motorcycle 101 guides

Common Challenges Faced by Motorcycle Rental Businesses That You Need to Know

Common Challenges Faced by Motorcycle Rental Businesses That You Need to Know

For motorcycle enthusiasts, running a motorcycle rental service is the best business idea available since they are at least familiar with the products. The demand for motorcycle rentals has been growing worldwide due to an increase in solo road trips, motorcycle tourism, and fuel prices. Even many U.S. riders prefer renting a motorcycle to reach a tourist destination or travel new motorcycle rides they have never explored before.


In recent years, the motorcycle rental industry has changed drastically. Initially, motorcycle rental businesses were simple as it was a simple process for customers to rent a two-wheeler at a fixed rental rate.


However, even modern small-scale U.S.-based motorcycle rental businesses have to purchase the latest models to attract more customers, maintain each motorcycle to keep them from losing their retail value, and manage administrative tasks and finances.


For a motorcycle rental business to be successful, it must be able to fulfill the following tasks:

  • Maintaining inventory
  • Finding the right motorcycle supplier
  • Managing paperwork, such as rental contracts,insurance policies, etc.
  • Managing invoices and taxes
  • Keeping track of contract renewals
  • Hiring employees at a competitive rate to reduce employee turnover

The success of your motorcycle rental business depends on how well you manage to tackle and overcome all challenges that your business will face.


Let’s look at the potential problems that you might face while running a new motorcycle rental business

1. Surging Demand for Motorcycle Rentals - An Opportunity or Challenge?

High demand for motorcycle rentals allows rental services to generate more revenue, earn more profits, expand their services, attract more clients, and increase their capacity to meet supply and demand, advertise their businesses, and build their reputation in the industry.


However, high demand for motorcycle rentals can come with its own challenges.

1.1 Competition

High demand for motorcycle rentals has resulted in more motorcycle rental services being built. Consequently, any businesses new to the industry would have a tough time dealing with competition. On the other hand, older rental businesses must improve their services to ensure they do not lose customers.

1.2 Finding a Supplier

Most motorcycle rental companies approach manufacturers when looking for motorcycles to add to their fleets, while other companies prefer to purchase their motorcycles from a supplier. During this phase, many rental businesses have difficulty finding a willing supplier able to provide the popular motorcycles that will attract customers.


Many owners may be forced to purchase used or poorly maintained motorcycles at a cheap rate due to a lack of funds. Typically, they aim to rent out motorcycles until they get a return on the money they invested. But what they fail to consider is that motorcycles in poor condition will not have a high resale value.


Therefore, it is best to purchase motorcycles from importers or manufacturers so you do not waste precious time and money.

1.3 Managing Employees

If you are improving your business’s capacity to meet the surge in demand and attract more customers, you will need to have a team of professionals on board.


Having extra employees will help your business grow as multiple opinions will help when coming up with creative ways to market, advertise, and introduce new services. However, keeping employees can be difficult as they might get a better offer from your competitors. To keep the minimum number of employees necessary to keep your business running, you may need to provide better incentives, a competitive salary, and a thriving work environment.

1.4 Self-Care

Many owners invest all their money, energy, and time in maintaining their businesses. But as a result, they end up neglecting their personal finances, downgrading their lifestyle so they can focus more on growing their businesses. But if they fail to establish a profitable enterprise, this can lead to a stressful financial situation with no contingency plans.

1.5 Creating Smooth Systems for Sales Tax

If your business has become a renowned brand in your area and demand for your products is growing, it is natural to want to establish other motorcycle rental services in other states.


Once your business starts expanding to other states, you will have to charge sales tax. To manage finances, you need to develop a procedure for managing profits earned from multiple establishments.

2. Going the E-Commerce Route

Online motorcycle rental platforms like Riders Share have become popular in recent years due to most motorcyclists preferring the convenience of renting motorcycles from the comfort of home.


Online motorcycle rental services have been steadily taking over the industry, making it difficult for traditional rental businesses to stay in business. Hertz Ride, MotoQuest, EagleRider, and other well-known rental services now have both an on-site location and online rental service.


The most difficult challenge owners face when putting their motorcycle rental businesses online is finding the right websites or management software to track their metrics, manage contracts, organize inventory, and handle transactions and billing processes.


Bike Rental Manager, NetSuite Rental Management, Rentrax, Acumatica, and similar management software can help you create an online financial management system to help make more sales and reach more clients.

3. Challenges of Staying Traditional

Many motorcycle rental business owners argue it is better to run a traditional business and use on-location software for financial management. Though this is an option, it is more expensive to use an on-location system to manage your rental assets for the following reasons:

  • You must own permits and licenses or have subscriptions for on-location management software.
  • You would need to teach your staff how to use the software
  • Other issues include customization, installation, data storage, and ad integration. 

You will also have to pay monthly fees for consultations, training, updates, improved business features, and backups.


Therefore, an online rental business management solution is better for growing your business and managing finances. Software specifically made to manage rental equipment, like the EZREntOut and NetSuite Rental Management Series, will help you access and organize statistics, data, and other information required to run a business efficiently.

