Why Scooter Startups Are Worth Billions


This video is sponsored by Brilliant. The first 200 to use the link in the description
get 20% off their annual premium subscription. You’ve probably seen them around. Electric scooters dumped just about anywhere. Litter bikes. Litter bikes. They’ve been littering the streets lately. And by littering, I mean littering. The scooter invasion. Wheel-mageddon. They’ve got the green ones and the orange ones and it’s basically litter. They are bringing out the worst in some people. Last September, the city of Santa Monica,
California woke up to a surprise: sidewalks everywhere were filled with small, electric
scooters you could rent by the minute. It’s not an entirely new idea, Scooters,
in some form, have been around forever. And you’ve long been able to rent them in
cities like San Fransisco. But this company, called Bird, made it irresistibly
cheap. And simple. All you do is download their app, point your
phone at the scooters’ QR code, I guess we finally found a use for those, and off
you go at about 15 miles an hour. They’re fast, convenient, if I’m honest,
a little bit ridiculous looking, and… a lot of fun. Unless you’re an investor, In which case,
scooters are no laughing matter. Bird became a unicorn, a startup with a billion
dollar valuation, faster than Uber, Airbnb, or Facebook. Actually, faster than any company in history. And today, still just over a year since it
was founded, it’s valued at over two billion dollars, about as much as Reddit or 23AndMe. Remember, we’re talking about scooters. and it’s just one of many, including Spin,
Lime, who is also a unicorn, JUMP, and about a dozen others. Meanwhile, Google, Uber, and Lyft have all
invested millions of dollars. Now, depending on who you ask, these are either: ridiculous numbers for barely 1-year-old startups
in a fad industry, or, smart investments in what’s clearly
the future of transportation. So, which is it? Are scooters a useful means of mobility or
an invasion of our sidewalks? Let’s imagine you live in Seattle, say,
an apartment here in the Queen Anne neighborhood. And you work downtown, here at Amazon corporate
headquarters. You could walk a couple of blocks and take
the bus, but it’ll cost two dollars and seventy-five cents, or five fifty a day. And it’ll take at least 20 minutes, which
is just as slow as walking. Biking would be quick and cheap, but then
you have to store, lock, and maintain it. Plus, no-one wants to arrive at work or school
sweaty. So, scooters are a nice alternative. It’s faster than walking, Cheaper than the
bus, and more convenient than a bike. Maybe not revolutionary, but pretty handy. Now, let’s say, you live here, near Lakewood. In this case, the bus can drop you off right
at work. And the beauty of public transportation is
that it reduces redundancy. Even if nobody commutes the exact same route,
there’s always going to be a lot of overlap in the middle, If we all share 90% of our journeys, it’s
weird that we take 100% of it in… our own separate cars. So, putting people together saves time, space,
and money. Here’s the thing though: Transit is designed
for the average person, but almost no-one is exactly the average person. In other words, it’s mostly convenient for
most people, but totally convenient only for a few. Because, if the bus stopped everywhere, it
would also… stop being useful. In this example, it’s a 24-minute walk from
home. This is The First and Last Mile problem, The hardest and least efficient part of a
trip is the beginning and the end – getting to a transit station, and then, to your final
destination. In most cities, the obvious solution is to
walk or bike. But many people just… don’t. It’s too far away, or too inconvenient,
so, they drive instead. That’s probably what you’d end up doing
here, even though transit is technically available. Now, whether scooters are ultimately good
or bad kinda depends on what exactly they’re replacing. If people scoot instead of walking or biking,
like in the first example, they’ve lost some exercise and gained some convenience. Not a huge win or loss. But if scooters replace cars, that’s a different
story. That would mean less traffic congestion and
fewer carbon emissions. Of course, it sounds ridiculous, Even with
their 20 or 30-mile range, they aren’t really practical for long trips. But, they don’t actually have to be. Not directly. If scooters make it easier to get to and from
the bus station, you’re more likely to take it. All they need to do is make transit a more
desirable option. The effect is fewer cars on the road. That’s especially useful in underserved
