15 Nov 18

The booming business of shared e-scooters

Between walking and driving, scooters are filling the gap of micromobility, moreover only in one year time the scooter boom is reshaping the last mile. This series of articles provides insights in this market disruptor.

The booming business of shared e-scooters

After the dockless and shared bikes, e-scooters are joining the group of micromobility, closing the gap between walking and driving. They are faster than walking, agile to skip traffic congestion, cheap and easy to drive and smaller than bikes, making them more convenient to park or store. This makes shared e-scooters a perfect last-mile solution for many, particularly in traffic-congested and traffic-restricted areas. 

The first e-bikes started showing up on the streets only in 2017, accessible via smartphone applications using a pay-as-you-go financial model. But who are they, who is behind them and how did they enter the mobility system, challenging road legislation and safety?

Who are they?

Most scooter operating companies arose as start-ups in the United States, more specifically in the area around San Francisco and start-up hub Silicon Valley. Later, most of them spread their operations out of there, but their main operating ground is still in the US, even if they are expanding. Most e-scooter sharing companies started as bike sharing companies and only recently added or even switched entirely to the scooter sharing service. 

More on the big scooter sharing companies

Who is behind them? 

Most of them started from scratch, creating a new business, surfing on the wave of rising micromobility and the shared economy. Over time, some big market players like ride hailing companies and OEMs gained interest and started acquiring some of them or creating their own scooter department.

More on the actors behind the scooter sharing business.

How did they find their way in the mobility system?

Now the scooters are growing, some questions are rising considering legislation and safety. Some cities banned the companies or put dedicated legislation in place; some scooter companies added safety policies to avoid the backlash and to raise acceptance.

More on legislation and safety issues considering scooter sharing services

Where do the scooters come from?

Most of the shared e-scooter companies work with Chinese scooter brands, but some are creating their own brand to distinguish themselves from the masses. Moreover, most of these models are actually publicly available, via Amazon for instance. When it comes to corporate scooters, ALD Automotive added e-scooters to its leasing programme during the European Mobility Week in September. 

More on e-scooter providers.

Scooter future

Shared e-scooters appeared to have shown up overnight but they are not going away overnight. The current backlash and struggle with local policy makers and other road users are often seen at growth pains. On the other hand, they have definitely a growing potential that is picked up by many players in the market, from investors to OEMs. As a result, some of these young start-ups already gained more than $1 billion in value, turning them into scooter unicorns. 

Especially since they fill in the gap of the distances which are too short to drive, but too long to walk, making them the perfect last-mile solution, which is at the same time environmentally friendly and does not add to traffic congestion. 

Nevertheless, finding a profitable long-term business model could be tough, since the fees are low, whereas costs – including vandalism repairs – can be high, and increasing competition could prevent customers from being loyal to one specific provider.

Authored by: Steven Schoefs