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Electric scooters may not be around for long…

Electric scooters may not be around for long…


– Electric scooters! Love them or hate them, they’re everywhere now. Shareable electric scooters can be found in most American cities. And they’re quickly
expanding around the world to cities like Paris,
Vienna, Madrid, and Tel Aviv. Scooter-sharing has been one
of the biggest tech crazes of the last year with venture capitalists pouring more than $1 billion into the startups,
but there’s a dark side to scooter-sharing. You see, the fundamental
numbers don’t really add up because the scooters don’t
bring in enough money to cover their cost. Ride-sharing is wildly unsustainable, and if the business continues
on this current path, it’s entirely possible that these scooters will end up in a mass graveyard, like those viral photos from China. But to understand the nuts
and bolts of scooter-sharing, we really need to look at the big picture. (techno music) – Electric scooters like this one have flooded the streets of
Santa Monica in recent months. – The scooter phenomenon got
its start in September 2017, when a company called Bird began dumping electric scooters on the streets and sidewalks of Santa Monica, California. A bike-share company, Lime, followed suit, dropping its scooters in San Francisco, and the race was off. People complained about blocked sidewalks and scofflaw riders, but the scooters were cheap to use — typically costing a dollar to unlock and then 15 cents for
every minute of riding. And wouldn’t you know it, they turned out to be really popular — racking up millions of rides and earning Bird, Lime,
and their competitors tens of millions of dollars in revenue. The startups used the rising popularity to rake in an additional
hundreds of millions of dollars in investment cash. And that’s when scooters really started to appear everywhere you look. But despite all that cash, it’s really hard to turn a profit when you look at the unit economics. That’s how much revenue each individual scooter brings in for the company. And the most important number to consider is the life span of each scooter. The more trips and miles a single scooter can cover, the better it is for the scooter company, which have to recoup
the cost of each vehicle before they can start making money. In October 2018, it was reported that
Bird was spending $551 to purchase each scooter with the goal of reducing
that cost to $360. That meant Bird needed five rides a day for a little over five months to recoup the initial cost of the scooter. But the early data suggests that these scooters aren’t
lasting five months. They’re not even lasting for two months. In fact, the scooter
companies would be lucky if these things last longer than 30 days. Now, Quartz crunched the numbers from Louisville, Kentucky, and found the average lifespan of a scooter was only 28.8 days, doing an average of three
and a half rides per day. At these rates, Bird only recouped $67 on the cost of the average scooter. In other words, it loses a whopping $293 per scooter. That’s not even factoring
in a host of other costs, like taxes and fees. Now, Bird disputes this analysis, claiming that scooters get moved around, sometimes to different cities, and that just because a
scooter lasted in Louisville for 28 days doesn’t mean that
that’s its entire lifespan. And it’s certainly true
that the average lifespan can vary depending on the terrain, the city, and the amount of use. But it’s also true that these things take a lot of damage. They get knocked over,
thrown into rivers and lakes, they get tossed up into trees, they even get set on fire! The vandalization of scooters
has become a viral trend. Last October, scooter haters
dumped 60 electric scooters in a lake in Oakland, California. Now, part of the reason
they’re breaking so fast is that these scooters were never meant to be used this way. The electric scooters that Bird deployed, at least initially, were
rebranded Xiaomi devices intended for use by a single owner with a weight limit of 200 pounds, in mild weather, on flat surfaces. So when the rider’s a little heavier, or the ground is a little wetter, things start to break. Even the guy making tons of money off of scooters has his doubts. A top executive at Segway-Ninebot, which sells its scooters to
the ride-sharing companies, questioned in a recent interview whether scooter-sharing
was a sustainable business. So how can scooter-sharing startups turn these grim numbers around? Well, thanks to the millions of dollars pumped into electric scooter companies by venture capitalists,
they may not have to. At least, not right away. Investors are betting that these companies will be worth billions of dollars once they figure out how to turn a profit. And as long as they think that, they’ll be willing to pour
more money into making it work. The scooter companies say they
want to become profitable, or at least stop losing so much money. The CEO of Bird told me that in order for his company to eventually break even, the scooters will need to
increase their lifespan to six months. That’s a lot longer than 28 days. Their plan is to build a better scooter, one that’s more durable
and longer-lasting. And they’re starting to do that. Bird rolled out its new, more rugged, Bird Zero scooter recently, which is manufactured in collaboration with a Chinese company called Okai. Lime did the same with
its new Gen 3 scooter, and there are other ideas in the works, such as built-in locking mechanisms and field-swappable batteries that can help reduce
the daily wear and tear on these scooters. Will these new, more rugged
scooters last longer? Probably, but they’ll unquestionably be more expensive to manufacture, which means they’ll need to
stay in operation even longer before the companies can
begin to recoup their costs. It’s a Catch-22, and
it’s not entirely clear that the scooter
startups have a solution. And in the end, it may
not just be the scooters, but the companies themselves that end up having shortened lifespans. Thanks for watching and if
you’re riding a scooter, please be safe and wear a helmet. Like and subscribe, and please watch more on YouTube.com/TheVerge.