and far away neighborhoods. Here, scooters aren’t just a novelty, they’re
a means to greater mobility. Lime showed this in 2017, when it reported
that 40% of riders started or ended their bike rides at public transit stations. All of this is possible because there’s
always a scooter nearby. Instead of docks or stations, you pick them
up and leave them wherever. Problem is… well, people pick them up and
leave them wherever. Technically, you’re required to wear a helmet,
park out of people’s way, and not drive on the sidewalk. In practice, ehh, not so much. I’ve yet to see anyone wear a helmet, and
many streets just… don’t have bike lanes. Companies can explain the rules, but they
can’t enforce them. Sooo… cities aren’t the biggest fans. It doesn’t help that many of these companies
move in to an area before getting permission, hoping that by the time they notice, people
will have already gotten used to them. If this sounds familiar, it’s no coincidence. Bird’s founder previously worked for Lyft
and Uber, who famously used the same strategy. This time, cities were ready. They’ve already been banned in San Francisco,
Beverly Hills, Cambridge, and Columbus. And, like Uber, there isn’t much to set
companies apart. They all cost the same dollar to start plus
15 cents a minute, They even have similar sounding 4-letter names. So, which scooter do people choose? Well, the one that’s in front of them. The first app you download will also likely
be your last. Why bother with several? That’s why everything is happening so quickly:
they saw what happened with Uber. This is their second chance, and nobody wants
to be left out. In China, it happened with bikes. Companies dumped them on every street and
corner until there was more bike than sidewalk. Demand just couldn’t keep up with supply,
and now they sit in trash piles so big they’d impress Wall-E. But with enough market share, the economics
are good: Most companies use the Xiaomi M365, which,
let’s assume they buy in bulk for about $250. Lime says they’re used an average of 8 to
12 times a day, so let’s say, 10 rides, at an average of about $3 each. Of course, there’s also charging. Anyone can sign up to become a charger, or
as Lime calls them, juicers. At night, they pick them up off the streets,
take them home, and plug them in for about $5-10 a scooter. So, we’ll subtract seven fifty. That means the average scooter makes something
like twenty-two fifty a day. And pays for itself in under two weeks. Even accounting for things like maintenance
and theft, which Lime says affects less than 1% of its scooters, there’s money to be
made. But what’s most interesting about The Scooter
Wars, may have nothing to do with the scooters themselves. Companies aren’t just competing for space
on the sidewalk, they’re also competing for this space – a slot on your home screen. This is where Uber starts salivating. Anyone with their app can already ride their
scooters. It’s a built-in advantage. And if you’re already on people’s phones,
why stop there? There’s no reason to be the taxi company
or the scooter company when you can be, as Uber’s new CEO said, “the Amazon of transportation”. Because a smart business sees itself from
the perspective of a customer. People think about outcomes, not business
models. If you want to watch something, you automatically
go to YouTube. If you want to buy something, you go to Amazon. And soon, if you want to go somewhere, you
open Uber. Everything else is unnecessary complexity
companies convince themselves we care about. We’re still in the early days of The Scooter
Wars, but there is good reason to get excited. And the big picture is really about platforms,
the relationship between government and private corporations, and, increasingly, battery technology. The future of everything from cars, to scooters,
and phones depends on how efficiently we can store energy. And the best way to learn the science behind
batteries and energy storage, among other things, is with today’s sponsor, Brilliant.org. What’s great about Brilliant is you actually
apply the knowledge as you learn it, rather than just memorizing formulas. You solve puzzles, analyze graphs, and answer
questions to understand the topic on a deeper level. I especially like how there are lessons at
all different difficulties, You can start from the very beginning – what
an atom looks like, and work your way up to the science of nuclear energy. To get started or dive deeper into the world
of science, math, and technology, go to brilliant.org/Polymatter and sign up for free. The first 200 people to use that link will
also get 20% off the annual Premium subscription.

