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Charging Startups – the Road to Profitable Micromobility?

As the electric scooter industry struggle with both profitability and public opinions about their intrusion on pedestrian space, several startups focussing on charging solutions argue that they can solve both these challenges. [1]

They all have one thing in common, which is the deployment of designated charging hubs with room for various amounts of electric scooters or bikes. There are a couple of advantages compared to business-as-usual;

  1. They offer confined and easily accessible areas to leave and charge the vehicles, meaning that, especially scooters, can be swept away from pedestrian spaces more efficiently.
  2. Gig workers can charge more vehicles simultaneously and at ‘safe places’, thus avoid crowding their living spaces, which is a risk of fire hazards.

Now, these startups charge some kind of cost for utilizing their hubs, which varies depending on their kind of service;

Charge, a company that recently launched its charging hubs in Los Angeles, charges $30 to utilize one of their hubs, while electric scooter companies generally pay $3 to $5 for every charged vehicle. So, imagine that you collect 15 scooters which pay you $5 each, giving you a total of $75. Subtracting the cost of using Charge’s hub, your net profit becomes just $45. However, according to Charge Global Head of Community, Quemuel Arroyo, “it’s not cheaper for them, but juicers say that instead of being able to charge 12 a night, they can charge 24 or more scooters per night”. So instead of earning $75 for charging 15 scooters at home (without the use of Charge’s hubs), you could earn something like $90 for charging 24 scooters after paying $30 for Charge’s services.

Swiftmile is another company whose approach is built on providing public-use sidewalk charging stations where scooter operators are charged based on usage.

Perch Mobility offers three products; the pod, the tri-pod and the suite, where unlimited charging is offered at a fixed price ranging from $25 per night for charging 14 scooters and $45 per night to charge 21 scooters.

 

Personal comments

I definitely see charging hubs as an efficient way to deal with the fact that many scooter operators face resistance from cities and governments as their products clutter the streets. Also, it seems like this could create incentives for juicers and gig workers who can make more money even though they need to pay for using the hubs (provided that they can manage to collect more scooters). In the long run, if these hubs and stations were strategically located all over cities, we might see a business model where riders are incentivized for parking at (or close to) those spots, which would help juicers and gig workers to easily collect more vehicles, meaning more profit.

We have recently seen several scooter operators shut down services in many of their markets due to underperforming businesses. Lime, for instance, had to shut down 12 of its markets and lay off some 14% of its workforce [2]. Question is, can partnerships with charging solution startups turn out profitable for these companies also? One thought is that designated spots for charging might lead to less vandalization of scooters as they become less exposed, thus increasing their longevity.

 

Written by Hampus Alfredsson, RISE.

 

Sources

1. 2020-01-17. How scooter charging startups want to make the industry more profitable.

2. 2020-01-09. E-scooter startup Lime shuts in 12 markets, lays off around 100.