100 comments

I wish that the areas in which these scooters are suppose to be ridden were friendlier to alternative transport ion. Most cities feel super unsafe to ride around because there’s not enough bike lanes or space for riding.

Dump scooters in a lake. Genius! God bless the great USA. What would the world do without them?

3:10 You simply can't compare the USA to the rest of the world. I can't imagine something like this happening in Germany.

I think you got the math 100% wrong on scooters.
2:14
Price = 500 USD
5 months * 30 * 5 rides/day = 750 rides. Minimum fare is 1$ + 15cent
Average fare is ~4$
So that would be about 750 *4 = 3000 $ revenue
$3000 $ – 500 USD cost = 2500 NET PROFIT after 5 months. That's insanely profitable. That's why they grow so fast.

That's really interesting. We thought we got us some scooters and calculated they were 10$ per hour and since we wanted to rent them for a few hours it would have been cheaper to rent a bike or get an Uber (depending on the amount of fresh air and workout we wanted). So I thought they must make lots of money because they are not cheap, they outsource the charging to users and so on. Obviously that was wrong.
Anyway I'm still not sold on the concept. I mean I'd like it if there was one of these fully charged anywhere I am and need one, but I don't want them to clutter the streets. Also I don't want to carry one around all the time in case I feel like riding it.I have no idea how this is this solved.

End of the day, ‘it’s not the (scooter), it’s the (rider)’ – that results in risky behaviour during riding and lazy habit when parking

i see people with electric scooters daily in Sofia, Bulgaria. Not rental tho. Personal scooters. i'm considering buying one.

You don't have to rent it you can buy it if you really want it and pay for it in installments, in the UK their is a grey area with them but it's packed with them especially in London

With all use and abuse these scooters go through it’s a gamble to trust the brakes will work or something will malfunction. Yeah no thanks.

The very reason they get vandalized is people (mostly kids and teens, as well as immature adults) is there is a upward spiral of people with NO respect for property. Instead of moving the scooters or ignoring them they rather vandalize because they have this pent up anger inside of themselves.

Americans dump electric scooters in a lake??? As a protest?? Why. What did the normal Americans say about that?

Only idiots will go for scooter sharing in US. Ya the startups are giving cheap ride to snook gullible investors to pump in money.

This is the solution to the last mile problem public transportation has and people are destroying it for shits and giggles.

Because throwing scooters in a lake doesn't pollute at all. American retardation at it's finest. It's not the scooter's fault that they don't last, it's the American retardation again. They last much longer here in Norway or Stockholm where I am on vacation right now.

Verge don't be so hard on them LOL. If my new car needs maintenance after 1 month, that doesn't mean that its the lifespan of the car.

what about the fact that they pay people to charge the scooters could that mean that they aren't losing that much money??

Also consider that in the eastern half of the United States you basically have a 6 month window to rent scooters due to winter and even then it's raining often.

I do not understand your calculation at 2:35
Generating 2.32 Dollars per ride or all 3.5 rides together?! If it is per ride then you will have a total revenue per Scooter of 234 (=28.8*3.5*2.32) Dollars! But you come to 67 Dollars only! That means you argue that all 3.5 rides TOGETHER make a revenue of 2.32 Dollars (28.8*3.5=67). But that is impossible as one ride would cost only 66ct (2.32/3.5=0.66) and – as you mentioned – alone starting a scooter-ride costs the customer 1 Dollar. So is your calculation wrong or have I made something wrong?

