
The Scooter Economy - djug
https://stratechery.com/2018/the-scooter-economy/
======
dilap
a weird side-effect of living in SF is cities in movies start to look fake:
where is all the feces and shattered glass and tent cities?

i've always assumed the city govt was just disfunctional, but the speed with
which they removed the menace of convenient, ecofriendly scooters makes me
wonder if they're actually malevolent, somehow.

~~~
laughinghan
Have you considered the possibility that the scooters are genuinely unpopular?
It may only be a minor inconvenience for you or I to walk over them when
strewn all over the sidewalk, but for someone in a wheelchair, they can be a
serious obstacle to getting from one place to another.

~~~
solatic
People complaining about dockless scooters strewn over sidewalks makes me
wonder how we ever got people to stop littering. If the primary reason why
people leave scooters in the middle of the sidewalk is out of empathy-lacking
convenience, then why don't people throw food wrappers and plastic bottles all
over the sidewalk in the same quantities and for the same reasons?

The answer (supposedly) is due to widespread anti-littering campaigns and the
new ubiquity of trash cans. Why can't there be similar measures for scooters?
Painting lines on sidewalks saying "it's OK to park a scooter here!" (painting
lines being an option that costs almost nothing and is completed extremely
quickly) combined with signage saying "you must park dockless scooters only in
the lines or else $250 fine" (akin to only throwing trash in trash bins or
else fine).

Scooters aren't inherently problematic, it's the sclerotic municipalities
which refuse to adapt to changing circumstances who are the real culprits.

~~~
CaptainZapp
So you suggest that cities pay for infrastructure in order to enable financial
gain of private companies.

Let's just say that I disagree.

~~~
jonknee
That's par for the course, for example you don't see Ford chipping in for the
275,000 street parking spots in the Bay Area. SF could easily remove one
parking spot per block and make it parking for bikes and scooters. But then
all the people used to the city subsidizing _their_ parking will be in an
uproar. It's only a subsidy when the other guy gets it.

------
drcode
For someone living in a town that is still scooter-free at the moment
(Chicago) can someone explain to me:

1\. Wouldn't it be a great business for thieves to specialize in stealing
these and finding out a way to fence them in large quantities?

2\. How can it be economical to pay people to lug these to their homes and
charge them on a regular basis?

3\. With tires that small, and with many riders riding them that are not
experienced with skateboarding and other small-tired vehicles (which can get
viciously trapped in crevasses/potholes while driving full speed) isn't the
risk of injury pretty high, far higher than a bicycle?

4\. What is the reliability like on these things? It seems like it would be a
device with pretty frequent electrical problems and loose connections.

I'm mostly a fan of the idea BTW, I just am unclear of the economics...

~~~
beisner
I'm not sure about the scooters in question, but there's a similar dockless
model for bicycles in many cities in China (ofo, Mobike, etc.) and as far as I
can tell the bikes there are made of components that are pretty unique to
those brands of bike. Because of their unique shapes and non-standard
fittings, they'd basically be useless on any other bike frame, which means
that the aftermarket value is extremely low. Additionally, the locking
mechanisms are pretty robust and are welded to the frame, so removing the
locking mechanism and just using the bike for free just isn't worth it given
how cheap riding it is.

There might be some cultural differences that might make things different for
scooters in America, but if the service is offered very cheaply, and the
scooters are unique enough in build to be useless for retrofitting other
scooters, then I don't see much of a market opportunity for fencing.
Especially if the scooters have accurate GPS welded to their frames.

~~~
dsfyu404ed
I think that seriously underestimates how industrious some of people who
collect scrap metal are.

If scooters get popular then people will steal them. It only takes one person
to figure out some way to monetize your scooters before all your scooters are
disappearing and need to patch the exploit.

I'm betting that for awhile most scooters will be vulnerable to the typical
"apply cordless drill in the right place" exploit.

The battery packs will probably be the most useful thing to scrapper. There
will probably be a cottage industry of people repackaging them in more useful
form factors and then selling the end result on eBay. The motors aren't going
to be worth much but if you're already picking one apart you may as well pull
the motor and toss it in the electric motors pile.

------
gandreani
I like today's article. I've been subscribed for a couple of months now
(volun-told at work) and a lot of the latest articles had the author trying to
sell the "Aggregation Theory" a bit too much. I found myself skipping large
parts of the articles because they were just re-iterating the theory, applied
to current events.

It's a shame cause I really like the analysis provided otherwise. Specially
when numbers are brought in like today with the parking spaces.

~~~
neves
What is the Aggregation Theory and how it is related to scooters?

