As an investor who has looked at this space a little bit + talked to other investors who have backed some of these companies, it seems like:
- the economics of scooters are great (very quick payback periods for the scooters). At a few bucks per ride and maybe a dozen rides per day, it doesn't take that long to pay off a $300 or $500 scooter.
- most people that try scooters seem to really enjoy riding them.
- an individual scooter doesn't last super long and needs to be serviced a lot and then replaced.
As an investor, the main thing I'm stuck on is what the moats could be in this business. Brand is a potential moat, but the two biggest companies in this space already have good brands so that's not helpful for me as a seed investor. And I'm not sure if brand would be enough for people to walk an extra block or two if there are closer scooters nearby.
People talk about network effects, but I am skeptical. First those network effects are local. Second, it doesn't take that much money to blanket a city with scooters and break the network effect. My napkin math for SF is that it would cost <$1.5m to put a scooter on every other block (https://twitter.com/lpolovets/status/992503477149450240). If that's accurate, then it's not going to be a big barrier against any well-funded company.
Maybe one moat could be scooter durability. If your scooters are 2x more rugged, then your margins and economics are a lot better, and you can use the additional profits to outspend your competitors on customer acquisition. We'll probably find out what moats do (or don't) exist here over the next few years.
In the spirit of dumping potentially dangerous clutter on the streets and leaving it up to the cities to pay for the cleanup, I'm now taking seed money for my "handgun as a service" business.
I'm going to blanket key areas with handguns that you can unlock with an GPS-enabled app. Once you're done using them ($1 per minute and $20 per-bullet, with "surge" pricing in active-shooter situations), just leave them anywhere in the city for the next user/child to stumble across.
Exactly. I am also super annoyed by all the cheap shared bikes that now clutter our city and are very often parked in the middle of the pedestrian path. Same for shared cars that more often than not are parked in a non parking zone so that people with a baby buggy (or in a wheel chair) have to walk on the street to get around. Share economy would be nice if people would not treat everything like rubbish that they don't own.
Lime just dumped 140 scooters in Santa Barbara and they immediately got impounded. The city is going to charge them a $100 fine for each scooter. I'm assuming that's a drop in the bucket compared to their revenue and the cost of working out adoption specifics with local government.
Let's see if Softbank chooses a winner in the scooter market - I wouldn't be surprised if they came in with a ~$500M investment in Bird or one of its competitors.
I don't get it. If scooters are so great, then why doesn't everyone just buy their own? Seem much simpler than checking them in and out of special built bike racks.
There's almost no clearer indication that the speed of business is quickening at an amazing pace. In the scooter world, the land grab is on, and everyone is looking at ride sharing as the obvious analog, which means raise a lot of money, expand to new cities, and earn market share... quickly.
Whether a couple (or all) of these companies flame out remains to be seen, and is probably likely. But there's also likely to be a winner in this category. And the winner is likely to be worth a lot of money. These companies likely don't "deserve" their valuations based on current metrics like revenue, but the market potential is huge, the growth is high, and the capital requirements are large... so investors seem more than willing to make bets.
This sounds exactly like the ridesharing model. Drown the market in money, kill off your competitors by undercutting on price, then jack up prices to make a business.
The problem, like ridesharing, is once you start raising prices, you just lost all of your customers to a new competitor that hasn't spent all of their money.
I don't see how this model can possibly work. The barrier to switching is almost 0 to the user - you can already see that by looking at the Uber & Lyft tags on every car you get in. Installing another app isn't as hard as swapping insurance providers or mobile platforms.
I'm not sure this is a sign that the speed of business is really quickening all that much. VC-funded bubbles provide a local acceleration in business speed, but they also drastically increase risks and systemic waste.
It's also not clear to me that there will be "a winner" once the VC money runs out. There's no "a winner" in the convenience store market, for example. A study lists 202 viable convenience store chains, the smallest has over 30 stores. [1] And that ignores the many one-off chains, and some of the places like Walgreens and CVS that clearly substitute for convenience stores for many.
That's what both Lyft and Uber thought, but instead the market has withstood two vigorous competitors, alongside strong regional competitors such as Ola, Careem, and Didi. Though margins are much higher with scooters.
They hit a big setback here in Nashville. People are leaving these things all over the place. The city is looking to regulate these types of devices. Please, Bird, don't pull another Uber. This is not an existing market to be disrupted. Work with the municipalities to get a working framework in place so we will all be better off.
Bikes are in a no-mans land because of speed differences -- they're too slow to go on the road, and too fast to safely mix with pedestrians on sidewalks.
I personally prefer dockless bikes over scooters, but I will admit that scooters are safer because of their lower top speed. This makes it reasonable to mix scooters with pedestrian traffic provided that the sidewalk is wide enough.