Your math seems seriously flawed.. if one ride is 10 bucks, thats 1 hour, at 5 rides per day thats $50 per day. Meaning a scooter pays for itself in 10 days even if you’re using the larger $500 figure mentioned.. how in the WORLD do you get 5 months?!?!?? These scooters at $0.15 / min should be RAKING in the cash!! And its now $0.2 / min today by the way… curious how you reached those values

Most wheelchair bound people have power chairs. Not easy to maneuver them to begin with. Try getting around scooter riders who aren't supposed to be on the sidewalk and scooters and bikes thrown across the sidewalk. Unsightly nuisances and now they've lobbied to not require helmets amidst a class action suit over injuries!

Read a review stating that the owner of a Xiaomi m365 had lasted two years and done over a 1000km- with no problems. If you look after your kit it looks after you. Nothing a regular technical service can't sort out.

Since Finland got electric scooters a while ago theres now 4 different e scooter companies and everyone rides and I have rode them too and havent seen any scooter in a bad condition and its good because in Finland theres not alot of people so you can freely ride the streets without anyone blocking so not a lot of crashes.

There seems to be a wrong number somewhere. My buddy has been using a scooter like that for over a year and changed its tires just now (they were included with the purchase).

I really doubt that bird and lime are paying what you reported you can buy a Xiomia on Amazon for 399 and a clone four 299. Just some more bad reporting by Verge get the facts straight but you guys never do thumbs down

The economics of scooters might begin to work out more favorably once consumers realize that they can use the shipping containers as coffins. – j q t –

The Limes and the Birds aren't going away. The design will improve, the components will be made more durable and easier to repair, and the supply chain will become even more efficient. Once they're established in a given market, there will either be a price point at which they break even, or they will be withdrawn from that market. There is also an angle Mr. Hawkins didn't mention, and that is their capacity to collect data, which we now know has a great deal of value in itself.

Funny story. Because a was a scooter was left in a public park, in the middle of a walkway for 4 days, the locals started using the scooter's basket for tossing their dog poop bags. Not me of course. I'm into iguanas.

You completely miss the point of their business model. Do you know the value of having our App on your mobile phone?

Not all scooter riders are bad. There's always that few who are idiots. Make it look bad for scooters.
Cars and trucks. Motorcycles drivers are the same too. Good and bad drivers.
Use common sense. Ride and drive safely responsibly.

I highly doubt a company (eg. Bird or Lime) are buying Xiaomi rebranded scooters in BULK for more than the retail price of ~$500… I think your numbers are off

greetings from vienna lol haven´t expected to get called in one sentence with the us and paris lol
btw i and not using the sharingdevices, because i have my own m365 (with over 1500km on it)

@2:08 those scooters don't cost $500.each one cost like $50 or less from China. The most you buy in bulk the less it becomes.

they just need to try this business in countries where actual educated people live,rather than aMeriCa – yee haw

More reliable electric scooters needed. They still pump them out where quality is poor and break easy. I want to get one but bad reviews on them.

the one month stat your whole video is based on is probably wrong! if some companies go bust then the ones left will get more rides per day also.

scooter danger on footpath = The Tragedy of the Commons: when a previously civilly shared resource (eg footpath) is destroyed by by self-interest or profit seeking

Electric scooters will be around for a long time, just not scooter sharing apps. Just like how internet cafes failed, but the internet is here to stay. People are buying their own.

What can I do because in my country (Malta) have made a new law that I need to be 18 and have a driving licence for my electric scooter. Please help.

Your video title is inaccurate. RIDE SHARE scooters may not be around for long. Electric scooters are here to stay – just privately owned ones.

The company owners are making money while the business loses money. They pay themselfs and employees but a turn around revenue is another matter. Vandalism is only a small hit to the profit line compared to abuse of scooters by riders. The issue is no control over the company making them responsible for damage to the community. Bird flooded the streets at first with no permits obtains from the city. Started a bad rep for the industry, Lyme did get permits. But how do you get the customers to be considerate of the product, and the community…this is the real issues. Cities like Reno Nevada band the company's till a solution could be arrived at. Once again there are people who will ruin it for everyone. I think the idea is great for the environment and community if only certain issues can be dealt with.
But perhaps these companies are more interested in making their money over doing right for the communities they are making in.
If this is so…the industry will end.

I work for a scooter company. We drop 60 brand new scooter we are lucky if we get 50 back. They need a better gps and coding so people can’t bypass them and make them personal scooters. Even the new scooter are getting stolen and made into personal.

I can't believe VC are investing in this… They are the same people who invested in the dotcom bubble. They need to be taught some simple accounting skills.

