Electric Scooters Are Everywhere—but Why?

Written by Brooks Canavesi on October 31, 2018. Posted in Blog, IoT

On March 29, 2018, San Francisco was invaded. Not by a foreign militia or creatures from outer space, but electric scooters. It wasn’t the first invasion of this kind. Electric scooters have already conquered just about every sidewalk in China, and it won’t take long before there isn’t any major city left where pedestrians still rule the sidewalk. While many people welcome this new method of transportation, not everyone shares the same enthusiasm about it, claiming that electric scooters shouldn’t be allowed to roam the streets at all. To understand who’s right and who’s wrong, it’s important to know what electric scooters are, where they’ve come from, and what they’re trying to accomplish.

What Are Electric Scooters?

The electric scooters in question aren’t the Razor kick scooters most millennials fondly remember from their childhood, but they are not too different either. Just imagine a rugged Razor kick scooter with an electric motor and battery. Most electric scooters weigh around 25 pounds (11 kg), and they’re typically marketed towards commuters, as opposed to children. If this sounds familiar, that’s probably because you remember the Segway, a two-wheeled, self-balancing personal transporter launched in 2002. Before it turned into one of the biggest tech failures of the last decade, Segway wanted to revolutionize personal transportation. The reasons why Segway failed are numerous, but its initial price of $4,950, awkward nature, and terrible public image all had something to do with it. But electric scooters are different. Very different. Their retail price ranges between $100 and $500, and there’s hardly anything awkward or embarrassing about riding them. Most electric scooters you see on the streets are various rebranded versions of the Xiaomi M365, a wildly popular electric scooter with minimal design, integrated kickstand, built-in LED headlight, and a top speed of 15.5 mph (25 km/h). The most important difference between the stock version of the Xiaomi M365 everyone can order online, and the rebranded versions used by electric scooter companies is the software that controls everything and allows you to pay for a ride using your smartphone. “Battery-powered scooters have been available for years, but only recently have they been outfitted with GPS trackers and wireless connectivity and arranged into on-demand fleets. These scooters are limited to 15 miles per hour, but that is still zippy enough to put a satisfying whoosh in your hair,” said Kevin Roose, a columnist for Business Day and a writer-at-large for The New York Times Magazine. “And when you’re done riding, just park it anywhere, choose ‘end ride’ on your app, take a photo to help the next rider find it and walk away.” The users don’t have to worry about charging—that’s the job of “juicers,” people who pick up electric scooters that need charging, plug them in at home, and return them back for use when they’re charged. “For many people, it’s a fun way to make extra money,” said Colin McMahon, who leads the charging program of a major electric scooter company. Depending on how low the battery is, charging one nets a juicer between $9 and $12, making it a profitable side income. Though this article is focused on electric scooters, eBikes are another mode of transportation hitting cities across the nation from many of the same companies offering electric scooters, just in a larger traditional bicycle form. eBikes typically have larger battery capacity (increasing range) and increased top speeds of 20+ miles per hour. The eBike revolution is in full effect and I plan to write another article dedicated to this topic alone. If you are interested in learning more and falling down the rabbit hole of eBikes visit Electric Bike Review for more information.

First/Last Mile Problem

Electric scooters are often touted as the best solution to the first/last mile problem, the symbolic distance between a commuter’s transit stop and their home or work. According to public transit consultant Jarrett Walker, most people in the United States claim to be comfortable walking less than ¼ mile. But because public transit is designed with the average person in mind, many people have to walk much longer distance to get from their home to the nearest transit stop and from the transit stop to their home or work. In many cases, commuters simply rule out public transit altogether and commute by car instead. The environmental impact of commuting by car is massive since the average midsize car produces around 2.6 tons of carbon dioxide emissions annually. “Even though a single transit vehicle can use more fuel than a private vehicle does, the average amount of energy used per passenger is far less than a single-occupancy vehicle, and using public transportation can help individuals lower their personal carbon footprint and reduce their transportation-related emissions,” said National Express Transit (NEXT), a worldwide leader in fixed route and paratransit solutions. “By taking up less space and reducing gridlock, buses and other public transit options can also enable more efficient traffic flows for all vehicles, which in turn helps to reduce fuel waste and emissions that come from sitting in traffic jams.” Electric scooters solve the first/last mile problem by providing a convenient way how commuters can reach the nearest transit stop and get to work without breaking a sweat. Since electric scooters encourage the use of public transit, they are beneficial for the environment even though they require regular charging. “Today, 40 percent of car trips are less than two miles long,” said Travis VanderZanden, the founder and current CEO of Bird, a scooter sharing service. “Our goal is to replace as many of those trips as possible so we can get cars off the road and curb traffic and greenhouse gas emissions.”