The key to making bike/scooter-sharing work is to make the infrastructure cheap, incremental, and easy. Google ran into the same problems with GBikes blocking ADA ramps and front doors that cities are seeing with scooters. One big thing that helped was converting a few parking spaces into bike parking (literally just green paint and a few signs), and putting friendly "don't block ADA parking or ramps" signs up.
If you want to prevent "deaths from drivers", the highest impact thing would be to work on self-driving cars (join the great engineers at Waymo, Cruise, or even Uber).
There are rarely reprecussions for a driver hitting/killing a single cyclist, without video evidence or multiple corroborating witnesses/victims, typically law enforcement pre emptively blames the cyclist so one would expect the same thing for scooter riders.
An old editorial about this attitude:
https://www.nytimes.com/2013/11/10/opinion/sunday/is-it-ok-t...
Odds are, the scooter rider won't be wearing a helmet. And in cyclist / motor vehicle collisions, that's usually enough to make it the cyclist's fault.
>What happens when someone riding one of these gets killed by a driver?
Probably the same way they normally are. It depends on the circumstances. Generally speaking the rules that govern traffic flow have a bunch of redundancy and whoever violated more of them is at fault regardless of mode of transportation, liability depends on state law, human factors (how "sympathetic" is the victim is the big one), etc.
Generally speaking the system works fine unless you consider the normal bickering over who's at fault to be not fine (the same bickering you get when both parties have the same mode of transportation).
I read a story a few weeks ago where people were actually taking the scooters. Then they would be marked as stolen, and the people would return them and collect the lost & found fee.
There has been sudden glut of articles about scooter startups here on HN and elsewhere. And I am scratching my head trying to understand what exactly is the end game plan here? If self driving cars and Uber etc succeed then all commuting will be through cars, how will these scooters fit in that picture?
Lots of folks think self-driving cars are just replacing one problem with another. (A car, after all, is a really a moving room; but we don't want to move rooms, we want to move people.)
do you really want to wait for a self driving uber for a 0.4 commute through traffic clogged streets during rush hour? Cars aren't one size fit all solutions for all your transportation; the point of the scooters are to serve as last mile transport.
You-drive cars haven't replaced you-drive scooters. Why would self-drive cars replace them? Sometimes you want to be out in the fresh air, they're cheaper than a car to rent/maintain, and they can get places cars can't.
I was at WWDC last week chatting with a few folks about this (San Jose had tons of Bird and Lime scooters all over the place). One of the thing that these scooter companies (and deckles bikes) are doing is canalizing short trips. There were a few times when I would have taken an Uber from one place to another, but because the scooters had effectively 0 wait time and were 1/4th the price to cover the same distance in the same time, I opted for the scooters.
1/ I think people assume that self-driving cars will "succeed" in a binary sense. I do not think that is how it plays out. I think there is a long, slow process of self-driving cars working a little better in a little more places. In busy, urban centers, self-driving cars are going to be a long time coming.
2/ No matter how self-driving the car, in busy environments, scooters are going to get you from a) to b) faster.
As a frequent Uber user who just purchased an ebike, I don't think I would have been interested in a service like this.
E-bikes/scooters are no where near as expensive as a car. No insurance or gas payment and the maintenance cost is nothing like that of a car.
E-bikes/scooters also don't require a specialized parking space.
E-bikes/scooters can be charged from home.
These are some of the reasons why owning an E-bike/scooter is much easier than owning a car and therefore fewer people will be interested in a pay-per-use service.
[+] [-] lpolovets|7 years ago|reply
- the economics of scooters are great (very quick payback periods for the scooters). At a few bucks per ride and maybe a dozen rides per day, it doesn't take that long to pay off a $300 or $500 scooter.
- most people that try scooters seem to really enjoy riding them.
- an individual scooter doesn't last super long and needs to be serviced a lot and then replaced.
As an investor, the main thing I'm stuck on is what the moats could be in this business. Brand is a potential moat, but the two biggest companies in this space already have good brands so that's not helpful for me as a seed investor. And I'm not sure if brand would be enough for people to walk an extra block or two if there are closer scooters nearby.
People talk about network effects, but I am skeptical. First those network effects are local. Second, it doesn't take that much money to blanket a city with scooters and break the network effect. My napkin math for SF is that it would cost <$1.5m to put a scooter on every other block (https://twitter.com/lpolovets/status/992503477149450240). If that's accurate, then it's not going to be a big barrier against any well-funded company.
Maybe one moat could be scooter durability. If your scooters are 2x more rugged, then your margins and economics are a lot better, and you can use the additional profits to outspend your competitors on customer acquisition. We'll probably find out what moats do (or don't) exist here over the next few years.
