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A Tough Game for Electric Scooters

A few news reports about how electric scooters have been doing came out during the past weeks. VOI, the Scandinavian electric scooter sharing startup deployed last summer, has successfully secured another $30 million for its expansion in the European market [1]. Yet, some are seeing the electric scooter business as being rather close to bankruptcy [2-4].

Thanks to many cities’ open data policy, it is now easier to obtain more detailed numbers in terms of economics to understand how electric scooter sharing companies are doing. The results are somewhat displeasing. According to an analysis done on Bird’s and Lime’s fleets in Louisville, Kentucky, each scooter last on average only 28 days and earns about $65 to $75 in revenue for the company during its lifetime. Compared to the long-term target unit price of purchase $360 expressed by Bird (Bird’s scooter currently costs $551 per unit, according to the data from October 2018 [3]), each scooter still marks a loss of up to $295. The business is simply not earning money. “Every scooter company today is operating at a loss”, as stated by The Verge [4].

Despite the tough situation, Bird is digging a way out of the financial hole through new business models of using Bird Platform to encourage franchising entrepreneurs to capitalize on foreign markets, with Bird providing advice and technical support, while the entrepreneurs take care of operations and maintenance [4].

 

Personal comments

The micromobility sector is on its rise around the globe, especially after battery-powered models came into the market. Powered two-wheelers seem to be the game changer to bring on a change in the mobility sector. In the Netherlands, E-bikes sales have already overtaken bicycle sales [5].

Besides Bird-like electric scooters, company Yulu is introducing Yulu Miracle – an electric scooter sharing fleet specifically built for tackling urban mobility in India [6]. In Korea, the top mobile messenger operator Kakao Corp. has recently launched an E-bike sharing service [7]. Although there is still room to discuss how sustainable the product actually is considering the short lifespan of all dockless two-wheeler models, they definitely inspire people to rethink how they tackle their daily mobility.

 

Written by Anne Faxér, RISE Viktoria.

 

Sources

1. 2019-03-04. Electric Scooter Sharing Firm VOI Raises $30 million for European Expansion.

2. 2019-02-26. Shared Scooter Don’t Last Long.

3. 2018-10-23. Inside Bird’s Scooter Economics.

4. 2019-03-07. How Bird Plans to Blanket the World with Electric Scooters without Going Bankrupt.

5. 2019-03-02. When Will E-bike Sales Overtake Sales of Bicycles? For the Netherlands, That’s Now.

6. 2019-02-27. Bangalore’s Public Bike Sharing Initiatives (PBS) gets Yulu Miracle.

7. 2019-03-05. Defeated in Four-wheel Ride-sharing, Kakao Launches E-bike Sharing Service