Are E-Scooters Really Just an Investor Money Pit?

CC BY 2.0. Scooters parked on sidewalk in Tempe/ Lloyd Alter

The companies are losing hundreds of dollars on every scooter.

As Matt Yglesias noted on Vox, e-scooters "have a legitimate role to play in offering a direct point-to-point transportation option that is less physically demanding than a bicycle, cleaner than a car, and smaller than either."

I have written that they could be transformative, and that it's time to take back the streets from all the cars and make room for alternative modes of transportation. Scooters are also easier to step around than dockless cars that are often strewn all over sidewalks and bike lanes.

But alas, they may not be around for long, not because cities ban them, but because they are a really lousy business. According to Alison Griswold of Oversharing, the average Bird scooter costs about $360 to buy, but lasts just 28 days before it breaks, gets stolen or vandalized, and scooter company Bird loses about $295 per scooter, before it even accounts for fees and licences paid to municipalities. Griswold notes that "bad as these numbers are, they maybe shouldn’t be surprising."

The electric scooters Bird deployed for shared commercial use, at least initially, were rebranded Xiaomi devices intended for use by a single owner with a weight limit of 200 pounds. The average American man weighs 197.9 pounds and the average woman 170.6 lbs. These scooters were also designed to be used in mild weather and on flat surfaces. They were absolutely not designed to be ridden multiple times a day in all kinds of weather and on all kinds of terrain by Americans who, on average, are barely under the scooter weight limit before you adjust for clothes and any baggage (physical, not emotional) they might be carrying.

lloyd on a scooter

The author on an e-scooter in Tempe, Arizona/ Photo Bonnie Alter/CC BY 2.0

The companies are now introducing stronger, safer scooters that don't suddenly slam on the brakes like some of Lime's scooters did when people are "riding downhill at top speed while hitting a pothole or other obstacle."

Tipster Hugh suggests that scooters are nothing more than venture capital money pits. According to Seeking Alpha they have indeed attracted a lot of investment: "Lime, or Neutron Holdings Inc., has been having rounds of investor meetings that have hinted at a multibillion-dollar valuation of about $3.3 billion. Uber Technologies Inc. has already invested in Lime at its $1.1 billion valuation."

I hope that this isn't all being tossed into the river like so many scooters are.