4. Organizing Inventory

Knowing the right number of rentals to keep in your inventory is crucial to the success of a motorcycle rental business. Keeping track of the statistics related to your inventory will help you evaluate which motorcycles are rented out more frequently and earn more revenue within a given time frame. If you fail to maintain your fleet based on what most of your customers want, your business may face the following challenges:

  1. Motorcycle fleets are expensive to maintain. Having too many motorcycles that are unused could reduce cash flow. Cash shortage leads to high-interest loans that could put more financial pressure on your business.
  2. In response to financial losses, most rental businesses give their less popular motorcycles discounted daily rental prices, but this strategy hardly ever turns over a profit. 
  3. Money spent maintaining obsolete motorcycles in the fleet means that there will not be enough money left to purchase and add the latest models to your inventory.
  4. Unused and old motorcycles in your inventory tend to depreciate in value, causing great financial loss to your business.
  5. Paying for storage space to store obsolete motorcycles costs money and leaves no extra room for newer products.

To deal with this problem, you would have to upgrade to efficient management software that will help you organize your inventory, show which motorcycles bring in the most revenue, and determine your customers’ preferences.

5. Changing Marketing Trends

With more businesses going online, successful businesses are able to sell their products through digital marketing and advertising to their target audience.


Automated marketing allows you to expand your business’s network, reaching out to new customers and helping increase revenue. It helps that automated marketing strategies are less expensive and tend to generate more profit if done correctly.

6. Manual Billing Methods

For a growing motorcycle rental business, it can be difficult to keep track of every motorcycle rented out to different customers at different daily rates, insurance policies, rental periods, and locations.


Unfortunately, some rental businesses fail to manage their billing process because they do not invest in reliable automated billing software systems.


Automated billing software systems can handle multiple bills, verify and process credit cards, and keep track of your scheduled bills.


In a motorcycle rental business, there is no such thing as a fixed bill. Your customer may have traveled on a motorcycle farther than agreed, failed to refill the motorcycle’s fuel tank, or failed to return the motorcycle on the agreed return date. For such cases, your billing system must be able to include extra charges. But if your company’s billing system cannot manage billing information regardless of the situation, your business can suffer huge financial losses.

7. Managing Invoice & Rental Contacts

As discussed in the inventory section, cash flow determines how successful your motorcycle rental business will be. Your motorcycle rental business’s cash flow can suffer due to unpaid invoices, missed credit deadlines, accruing debt and interest, and mismanaged inventories.


To deal with this problem, you must have a reliable billing and rental invoicing system. An efficient billing and rental invoicing system will help you meet deadlines, track your inventory, automate your invoicing and balance sheet, and allow you to renew, cancel, or start a new rental contract.

8. Investing in a High-Liability Niche

Investing in a motorcycle rental business can be risky, especially for owners specializing in a dangerous niche. For example, if you rent out a Can-Am Spyder - a motorcycle well-known for its safety feature - you won’t have to worry about liability as much as a rental service that rents out only super sports motorcycles or dirt bikes.


All motorcycle rental businesses have insurance coverage for injured renters because even while wearing all the necessary safety gear, aggressive motorcycling on open roads can result in accidents. An ill-maintained motorcycle rental can also be dangerous to the safety of renters, so your business needs to have liability protection available.


When a customer is signing a rental agreement, make sure the customer fully understands the risks of operating a motorcycle rental. Also, discuss the liability requirements in full detail, so that your company will not get sued for negligence if the renter gets into an accident.


It is recommended that you buy general liability coverage that will protect your company in the following scenarios:

  1. Physical Injury
  2. Lawsuits
  3. Medical Expense
  4. Damage to Motorcycle

8.1 Paperwork & Hiring

To qualify for proper insurance, you will have to fill out and process a lot of paperwork. It is best to hire a professional with experience handling insurance policies and related documentation. Another approach would be to automate these policies and paperwork using motorcycle rental software.

9. Security Issues

Not all renters that approach your motorcycle rental service are genuine. Sometimes customers rent a motorcycle and then sell it in another state after changing the license plate. To prevent such incidents and heavy financial loss, you need to have a system to run a background check on renters. Moreover, your motorcycle rental should have an undetectable GPS tracking system.


Sometimes a renter is not involved in a theft, but someone else might try to steal your vehicle. With a hidden GPS tracking system, you would be able to locate your stolen motorcycle. Thus, it is best to ask your software provider to add such features to improve security.

10. Takeaway

These challenges you might encounter while running a motorcycle rental business may seem a bit too much to handle at first. However, they can be easily handled if you create a thorough business plan that deals with each one accordingly. Once your business is up and running, all you need to do is develop efficient financial, billing, and management systems that will help you run your business smoothly, satisfy customers and meet your financial goals.

Reading next

Here’s Why Motorcycle Trailer Rentals Are For You - An Essential Guide for Riders
Top 6 Motorcycle Rental Services in the USA

Leave a comment

All comments are moderated before being published.

This site is protected by hCaptcha and the hCaptcha Privacy Policy and Terms of Service apply.