Following our recent post where we discussed knee walker scooters, we decided to tackle the question of electric scooters and the popularity that they have gained. This article will dive deeper into how the fad started, what the companies that offer rental scooters are, and how the situation will progress going into the future.
So, what’s the idea?
Recently, people have observed that one of the expanding technology trends hitting the US in the last couple of years is the use of electric scooters. There are many companies like Lime, Bird, Skip, Scoot and Spin, all with a one-word brand name, and all created to offer the same service – renting electric scooters for what seems to be a very good price for the rider.
These scooter rental services have their scooters buzzing in many densely-populated cities, and you can find their vehicles on sidewalks and streets too. The idea of a business like this is that it allows people to use scooters without having to buy them. As a user, you just need to download an app, find the closest scooter to you, unlock it by scanning it’s QR code, and you’re ready to go.
What’s great about these rented scooters is that you can just leave them wherever you want in the cities they are offered. So you can go to work using one, if you’re late, and leave it outside your office. Of course, by the time you finish work chances are you won’t find it, cause somebody else already took it to another destination.
Opinions are mixed when it comes to these scooters and these startups. Some city planners say that this is the future of urban transport, along with free-to-ride bikes, whilst others are more concerned, saying that the scooters represent a dangerous hazard, especially because they can be left in dangerous places.
How did scooters become so popular?
Cars have been the main means of transportation for almost a century now, and that is especially true in cities. However, we all know that when traveling in a dense urban area, going by car is not always the fastest choice. That is why many city authorities tried to implement some form of bicycle-sharing service, and they provided bicycle lanes to offer a better option for those that are tired of driving their cars for hours every day.
These bike lanes offer a great way of getting from point A to point B if the distance isn’t too long. They offer a more eco-friendly alternative too. And this is where electric scooter companies saw the opportunity. Not everybody is ready to cycle to somewhere, but a self-powered vehicle like a scooter is both cool and efficient.
Costing less than $2, a ride with a rented scooter can save you time and money. There are many investors, especially in Silicon Valley, that are looking for the next Uber or Lyft. They are investing in Bird, Lime, and other startups, with the hope that scooters will become a worldwide sensation.
It seems like it’s almost a race between these companies, each of them competing to become the leader in a developing market. However, the competition is tough, with so many new startups appearing, and older companies like Uber and Lyft starting to employ their own technology and services in this domain.
How popular are they?
In the US, Bird, which is the largest of them all, operates its services in over 40 cities. Interestingly enough, this startup was founded by a former executive of both Uber and Lyft. Lime isn’t as successful, but it still offers its services in 23 cities.
The initial trend started back in 2017 when Bird began offering rental scooters in Santa Monica, California. Since then, scooters appeared seemingly everywhere in the big cities, taking advantage of the fact that the regulations weren’t really in place.
However, since then, people have started to realize that scooters left unattended on sidewalks or other places can cause issues, and citizens have demanded some action from the authorities. Many people complain that these scooters bring more chaos to the streets, and that is why some cities decided to cap the maximum number of scooters allowed.
You can imagine that this action leads to even more competition between brands, each trying to obtain a bigger share of that limited market. However, the situation is not as dire as it may seem. Most cities don’t have more than 1,000 scooters in them. Comparing that to some 45,000 drivers that worked in cities like San Francisco in the year 2017 alone, it seems like scooters still have some space to expand.
Furthermore, Bird already found the opportunity to expand into external markets, in France and Israel. Lime as well found a foothold in France, Spain, and Germany and it’s looking to dominate the European area. Taking into account that some of the most powerful manufacturers of electric scooters come from China, it’s no wonder that the country uses these services a lot too.
Unfortunately for these companies, none of them was able to settle in the UK, and that is due to the strict laws that the country has. However, laws can always be changed, and rented electric scooters can become a common sight in most developed and developing countries around the world.
Are they profitable?
Because you see them everywhere, you probably know that these scooters make good profits for the companies that sell or rent them. What’s important to know, however, is that these sharing services don’t actually build their scooters, but they buy them from Chinese manufacturers.
When buying a batch of scooters, each company can ask for certain customizations, and it also has the possibility to brand them. That is a win-win situation for both the manufacturer, who sells a lot of these scooters and the sharing-service company that makes money afterward.
Lime has been the company that tried to distinguish itself by making its own scooters; however, its models aren’t quite ready to hit the market. Uber is making efforts to integrate its scooter-sharing services into its app and is also starting to develop some in-house created scooters.
While investors think these businesses can be profitable, especially taking into account that Bird and Lime are classified as “unicorns” (startups that are worth more than $1 billion), some are skeptical. Some people believe this to be a short-term fad, a type of transport system that isn’t feasible in the long-run.
Whether that is the case or not, scooter rental companies aren’t worrying yet, and they are still investing more and more into acquiring more scooters and conquering more cities with them. Although the costs of maintaining such huge fleets of vehicles get bigger and bigger, so do the profits.
However, the market is a complicated one, with each company offering more or less the exact same service. People aren’t tempted to stick to a certain brand, taking into account that the prices are the same. You could install all of their apps and simply log on to see which one offers a scooter closer to you.
Uber might have the upper hand in this situation, as a scooter rental service would go well with other transportation methods varying from car rentals to bike-sharing services, or even train tickets. So, if Uber develops its strategy correctly, it will offer the whole package, allowing a person to decide what means of transportation to use with the help of a single app.
Furthermore, there is still a debate regarding how cities are going to tackle the issue of scooters, and if new laws are needed. So for now, this is a profitable business for everyone that gets into it, but the situation is not so clear in the long run. We will have to wait and see if this is the future of transport or if it’s a passing thing.