~~~
gandreani
Sorry, my comment was aimed at other frequent stratechery readers. Here's a
page listing all the relevant articles on it

[https://stratechery.com/concepts/](https://stratechery.com/concepts/)

------
jamisteven
I used one the other night on the pedestrian bridge in Nashville, I had walked
to the other side and realized I had forgot my wallet in my car, what would
have been a 10min seriously boring walk turned into an awesome scooter-sesh
that gave me the joy of a 10 year old. I dont see the scooters being littered
everywhere as a problem though, more annoying is people walking while texting,
actual trash-litter etc. Big gov will always want to regulate things they dont
understand.

------
johnvega
I rode bird scooters many times and I'm in favor of electric scooters
succeeding. Yesterday, saw a couple of bird scooters that were not properly
placed, just lying on the ground not using the kickstand. Just to do my small
part, I fixed them up by using the kickstand and making sure they are least
obstacle to foot traffic and wheelchairs. It only took less than 60 seconds.
For those in favor, we can all chip in.

------
swyx
the fact that someone just went "hey what if we had Uber but with scooters"
and it worked is the very definition of low hanging fruit. the good ideas are
NOT all taken.

(am being facetious, but only somewhat)

~~~
dpiers
The Xiaomi M365 scooters everyone is using were released Dec 15th, 2016. Bird
started working on rigging them for rentals less than 6 months later and
launched in August 2017.

If you have been following the developments in personal electric
transportation, the timing is hardly random. The M365 was one of the first
scooters that had the range and speed to be viable for rentals. The good idea
was not low hanging, it was just taken by good founders before you realized it
was good.

~~~
microdrum
"Good founders"

Um. I'll take the founders who designed and engineered the actual technology
(i.e. the scooter, not the app). They will be the winners in the long run.
Show me a great lithium/PV/manufacturing/fluids/materials team and I'll
invest!

~~~
dpiers
Brushless DC motor and lithium battery advancements are the primary tech
enabling these devices, and both are commoditized. The winners in this market
will be the people who can best externalize the cost of repositioning,
charging, and storing these scooters.

~~~
microdrum
There are proprietary advances in lithium and other chemistries, as well as in
the charging systems.

Uber can best reposition and charge scooters ofc, not bird or lime.

But very unclear that it will be worthwhile to do so. There is also the price
that the consumer will bear for a scooter. When it's cheaper to own one's own
after 30 days, and storage is trivial (not true with cars, true with
scooters), not clear there is a rental business to be had.

Comparison: the UberX experience these days is terrible. Smelly cars, surly
people. But popular still, bc because need it and it's the best option.
Whaddya going to do? Drive yourself? That's impractical for UberX use cases.

When the Bird experience is no longer novel and the scooters cause broken arms
and are smeared with urine, will people still use them? Or pop $300 for their
own clean ones? Or walk? Both possible for all use cases.

------
microdrum
Because the scooters are commodities and extremely cheap, it's hard to see the
economics of these companies as strong, contrary to Ben's assertion.

Much of the demand comes from the novelty factor. (Cars are boring, especially
the Prius, yet Uber was a winner from day one!)

When the novelty factor wears off, consumers will "get real" about their last-
mile transpo options, and either there will be so many scooter services that
the price is $0.25 + $0.50/min (Bird economics broken) OR you will buy your
own scooter to have forever for $300 (Bird economics broken).

~~~
RandallBrown
Having your own scooter is a crappy option. Then I have to store it (both at
home and at my destination), maintain it, and charge it. Right now the scooter
businesses handling all of that is the only reason I would ever take a scooter
somewhere.

If there are multiple services, likely one of them can hang on long enough to
take over the market as the others fail. If not, someone else can start a new
one when all others fail and have gotten tired of the idea.

------
themark
The police are enforcing the helmet law in San Diego (300 dollar ticket). I
think the convenience factor is diminished when you are forced to lug around a
helmet.

~~~
nouveaux
It is diminished but the amount it is diminished by is relevant. For someone
having to deal with the last mile problem by taking their bike to work or
walking, a helmet does not seem like a lot to lug around.

------
ertand
I was hoping to get a more in-depth analysis of the 2-sided network effects of
the scooter space. I'm having a hard time understanding the defensibility of
these companies against each other. Habit doesn't seem to be enough to win the
market. Exclusive contracts or leveraging regulations could be options but
they don't feel strong enough either.

If it's not a winner takes all market and multiple players can coexist at the
same time, then I don't understand the investment decision from the VC firms
to value them so high so early. It feels like Uber/Lyft can easily get into
this market and provide a better experience overall.

