Business Unusual

Electric scooters - transport revolution or fad? It's probably both

Stop me if you have heard this story before. An innovative ride-sharing company seeks to revolutionise the transport industry using an app based product that is released into markets with little or no permission to operate. It generates media coverage, devotees and haters in a short space of time while running at a loss and having its value rise to unicorn status.

If not, you could apply it to the electric scooter start-ups that in the last 12 months have created a stir in the US and are spreading across Europe.

The companies are new, but the idea is not.

Humans have created and evolved means of transport to match the need. Animals were the first to spare us walking. We used the wind for sailing; we then built steam engines which changed transportation on land and sea. With fuel engines, we could get more power with less weight and could take to the air.

Planes, ships and trains cover long distances. Cars are the gap for shorter trips and bicycles cater for even shorter trips.

Back in 2001, one man wondered if he could create a powered transport option that was for trips of only a few kilometres and would be the bridge between driving and walking - the Segway. Dean Kamen was featured on Business Unusual last year in recognition of all his inventions although the Segway was ahead of its time, expensive and not cool.

Kamen sold the company to UK businessman Jimi Heselden in 2009, but he died when his Segway left the path he was on went over a cliff. It was then sold to a US company Summit Strategic Investments in 2013. CEO Roger Brown shifted focus to marketing the Segway to law enforcement, tour companies and the expanding Chinese market.

After increased competition by Chinese rival Ninebot, they first sought to fight them for patent infringements before selling the company to Ninebot in 2015.

Ninebot still makes Segway-style two-wheel self-balancing electric personal transporters, but it is the Segway ES range that is creating the stir. It is an electric scooter and while perhaps not the coolest thing to ride, offers a lot of fun for anyone who does.

Bird, Lime, Spin and Skip all offer the scooters for hire via an app to rent for about R15 to access and R1 a minute to ride. The app will tell you where to find them and where you can park them, although they are often parked anywhere.

In the last year, cities across the US and Europe have seen the scooters appear on the streets. In many locations, they are not officially permitted, and many users ride them where they are not allowed like bike lanes and pavements. Despite that, most of the start-ups have reported over a million trips and created a new form of work. "Chargers" refer to people paid to collect the scooters, charge and return them to popular areas for a fee.

The Ninebot Segway Electric Scooter

So, a good news story of a technology whose time had come matched with a dose of disruption and mobile app innovation. Yes, although the spike in injuries, accidents and run-ins with city officials suggest it is not quite the match made in heaven. Some cities have embraced it and are doing better than others. London, which notably withdrew Uber’s licence to operate saw the scooters arriving in November 2018 but kept them to a specific park to not get banned outright.

If cities do begin to plan both access and rules for how the scooters can operate there could well be a shift coming. One of the most prominent companies, Bird has a CEO that is a former senior executive with Lyft and Uber. Another company, Spin, was recently acquired by Ford, possibly noting that car sales for city dwellers will continue to decline while personal transport could be the next thing. Uber has its own electric bike offering called Jump and GM plans to launch their own electric bikes in 2019.

The scooters are available in SA too via direct ownership and cost about R15 000. Time will tell if the sharing-economy-personal-transport-boom was a revolution or just another fad.

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