In japan can easily last over 6 months or even 1 year, but people here are careless, they use it and dump it anywhere they get off it. I have seen people get off scooter and not even use the kick stand, don’t even talk about to park it, Just lay it down on the ground blocking side walk, and yes, it happen here in San Francisco.

Sign Up for Voi or Tier scooters with these codes and get free first trip.

Try this link for a free 2,5 Voi credits. Adds about 15 min of driving @t

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This is a great idea. Just bought a boosted board mini x and the electric types of transport are becoming more and more popular. Better for the environment, faster, and fun. I do not know why people hate so much on the electric scooters. Throwing them in lakes and such is unbelievable.

First of all, this is renting, not sharing. The sharing economy is made of services offered at cost or with no exchange of money (like BlaBlaCar). Where there's profit-making there is no sharing. Stop using the word "sharing" for pure and simple capitalist profit-making activities.

Secondly, it's scooter rental that may not be around for long, not scooters themselves. By the looks of it it will be economical and better for the environment if people get their own scooters and take care of them and make them last. And if they ride them more slowly and carefully, at close to pedestrian speeds, especially in busy urban environments.

I imagine the battery , esc and wheel hub to be the most expensive parts. Maby a scooter only lasts a month but then they pull the electronics and put it in a new shell, replace some wheel bearings and its good for another month.. the battery should easily last a few years .

I dont think everything can last for a lonng time not unless we really take care of it. E Scooters and e bikes that we see on the streets are meant be broken due to the fact people uses it with no remorse so i guess cannot last for more than a year. This is a good research. What can you say about people who buy their own e scooters??

Buy your own Scooter. Use it properly, not where people walk…
Got mine in sale for 262 Euros (SkateFlash 2.0).
It gets to 40km/h.
Takes me around with ease and feels great to ride (I live in Portugal).
I lock mine in bike parkings with a bike lock.

Go like this and you will have no problem. Enjoy the freedom an Eletric scooter provides. Dont be a hater without even trying one by yourself ^-^

Comes night plug it for charging, no fuel problems. No parking problems.
Feels amazing to ride. Pure joy.

An obvious solution would be to charge a liability deposit for each rider; then return said deposit minus the cost of use…
That way riders have the option to drop off & lock up @ designated areas per hour or take the scooter home for days at a different lower cost effective rate overall…
After inputting said policy there; would be less wear & tear from the elements & vandalism…

Guys, this is just wrong. The title says "Electric scooters may not be around for long…". This video is talking about the rideshare companies and shareable electric scooters. What about personal electric scooters that you OWN. So that means that my electric scooter that I BOUGHT would just disappear and would not be there? Look, Segway-Ninebot wouldn't just disappear because their electric scooters wouldn't sell, they have more products like robotic delivery systems, robo-police, onewheels and other leisure products. So basically rideshare companies might disappear but the personal scooter market could and would stay. Moral of this story: the title should be fixed to "Electric scooter rideshare companies may not be around for long…".

Negative profitability didn't stop uber, lyft, and host of other tech companies to become multi-billion dollar companies. These companies have plan to be profitable in the future or they have exit plan. You can't always value tech companies (or any other companies for that matter) by it's current status of profitability.

I personally blame the people. Yes it's corporate litter, but people are the users and fuel the business, as well as the outcome of the scooters' wear and tear over time. This is the problem with renting versus ownership. If someone had ownership of one of those scooters after saving up for it over time, there would be much more respect for it then to just beat the snot out of it and make it a potential hazard for another user.

The real reason investors pump money into this is because of personal/travel information/data gathered by them…thats the real $$ they are looking at.

shouldn't the title actually be " Sharing of scooters may not be around for long? " they also don't last long cause if people don't own them , they tend to abuse them. It's no surprise that anything you rent or share don't last long. The title is very deceiving.

How can the revenue of a scooter ridden 3.5 times a day be $2.32 when it costs a dollar to unlock the scooter? The minimum is $3.50. This doesn't add up

Problem is too many idiots ride them. Idiots=new laws, Idiots=short lifespan. They leave them at my doorstep and I just toss them into the street and the city picks them up for blocking public way, what happens after to them is a mystery and I don't care. They need to zone them, if you don't put them back into their zone you get charged $5 or $10, if you leave them on Private property $50, Public right of way $30. The next one left on my property will be MINE, I'll take it into my metal garden shed where GPS doesn't work and remake it into my own free untrackable scooter.

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