, , , , , , , , , , , , , , , , , ,

Post navigation

100 thoughts on “Why Scooter Startups Are Worth Billions

  1. Fun fact: Steve Wozniak (Apple co-founder) created a sport called Segway polo. Where’s scooter polo? And will scooters become Paul Blart’s next preferred mode of transport? Just a few questions for you to sit on this weekend.

  2. You know what really littering our streets are those oversized bulky cars… get ride of those and replaced them with clean scooters. Crazy how the media is trying to vilify scooters.

  3. The financials in this video are ENTIRELY wrong. Please look it up – very easy to find that ALL are losing serious money. Bird lost $100M in Q1 2019 alone. Probably the same back in Oct. 2018.

  4. This is a very interesting topic. See, I skate to work. And I don't skate all the way – I live in a different town to where I work. It's about a 40 minute commute by bus. But as you pointed out in most cases bus are only fully convenient for a few people using them. The rest has to walk to a bus stop go catch them and then walk the rest of the way from where they get off. That's where my skateboarding solution comes in. Not only is it affordable, ecologic and a great exercise for the morning, but it also makes people look at you like you're 12. However I think it's the best "filler" transport for these short routes home->bus stop, final bus stop->work (etc.) The best part is that you can grab a skateboard into your hand and go shopping, cross a street or walk up a hill.
    The biggest downside is the environment. You need smooth, flat surfaces to be able to skate, and in the US it's usually not a problem, however the British sidewalks near my workplace are 50/50 smooth and terribly cracked and uneven surfaces.

    I would like to encourage EVERYONE to try and find their own transport of this kind – if we all did this (use buses to get to hubs near our workplaces and then bikes, scooters, skateboards or jetpacks), we could make those electric and save our planet from degrading as quick as it is at the moment.

    Unfortunately the comfort of going from place A to B at your own pace whilst enjoying a lone ride is currently too embossed into our society and I don't think I, or anyone for that matter, could convince people to shift. Maybe a size reduction would do the cars some good? Instead of wasting 3 empty seats on your journey you'd just have one?

    I think that this idyllic scenario will only happen if:
    1: it's too late and now we HAVE to get rid of cars because we'd ran out of resources
    2: the infrastructure of new cities would force this onto citizens by eliminating public roads from town centres completely – making it a bus, tram etc only zone
    3: someone comes up with a way of convincing people that we need to do this ASAP. some modern-day Jesus like, say, Elon Musk.

    Any case – tl;dr (too long, didn't read), but for those of you who have, let me know by discussing this in replies or liking my comment.

    All the best people. I hope we can save our planet and children from dying!!

  5. You said that They were banned in San Francisco,

    Well that’s a damn lie, I just went yesterday and they were everywhere.

  6. The idea is great and would work if riders would learn to be respectful. Like everything else people ruin it for the rest. Humans are stupid.

  7. It's too bad that all of these "brilliant" fluff pieces that exist simply for a quick segue way into their commercial can't fully make their point before dropping off for the almighty sponsor dollar. Anyway – so Lime – was $1 to start and .15 a minute here in Phoenix. Slightly more expensive than an Uber for a 30 minute scoot but more fun and immediately gratifying. Then they jumped up to .16 per minute. OK no big deal – everybody has to eat I guess. Then, out of the blue, the entire city of Phoenix was turned into a slow zone where the scooter automatically tops out at somewhere around 8 or 9 mph – so effectively doubling the time it would take you to get anywhere – do they drop the price due to the inconvenience? No… they raise it to .29 cents per minute. So they have effectively out priced their value when say a normal 30 minute scoot in the Phoenix city limits will now take you an hour or more – cost a LOT more due to the time increase and the price increase and that 30 minute scoot is an 5 to 10 minute Uber ride that will now cost much less. Uber is swell in Phoenix – longest I have waited for a ride is like 10 minutes. So that 10 minute wait plus the 10 minute ride gets me wherever in 20 minutes. 40 minutes less than scooter and less expensive. Stupid… it's too bad I liked riding the scoots but they can have there screw back….

  8. I have a great scooter mod that will put any scooter company ahead of the competition. https://youtu.be/JGVf3F01WXE It does what it says in the blurb

  9. You are missing the fact that people just want to ride them not just to commute to work. Being able to go where you just can’t with cars or buses. Nothing feels better than riding a scooter by the ocean as the sunsets. Even thinking about taking a trip just to ride scooters and see the sites and scenery.

  10. If they were faster than bikes I'd understand.

    Like main problem with bikes being on the road is they slow down traffic and problem with them on paths is they're too fast for pedestrians.

    If everyone was on bikes then you could have 2/3 next to each other on each lane, with few one bike moving at bike speed slows all cars behind it actually increasing traffic.

  11. if you know coding, here is a million dollar app idea: create an app where ppl can pay for each scooter company. so, an app that combines all scooter companies. and users only have to download your app to drive with them scooters

  12. 20 cents a minute for 1 hour = 12€
    You go 15 minutes to work/school a day + 15 minutes back= 30 min
    30 min = 1/2 hours
    1/2 hours= 6€
    6€/day for a year= 2190€
    Average scooter costs 250€
    An ultra premium one would cost 1000€
    You possibly couldn't waste 1190€ on charging your scooter a year
    Conclusion: DON'T USE THEM

  13. Funny how he said: " It's easy, just download the app, hold you phone next to it and ride" HAHAHA, my phone doesn't do any of that stuff.

