, as well as expanding bulk rentals for events and tours to help “solve a huge headache for event and tour promoters when participants ask for rentals,” said Otterlei. Velolet can supply custom widgets for promotion on tour and event websites that link directly to available rentals. There are iPhone and Android apps in the works as well, and the company is exploring additional rental products like wheels, wetsuits and bike racks.