Fourteen months after “Bird Rides” dumped their scooters in Santa Monica, people are now dumping scooters into the water. Scooters have been extremely popular this year as scooter startups’ valuations have peaked. Both Bird and its main rival, Lime, are worth over $2 billion. However, the scooter business is not cheap at all to operate and the investors have started to worry, according to industry sources.
Scooters sharing services are perhaps not as profitable as they seem. Bird claimed a 19% gross margin a few weeks back, but the calculation excluded the extra fees associated with obtaining a permit, insurance, credit card payment, customer support and so on. Besides, problems with vandalism and abuse have cost a fortune for the scooter companies. Based on the numbers given by the famous scooter rivals Bird, Lime and Spin, the lifespan of their scooters are one to two months. Spin’s co-founder Euwyn Poon said theft and mishandling have significantly shortened the lifespan of the scooters. Spin was assuming a one-year lifespan under regular use in the beginning. However, many of the electric scooters turned out to be left in the wrong places or broken due to inappropriate use.
In addition to the failures caused by the human factor, product quality of the electric scooters is another concern. Lime had to recall 2 000 scooters in October because there were several battery-fire incidents covered in the media. Scooter startups are seeking better models that could potentially extend their fleets’ lifetime. However, the issue with vandalism remains. Companies have been working with solutions such as “lock-to” mechanics so that the scooters would be traceable and less vulnerable to theft.
Data is another valuable byproduct that interests many actors. Cities are interested in accessing the data collected from the scooters’ sensors to understand the dynamic use of the fleets, which gives them more control over the scooter operations. The scooter business is hoping to ride on the tide of the “micro-mobility revolution”, which is promising to bring us a cleaner and more sustainable future transport. How can it avoid ending up as a pile of waste-metal on landfills? 2019 will be crucial for their survival.
It seems that the scooter sharing services are now facing the same problems as the dockless bikeshare companies were troubled by. Many mobility service providers replaced their bikeshare programs with e-bikes and e-scooters because of the fact that e-scooters are way more popular than bikes . However, the problems associated with the “dockless” feature have never been resolved properly. Electric scooter sharing is unfortunately headed in the same direction, facing the same challenges of vandalism and abuse. The overall monitoring and controlling mechanism developed by the operators are, of course, crucial to the survival of the scooter sharing business. Moreover, it is perhaps a good opportunity for scooter companies to collaborate with the authorities on a better solution that can both secure the flexibility that e-scooters offer today and protect the fleets physically.
Scooter sharing services spread like wildfire during the first half of the year and slowed down a bit after summer. San Francisco’s permit system has definitely put some pressure on the business and since then, the road became bumpy. They came across the Atlantic Ocean and found that Europe had even come up with some sharing services of its own. Yet, the European cities are not easy on them. Authorities in Madrid have recently revoked the licenses of Lime, Wind and Voi . I agree that 2019 is an important year for e-scooter share, above all, to avoid falling into the same trap as dockless bikesharing services and to develop good relationships with their customers, both the cities and the end-users.
Written by Anne Faxér, RISE Viktoria.
2. 2018-10-10. Is Pedal Dockless Bike Share Going Extinct?