  14. I have two electric scooters and drive them on pathways and roads in a country where its illegal and the police dont care, one of them actually wanted to ride mine so i let him and he said its a lot of fun πŸ™‚

  15. I wish them well and good luck. I have two scooter apps on my phone still have trouble finding one here in SanFrancisco full charged and available. Love scooters and only challenge is availability and permission to lock and park when at certain stores.

  16. I use ride share scooters to avoid $20-40 parking in LA. It will only be like $5 roundtrip and park somewhere that's a far walk but a fast scooter ride.

  17. In my city, this thing cause about $9 in the first hour. The rented bike is $3/30min. If you are student that's $20/year. So…

  18. If only these scooter users had a bit more courtesy (like, not parking it in the middle of the trail or across the bike lane, or firing down the one-way bike lane in the wrong direction), I'd like them more… but as far as I've seen in the cities I live and work in, they're used a lot, and there's no denying their utility. So I'm okay with them as a concept, but I believe the scooter companies could have some incentives to make riders be more courteous.

  19. Personal opinion of a Berlin citizen:
    – IF you have a GREAT bike: riding it is way faster, way cheaper and way more fun.
    – If you're well organized, riding a bike isn't even much less convenient.
    – Are scooters handy? Yes.
    – Are they the future of mobility? For tourists: Yes. For the rest of us: No.
    – Do they replace cars? No.

  20. BOUNCE startup saal may kitna kamati hai? kitni funding uthai hai, idea kha se mila, business model kay hai, app use kese karte hai , puri case study or in sabhi k jawab jaane k liye click on the link http://www.berojgarengineers.com/bounce-startup-story/ rapido and yullu ki full jankari bhi available hai

  21. "Lime, the company whose business model is buying thousands of electric scooters and just sort of leaving them there in the hopespeople will ride them, is on track to lose $300 million this year." https://saharareporting.com/2019/10/22/you-lost-how-much-on-scooters/

  22. β€œThe best way to learn about batteries, among other things is through Brilliant”…No, no it’s not.
    It’s a good way I guess, but not anywhere never the best. I don’t mind promotion, hell I enjoy it sometimes, but ease up body and tell the truth.

  23. At 8:01 they look slow that guy on the bicycle was passing fast without trying. Also those scooters look uncomfortable and dangerous.
    I bought a E-Scooter (Vispa style) not way a bicycle would pass me.

  24. I don't understand why people dislike scooters. As this video says, it gets you to and from the bus station. To and from a destination that's too long to walk, but you don't want to drive through a busy city. Great idea! Hope they don't get outlawed.

  25. I like Uber much more than Lyft because – when Lyft was first starting out, it lied about the prices. It quoted me a price cheaper than Uber, but then ended up charging much much more! That was terrible! Now, I've taken Lyft and it's more honest, but I still prefer Uber because of my bad first experiences.

  26. No Scooter business will ever earn money… they don't even have the chance to be profitable!

    I understand the business model for the people that start such a bogus business – they get filthy rich because investors throw money at them. But what is the idea of the investors? Inevitably all those companies will go bankrupt!

  27. electric scooters are the best idea for cities..sure you're not going to make everyone happy but I will say more and more people are taking scooters so the haters are becoming less and less.

  28. Yup, this is going down. Signed up to be a charger, wasnt fiscally viable. $4 a scooter to charge 3 hours to charge one. Could fit maybe 10 in a car, but you either have to find a ground level apartment in one of the cities they have these in, or you could carry them up to your apartment, or you could drive them out of the city and charge them at home (at that point gas is $4 a gallon so youd need more) so they're pretty desperate for chargers (at least in my city) in most situations you actually have to pay to charge these, or the people who are in a position to not do that likely make so much money that they're not likely to bother with $4.

  29. THE EDGY ONLINE DEBATOR ( Ν‘Β° ΝœΚ– Ν‘Β°)γƒŽ #14/88 卐卐卐卐卐卐卐卐卐卐卐卐卐卐卐卐卐卐卐卐卐卐卐卐卐卐卐卐卐卐卐卐卐卐卐卐卐卐卐卐卐卐卐卐卐卐卐卐卐卐卐卐卐卐卐卐 says:

    finally I can enjoy my soy while riding my cuk cuk scooter

  30. I would just buy my own scooter on amazon. I could get a pretty good one cheap for like 300 dollars. The store is like 2 miles away. It’s perfect for me. Just bring a backpack to put bags in

Leave a Reply

Your email address will not be published. Required fields are marked *