Major Players

There are several electric scooter companies competing for a spot on your smartphone’s home screen. The current leaders are Lime and Bird, and they’re also the only two U.S.-based scooter companies that have gone international.

Lime

Funded in January 2017, Lime crossed the $1.1 billion valuation mark just 18 months after it launched. Its service starts at 15 cents per a minute of ride on its electric scooters, which offer excellent riding comfort but are known for their sluggish braking. Lime has recently launched hundreds of its Lime-S electric scooters in Madrid, adding Spain to the growing list of European countries served by the company. “This is a big day not only for Madrid, but for the entire country,” said Alvaro Salvat, Lime’s GM of Spain. “By adding Lime-S electric scooters to residents’ mobility options, the city is reaffirming its commitment to cleaner air, safer streets and more equitable transportation solutions.”

Bird

Valued at over $2 billion, Bird is one of the fastest growing companies in the world, and many investors believe that it will eventually outvalue even Uber, which is currently estimated to be worth around $120 billion. “When you ride a Bird, it reminds you of being free,” said Bird’s CEO. “It gives you freedom. Like you have wings.” Just like Lime, Bird charges 15 cents per a minute of ride on its electric scooters, which are based on the aforementioned Xiaomi M315, a reliable scooter with a zippy feeling and grippy wheels. Bird has become infamous for its user acquisition strategy, which involves the company dumping hundreds of Bird scooters on city streets before obtaining a permit. San Francisco Supervisor Aaron Peskin, who co-wrote the bill to require scooter permits, even called the company executives “a bunch of spoiled brats” for its questionable practices.

Spin

The San Francisco-based bike-sharing company Spin uses the same Xiaomi M315 scooters for its fleet as Bird. In June 2018, Spin raised around $125 million via a blockchain-based security token offering, and the company used the money to expand its bike-sharing platform to cover the electric scooter market segment as well. Spin has recently announced that its electric scooters will be hitting Denver’s sidewalks, and the company emphasized that it wants to take a more cautious approach than Bird took in San Francisco. “Our approach is something we think a lot about,” said Spin Vice President of Business Ben Bear. “We have a lot of people from city and university backgrounds, and they think like planners.”

Goat

Goat is an up-and-coming electric scooter company based in Austin. The company’s name stands for “greatest of all time,” and it succinctly describes its long-term goal, which could be summarized as “quality over quantity.” “We’ve proven the technology and removed the biggest barrier to entry, which is the development and technology side of the business,” said GOAT CEO Michael Schramm. “We understand how to make the model profitable with few scooters and a small personal investment, so we decided to package the process and allow others the opportunity to succeed in this billion-dollar industry.”

Skip

Valued at $100 million, Skip is an electric scooter-sharing service from the creators of the Boosted board, a premium electric skateboard with a lithium battery, powerful motors and brakes, and simple wireless control. Skip started in Washington, DC, and its scooters lasts about 30 miles on a charge and can create 18 miles per hour. Skip charges a dollar per ride, and 15 cents per minute. “We’re the first permitted [dockless electric scooter] system operating anywhere” believes Sanjay Dastoor, a co-founder of Skip. “A lot of the story around dockless scooters has come from SF, and from companies that have launched without informing anyone or working with anyone. What we saw in DC was the opposite. We’re working with the cities to deploy, share data with them, and engage with the community, and we’ve seen none of the backlash that we’ve seen in SF.”

Others

Uber and Lyft want their slice of the electric scooter pie as well. Both companies have applied for permits for electric scooters in San Francisco, and Lyft has already launched 250 scooters in Denver. Even though they are late to the game, they have one massive advantage that could help them win: people already use their apps. Since all electric scooters are basically the same, and since all electric scooter companies charge more or less the same rates, it’s likely that a bulk of electric scooter users will stick to the first app they’ll use. During the TechCrunch Disrupt conference in San Francisco, Uber CEO Dara Khosrowshahi said that the company wants to become “the Amazon of transportation,” and it, just like Lyft, certainly has the infrastructure and money to do it.

Conclusion

Electric scooter companies still have many regulatory hurdles to overcome, but they are continuing to make their way to markets all over the world, successfully solving the first/last mile problem and encouraging commuters to use public transit. With so many young companies, along with from ride-hailing giants Lyft and Uber, competing with one another, it’s impossible to say who will be the next tech success story and who will fade into irrelevance. But one thing is clear even at this point: electric scooters are here to stay.

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