Electric scooters are quickly becoming one of the most popular forms of alternative personal transportation in the world. Experts estimate the global escooter markets to see as much as a seven percent annual growth up to the year 2025! This developing trend has hit the radar of West Coast startups in the United States, and investors are pouring millions into a new breed of tech startup centered about public scooter rental services. These companies have illustrated the demand for escooters in the United States, but their approach has stirred up some controversy.
Electric scooters offer the convenience of zipping to and from one’s destinations without the physical demands of biking, the cost or expense of vehicles like cars and SUVs, or the annoyance of public transportation such as buses or subways. A new class of startup companies has leveraged the advantages of electric scooters to create an entirely new spin on electric scooter rentals. These companies have created a scooter rental service, built on a network of smartphone app connected escooters, which allows riders to pick up scooters nearest to them and leave them wherever they choose at the end of their journey. That’s to say; there’s no return center—riders just leave their rentals at their final destination! This innovative design has been a huge hit in cities such as San Francisco but has recently started to spark outrage among local citizens claiming these new services are creating a public nuisance of escooters laying all around the city.
This emerging market of electric scooter rentals is, very much so, still a developing market. Regulators are keeping a keen eye on the scene as new startups scramble to compete against each other for market share. Venture capitalists have already been intrigued by the concept outlined by this new breed of escooter service and have begun pouring millions into the markets—namely, three escooter startups.
LimeBike has received over 225 million dollars from outside investors and has quickly become one of the largest escooter rental companies in the United States. They have a dedicated team working with cities across the country to launch new programs. This company was launched around a SmartBike service but has since expanded into the escooter market. LimBike services are currently available in a handful of US cities and universities.
Bird, helmed by former Uber executive Travis VanderZanden, launched in sunny Santa Monica in an almost overnight-rollout that left many city regulators less than impressed. This company is backed by the renowned New York Tusk Ventures and is currently valued well above the $100 million mark. Many might scoff at Bird’s quickness to unroll their business in Santa Monica, but a lack of existing regulations for the emerging scooter rental market in the United States would, likely, present more thorough approaches with months of red tape and municipal hurdles.
Spin isn’t quite on par with the Venture Capital darlings LimeBike and Bird, but are quickly cultivating a nice market share of their own in San Franciso. Among this company’s founders are former denizens of Lyft and Y-Combinator. Spin utilizes smartphone apps and connected fleet management tools to allow users to locate and rent scooters and bikes without worrying about where they are returned.
Uber and Lyft tremendously disrupted the US taxi market. Users flocked to the ride-sharing services that were built on the convenience of smartphone-driven technology. The new breed of scooter rental companies such as LimeBike and Bird offers a similar service but the benefits compared to owning a scooter aren’t nearly as comparable to preceding vehicle ownership in lieu of ridesharing. Simply put—electric scooters have become so affordable to own that there’s no clear argument of the financial benefits of relying on rentals, which may end up being little more than services used by tourists. To better understand this growing debate, let’s consider some of the benefits of renting scooters compared to those of owning a scooter.
Sheer convenience is where rental companies are going to excel—allowing users to avoid all points of responsibility. No charging, no storing, and no maintenance fees. Being able to pick up a scooter nearest you, use it to travel to your destination, and then abandon it randomly along the sidewalk is devoid of nearly every aspect of responsibility that comes with ownership.
On the flipside, these services aren’t always going to guarantee proximity of a scooter. Users may find themselves walking quite a way—perhaps even forced to rely on public transportation to get them near enough—before finding an available scooter. This conundrum will work slowly improve upon wider adoption of such services but, for the foreseeable future, will likely be quite the inconvenience. When owning an electric scooter one is burdened by having to transport it everywhere—but also guaranteed of its availability.
Proper electric scooter maintenance isn’t too difficult but is still a responsibility that one must be constantly direct vigilance. Ensuring adequate tire tread, battery performance, and keeping moving parts well-lubricated are only a few of the many points of essential electric scooter maintenance. The ability to ignore all these burdens is, perhaps, another of the strongest selling points of electric scooter rental companies.
On the other hand, maintaining adequate quality among rental scooters is something that will be an Achilles heel for many companies. As fleets grow to meet growing demand and offer closer rental options, maintaining the per-scooter quality threshold will be more difficult. This issue will likely present itself as users finding faulty parts, potentially inoperable scooters, and maybe even dangerous products floating around local markets. After all, if you aren’t the one in control of a scooter’s maintenance, it is much more difficult to trust in that scooter’s safety.
Similar to the issue of scaling the maintenance of a large fleet of scooters, these new companies are likely to offer products of lesser quality than typical electric scooters. Not trash—make no mistake—just not up to par with the fastest electric scooters on the market today. For example, many of these new startups such as Bird and LimeBike describe their escooters of operating at a maximum speed of 15 miles per hour which is a bit lower than many other scooters, such as the Zoom Stryder’s 18 miles per hour top speed. Also, there are stricter weight limits on many scooters’ weight limits—such as Bird’s 200-pound threshold (including any baggage.) By comparison, the Zoom Stryder allows for a 240-pound total weight. These are just a few of the concessions one can expect from large-scales scooter rentals—much like the concessions one might expect from many other rental markets such as cars, appliances, or even furniture.
Electric scooters and bikes are quickly finding their ways into Western markets such as the United States. On the United States West Coast, particularly cities such as San Francisco and Seattle, have seen a surge in flashy scooter rental startups working to change the face of public transportation. There are few regulations on how these companies operate and local lawmakers continue to address issues as they pop up—often resulting in large fines. This new marketplace is, if nothing else, a firm wakeup call for anyone that feels electric scooters aren’t going to be a large aspect of the future of personal transportation.