------
HillaryBriss
In OP's claim that there's a meaningful moat around a Scooter company (or a
ride-sharing company), this sentence is used as support:

 _Riders will, all things being equal, use one service habitually_

And, I'm wondering if this is really true. It hasn't been for me in the ride-
sharing industry. I switch back and forth between services.

~~~
conductr
It goes both ways, I've only ever installed and used one service. Uber got me
first and I see no reason to even deal with the inconvenience of downloading
the Lyft app; although I have heard great things about Lyft and maybe it's
cheaper/faster at times. It requires a small amount of effort on my part that
I don't care to make

~~~
DrScump
Did you look at the privileges you gave the Uber app when you installed it on
the phone?

------
imbusy111
That particular scooter is only $500 + tax from Amazon (or was just weeks ago,
it's sold out at the moment, but you have many other options). If you like it,
just buy it and it will pay off within months. It is not like a car where the
upfront costs are substantial. I heard that it is even $210 at wholesale
prices if you can ship it from China and there is not even an import tax.

Of course the author was just visiting SF and only needed it temporarily - in
that case I understand the need for a rental option, but you should be able to
rent it for a whole week for little cost.

I am an owner of an electric scooter myself, but I do not enjoy the shared
scooters lying around everywhere on the streets like trash. It is
understandable to me why the numbers would be limited by the city.

~~~
dilap
this hardly seems fair, sonce everyone gets to leave their cars lying around
everywhere.

also, believe me when i tell you that for SF at least, scooters are the least
of your aesthetic concerns on the streets and sidewalks...

~~~
thinkmassive
If you leave a car “laying around” in a spot not designated for parking a car
then it’s likely to be towed, or at least ticketed. This works because the car
usually has a registered owner who wants it back.

~~~
dilap
the point is it's silly to complain about the "eyesore" of scooters when
you've already accepted insanely higher impositions from cars. cars actually
kill people! they have hugely detrimental effects on air quality! they take up
_tons_ of space, way more than scooters ever could. the factr that the space
has been "officially deemed ok" is irrelevent.

[http://nordic.businessinsider.com/contentassets/15ba9de498c2...](http://nordic.businessinsider.com/contentassets/15ba9de498c2431ebac1ce1f40124af2/59036a187dea725c008b50b2.jpg?preset=article-
image)

~~~
morogop
"We've accepted one thing that turned out to be bad; so we must accept all
future bad things".

This is a snarky but accurate restatement of your (commonly professed) belief.

~~~
dilap
but the scooters function in large part as as a replacement for cars. so it's
replacing something with lots of problems with something with fewer problems.
it's a net win.

i do agree having regs to dissuade people from blocking & riding on the
sidewalk with scooters seems very reasonable.

once you have that i think scooters are basically problem free (except for
maybe aesthetic concerns).

even w/o that, i still don't see how anyone reasonable could think scooters
were anywhere near the top of the list of hazards of sf streets.

(perhaps they are a major inconvenience for wheelchair users?; i'd be
interested in any first-hand accounts.)

------
neves
I wasn't understanding anything. It looks like the meaning of the word
"scooter" has changed. For all the non-americans here, you can see photos of
scooters: [https://www.google.com/search?q=scooter&client=firefox-b-
ab&...](https://www.google.com/search?q=scooter&client=firefox-b-
ab&tbm=isch&tbo=u&source=univ&sa=X&ved=0ahUKEwiB6aTF8MvbAhWHuFMKHTRYCWgQsAQIkwE&biw=1384&bih=753)

You'll see the usual thing, that looks like a motorcycle, and the new one,
which you can put below your desk.

~~~
TwiztidK
Maybe just an American thing, but we kind use the term for both but usually
call the larger ones "mopeds". If there was a change, I don't think it was too
recent either as I had electric (similar to the Bird scooters, but much
larger) and manual "scooters" in the late-90's/early-00's.

~~~
stevehawk
well the problem there is that a moped is part bicycle.

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the_watcher
In what alternative reality is San Francisco "car-friendly"? I get that the
public transit isn't great, but that doesn't make a city where reserved spots
run upwards of $400 a month and street parking involves constantly moving your
car out of seemingly permanent temporary construction zones and dodging
getting towed (and having your car damaged, etc) "car-friendly"

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pg_bot
How much does it cost to buy a comparable electric scooter?

I just don't see how any of these rental scooter companies survive due to the
capital and storage costs being so much lower than a car.

~~~
jonknee
But then you have to carry a scooter around with you and remember to charge
it. It seems way more useful to just have one that is charged always
available. Especially at the price point.

~~~
pg_bot
Isn't the point of the scooter to carry you around ;)

Remembering to charge isn't a big deal. I do it for my phone and my car. I
would buy a second charger and keep it at work to keep down on the hassle. A
lot of offices have bike storage, why not scooters?

------
notadoc
"The Scooter Rental Economy" is more accurate, I don't think a single scooter
company actually sells them.

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andrewfromx
Here here I never understand the haters. Specially if you are for green nrg!

