For the electric scooter business, the going is going is getting tough. After two years of furious growth, the micromobility industry has entered a phase of survival, with major players shedding staff, pulling out of cities, and sharpening their competitive instincts.
With so many companies still vying for street and market space—and virtually all of them losing money fast—industry insiders expect 2020 to be full of shakeouts. What might those be, and why? Here are four predictions for the year ahead in scooters, bikes, trikes, and all things small, dockless, and electric.
1. Companies will be culled
If Johnny Appleseed had attended Burning Man, perhaps he’d have gone into the scooter business. But he would have quickly learned that scattering thousands of motorized two-wheeled conveyances into city streets is a highly capital-intensive process. Investment into electric bikes, scooter, and mopeds has exceeded $6 billion since 2018, and startups are very quickly burning through it; the business model is built on renting relatively expensive machines that live brief, hard lives on the streets. Bird, an industry leader valued at $2.5 billion, spent nearly $100 million in in the first quarter of 2019, while its revenue dwindled to about $15 million, The Information reported last year. Lime’s losses for 2019 topped $300 million.
These and other ventures continued to raise new rounds of funding last year, and Uber and Lyft—ride-hailing bigwigs with substantial scooter sidelines—both went public. But investors and shareholders are eager to see margins improve. Look at the spate of industry layoffs in recent months: Over the course of 2019, Bird snipped about 60 staff from its payroll. In November, Lyft withdrew scooter operations from six U.S. cities and laid off 20 employees. Earlier this month, Lime eliminated 100 jobs and pulled its services out of 12 cities globally, while a reorganization at Uber led to service cuts and job losses at Jump, the electric bike/scooter company it acquired in 2018.
As companies trim their operations, many observers believe that further contractions are ahead, especially since this is an industry where companies have little to set themselves apart. More mergers, such as Bird’s acquisition of the scooter and moped startup Scoot last June, seem inevitable. “In Los Angeles this past weekend, I saw over a half dozen stand-up scooter options—many right next to each other on the same corner,” Jim McPherson, a Benicia lawyer and expert on micromobility, told the San Francisco Chronicle last year. “The only difference between them was the color of their paint—and the apps used to hail them.”
Changes might also be coming to less-profitable markets. David Zipper, a visiting fellow at Harvard’s Taubman Center for State and Local Government (and CityLab contributor) who watches the space closely, believes that any number of spread-out, smaller cities might be surprised to find themselves totally scooter-less by the end of 2020. “I think some city officials have a misconception about how limitless the wallets or bank accounts of these companies are,” Zipper said. “They might soon find themselves wondering how they can get scooters back.”
2. City regulations will create winners and losers
Several media outlets declared 2018 the “year of the scooter,” because that was then the first wave of them hit cities. That spring, Bird dropped the first batch of them in Santa Monica, unannounced; Lime, Skip, Spin, Lyft, Uber, and others quickly followed. The startups believed that battery-boosted scooters could draw city-dwellers into a car-free lifestyle, a promise that dockless bikes had failed to meet just one year earlier.
But there was an immediate (and understandable) public backlash: Scooters left dumped in public rights of way blocked pedestrians and wheelchair users. Their mostly male riders seemed to have little interest in adhering to basic safety or traffic regulations, and frequently rode helmet-free and onto sidewalks. And in some of the cities where they arrived, motorized scooters were totally illegal. Scooters were a nuisance trifecta for city regulators.
Which meant that 2019 was the year of city regulations, permitting schemes, and outright prohibitions. Cities have employed a range of strategies to rein in scooter chaos. In L.A., for example, scooter companies must comport with a complicated (and contentious) set of data-sharing requirements, as well as certain safety and fleet size standards, to secure permits to operate. Year-long pilot programs in both San Francisco and Washington, D.C. concluded with multiple companies getting cut from those markets, with Skip getting the boot in S.F. and Bird, Lime, Bolt, and Razor kicked out of the District. Nashville, Denver, and San Diego all issued temporary bans; scooters still have never been legal in New York City.
The whims of city regulators will likely have an effect on which companies succeed from market to market, and on which ones are able to raise more funding, predicts Alex Vickers, who worked on business development teams at Jump and Motivate and is now penning a newsletter focused on the industry. “We’re seeing regulators have the ability to pick winners and losers now,” he said. “It’ll be really interesting to see—can micromobility companies even attract venture capital if they aren’t one of the vendors awarded a permit in Paris or in San Francisco?”
3. New form factors will appear
At their outset, dockless scooters developed a reputation as the tech bro’s mode of choice. That reputation was basically deserved: Rider surveys and national analyses have since confirmed that men (who are mostly white or Asian) are far more interested in scooting than women and gender non-conforming folks.
For that reason and others, some observers expect to see an evolution in vehicle design in the near future, with different shapes, sizes, and wheel arrangements equipped to serve various transportation needs and comfort levels. Already, companies are deploying more robust electric mopeds, trikes, heavy-duty cargo bikes, and egg-shaped mini-cars for possible use as public rentals. Indeed, the humble little scooter may not be the default for much longer.
“You’re going to a vast explosion of form factors,” Horace Dediu, a technology analyst and founder of the Micromobility Conference, said in an interview with CityLab last year. “It took 30 or 40 years before we standardized automotive design. [With scooters,] I think we’re in the very early phases of experimentation.”
4. The battle over data-sharing will go on
Last Friday, lawyers for Jump went to Los Angeles City Hall to argue that sharing granular trip data with L.A.’s department of transportation is a kind of government surveillance. The hearing was the latest development in the year-plus series of skirmishes between Uber (Jump’s owner) and officials at LADOT, which rolled out a pioneering set of standards and software tools to facilitate real-time data-sharing with mobility companies last year. Jump has refused to comply, and is now appealing L.A.’s decision to revoke its permit last fall. The question of whether L.A.’s program—known as “MDS,” or the “mobility data specification”—is legal under California privacy law is set to be addressed by state legislators later this year.
“I believe some new decisions will impact how data is shared between mobility operators and cities,” said Regina Clewlow, the CEO of Populus, a micromobility data analytics service.
There will be more battles between companies, as well, especially scooter companies and mapping apps. Transit, a multimodal routing and ticketing app, objected last year when Citibike, New York City’s docked bikeshare system, was pulled from the platform by its owner, Lyft. So far, Lyft has allowed the other bikeshare systems that it operates to remain on Transit. But there are other reasons to believe this might be an issue. If you use Google Maps to get around, you’ll notice that Lime is the only micromobility offering that appears there. (Google X is an investor in Lime.) Lime has also recently issued a cease-and-desist to Scooter Map, a third-party app that maps vehicles from multiple companies.
“Most mobility operators are sensitive to sharing their users to other platforms which is understandable because they’re trying to build businesses,” said Clewlow. “But we’ve also seen companies start to restrict access to data feeds that perhaps used to be open.”