[this is a follow-up to my previous blog post here]
TL;DR: e-Scooters is looking to have a brighter future in the EV (e-Vehicles) market because it is 1) smaller (but fast enough), 2) portable, 3) affordable and 4) more available.
Consumers want quick, easy, reliable transportation services that just works. The need for faster/cheaper taxi alternatives, better public transportation systems and avoiding car ownership in many U.S. cities has debatably been solved by Uber and Lyft. The problem with last mile traveling is partially solved (via walking, driving, biking, Uber-ing, busing, subway-ing et al), but also very much still in the experimental and growing phases. Let’s do a deep-dive of some of the U.S.’s hottest on-demand startups trying to dominate this space.
$ Raised v. Funding v. Headcount:
Bird has been getting the hottest press as of late, with their early beginnings in Santa Monica successfully dominating the market. E-scooter’s overall potential in the U.S. EV space is strong, and both investors and multi-modal startups like Spin and Limebike realize this appetite outside of just e-bikes, forcing them to enter the market. To our knowledge, Limebike is the largest company by number of employees, and Bird is quickly catching up.
Jump was also recently acquired by Uber for what sources say was close to $200M - a move that will allow Uber to enter this market. It will be interesting to see how E-motos kick in, as Scoot –AFAIK– is the only service that operates in that space and is significantly smaller in both size and funding.
E-scooters are convenient because they’re smaller and more portable (not dependent to a dock). For a quick background of E-scooters: many believe that its rising growth was a result of the many 2-wheeled fads of our past decades. The use of the Segway in the hotel and tourism industry circa 2000s, and the small cult of fanatics leading behind it, paved way for its initial perception as a potential viable product. Cut-down the handlebar and you have Hoverboards, which were such a big phenomena dominated by younger consumers. For a while, the market felt that Hoverboards would become the next big thing due to its portability.. but it ended up drowning in hardware malfunctions that resulted in hundreds of casualties (boards exploded while used). Nonetheless, these products serve as a beachhead for consumers interested in overall 2-wheeled and portable mobility methods, and have a strong correlation to the success of options like E-scooters.
Most of these EVs (and all of e-Scooters to-date) are also dockless – the only docked last mile options we know to mind these days are Ford GoBikes and some of Zagster’s bicycles. But demand is increasingly shifting towards dockless options because it is far more convenient for riders not to rendezvous at specific docking points within cities. Portability is also possible for EVs through the ability to GPS-track, powered through its built-in energy-efficient battery cells – this is not the case for dock-required pedal bicycles, since the renter is liable for returning the bike. Though dockless EVs are very much still an experimentation at this point (as it has caused many city problems such as theft, roadblock violations et al), it is very likely to be the more efficient solution of the future.
One last note is of the differences in speed of e-scooters (max 15mph), e-bikes (max 20mph) and e-motos (max 31mph). As a result, e-scooters at this time do not require insurance or licenses (with the exception of Bird, which needs you to scan your driver’s license), as they’re slower with lower power specifications. Though this may change due to rising city concerns and still frequent accidents on roads/pedestrian walkway, it enables lower barriers to entry for e-scooters vs. the likes of E-Motos.
E-scooters are overall the most affordable EV from a consumers’ and suppliers’ standpoint. Let’s assume an average last mile ride commute takes on average 12 min. Given this, let’s breakdown the cost structure for each competing EV service:
For the consumer: an everyday round-trip commute for a month for using Bird, Limebike or Spin e-scooters would equal $2.80 per ride x 2 trips to/from home x 5 weekdays x 4 weeks = $112 per month (unless you’re on the $30/month Limebike plan which includes $100 credit, or the Spin $29/month plan for unlimited 30 min rides, so significantly cheaper). Whereas, it would cost $160 per month via Scoot. Jump and Spin e-bikes end up at a cheaper cost at $60 and $80 per month, respectively. Of course, these numbers are slightly inaccurate since we didn’t account for vehicle speed and difference of bike lane/sidewalk v. road traffic, but negligible since we’re talking short ~3 mile distances.
However, let’s let’s talk about the suppliers: we find e-scooters being cheaper from a shared service price point; Xiaomi sells each scooter on average $500 each to Spin and Bird, compared to an e-bike’s cost which can be upwards of $1-2k, and much more for e-motos. On Alibaba (China’s Amazon), for example, a minimum of 100 Xiaomi scooters can be purchased for bulks of $250 to $299 apiece. To break even if bought in bulk (and using the commute example above), Bird and Spin would need each scooter to be used ~$275 / $2.80 = 98 times, which a single commuter can complete in 98 / (2 trips to/from home x 5 weekdays x 4 weeks) = ~2.5 months. With the same math, assuming e-bikes cost $1k, it takes 1 year and 4 months for Limebike e-bikes, a whole year for Jump e-bikes and 9 months for Spin e-bikes to break even. For e-scooters, cheaper upfront vehicle costs also means overall lower and more operationally efficient costs compared to competitors.
For other interesting metrics: currently, each scooter is being rented on average 3.4x times daily (costing no more than $5 in each time frame), whereas e-bikes is being used 8/9x times daily (this helps speed up break even points for e-bike’s higher up front costs). Both EVs seem to be predominantly used for 2/3-mile trips on average over longer distances. Bird said in a memo that SF has logged over 90k scooter miles – enough to cross the country 32x times (and makes us wonder why they don’t charge per mile alongside per min). Limebike, debatably the runner-up (who has deployed over 35k scooters at this point), mentioned similar metrics.
Leveraging crowd-sourced chargers makes e-Scooters more energy efficient, and thereby more available. Of course, being electric means its battery life is finite. Thus, EVs rely on two forms of charging:
Jump bikes today have mini solar charging panels built-in to keep their bikes continuously running. However, the obvious limitation is lack of sunlight half the day. As for e-Scooters, they require charging into walls.. but in a unique way: via crowdsourcing human chargers; they build an ecosystem that acts like an Uber/Lyft <> Driver marketplace, where the the supplier (charger) is paid for his/her time for the scooters that are picked up off the street, charged and finally released back (Bird calls it “capturing birds from its nest”).
Most Birds will pay you $5 (claiming it costs less than $0.10 for 4 hours on average for your electricity), but others will pay more depending on how hard it is to locate and how far it’s from you. It’s a pretty cunning strategy to solving supply and demand economics, that would have otherwise sounded unfeasible. These are overall more efficient and creative solutions to scale EVs, and to support more consumer-ride time over stationary restrictions.
Risks / Challenges:
Couple of thoughts that come to mind in terms of problems these services will (or already are) facing:
• • •
As I mentioned before, the entire industry is still experimental at this point. But this is a truly transformational way of getting around - just like the advent of Uber and Lyft, we’re in the advent of the next generation of companies that will take over last mile transportation markets like a storm.
Sources: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 22 Crunchbase, Linkedin
I'm a Product Manager on Mobile @ Dropbox. Previously was a PM at Uber and FiscalNote, & studied CS at Stanford. I was also a KP Product Fellow, and in the past sourced for Sequoia & General Catalyst. I used to write on Medium.
Ping me email@example.com, or follow me: @dcliem – let's chat.