[+] [-] alasdair_|7 years ago|reply
I'm going to blanket key areas with handguns that you can unlock with an GPS-enabled app. Once you're done using them ($1 per minute and $20 per-bullet, with "surge" pricing in active-shooter situations), just leave them anywhere in the city for the next user/child to stumble across.
Anyone want to fund me?
[+] [-] tantalor|7 years ago|reply
https://www.theonion.com/chicago-introduces-new-citywide-gun...
Also appeared as an art piece,
http://wgntv.com/2018/05/11/gun-share-public-art-exhibit-fro...
[+] [-] jlebar|7 years ago|reply
In the same spirit, I was thinking of starting a car rental service. :)
[+] [-] unknown|7 years ago|reply
[deleted]
[+] [-] patall|7 years ago|reply
[+] [-] randyrand|7 years ago|reply
Surely that's an even better comparison!
/s
[+] [-] arosier|7 years ago|reply
$300 - vehicle cost (based on alibaba Xiaomi m365 estimates)
$8 - average fare (unknown)
3 - rides per day (based on 90k rides in the first 30 days)
$12 - daily cost of charging per vehicle
1% - daily fleet loss (might be closer to 2%)
1% - daily maintenance required (might be closer to 2%)
After 100 days: 0 vehicles remaining
Current return on capital: -8%
Dynamic areas of the unit economics:
- Increase number of fares per vehicle (increased battery life)
- Increased average fare (increase pricing)
- Decrease vehicle charging cost (current rate could be cut by about 65% to maintain competitive hourly compensation for type of work)
- Decrease loss rate by implementing some sort of lock- tethering system
[+] [-] maxk42|7 years ago|reply
1% daily fleet loss would leave 36 - 37 vehicles remaining after 100 days.
[+] [-] habosa|7 years ago|reply
[+] [-] dylanz|7 years ago|reply
[+] [-] sschueller|7 years ago|reply
[+] [-] philip1209|7 years ago|reply
[+] [-] gordon_freeman|7 years ago|reply
[+] [-] theNJR|7 years ago|reply
[+] [-] anamoulous|7 years ago|reply
[+] [-] bjourne|7 years ago|reply
[+] [-] iseff|7 years ago|reply
Whether a couple (or all) of these companies flame out remains to be seen, and is probably likely. But there's also likely to be a winner in this category. And the winner is likely to be worth a lot of money. These companies likely don't "deserve" their valuations based on current metrics like revenue, but the market potential is huge, the growth is high, and the capital requirements are large... so investors seem more than willing to make bets.
[+] [-] alex_young|7 years ago|reply
The problem, like ridesharing, is once you start raising prices, you just lost all of your customers to a new competitor that hasn't spent all of their money.
I don't see how this model can possibly work. The barrier to switching is almost 0 to the user - you can already see that by looking at the Uber & Lyft tags on every car you get in. Installing another app isn't as hard as swapping insurance providers or mobile platforms.
[+] [-] wpietri|7 years ago|reply
It's also not clear to me that there will be "a winner" once the VC money runs out. There's no "a winner" in the convenience store market, for example. A study lists 202 viable convenience store chains, the smallest has over 30 stores. [1] And that ignores the many one-off chains, and some of the places like Walgreens and CVS that clearly substitute for convenience stores for many.
[1] http://www.cspdailynews.com/industry-news-analysis/top-conve...
[+] [-] Karrot_Kream|7 years ago|reply
[+] [-] colept|7 years ago|reply
BIRD has an edge in terms of availability but I find myself taking one to find a Lime.
[+] [-] cabaalis|7 years ago|reply
[+] [-] Tiktaalik|7 years ago|reply
What happens when someone riding one of these gets killed by a driver?
[+] [-] cbhl|7 years ago|reply
I personally prefer dockless bikes over scooters, but I will admit that scooters are safer because of their lower top speed. This makes it reasonable to mix scooters with pedestrian traffic provided that the sidewalk is wide enough.
The key to making bike/scooter-sharing work is to make the infrastructure cheap, incremental, and easy. Google ran into the same problems with GBikes blocking ADA ramps and front doors that cities are seeing with scooters. One big thing that helped was converting a few parking spaces into bike parking (literally just green paint and a few signs), and putting friendly "don't block ADA parking or ramps" signs up.
If you want to prevent "deaths from drivers", the highest impact thing would be to work on self-driving cars (join the great engineers at Waymo, Cruise, or even Uber).
[+] [-] stevenwoo|7 years ago|reply
[+] [-] protonimitate|7 years ago|reply
If Bird has already achieved a $2B valuation, it will take massive amounts of user deaths to warrant any change in that valuation.
[+] [-] godzillabrennus|7 years ago|reply
In such matters it would be naive and a breach of fiduciary duty of Bird’s Team not to have insurance to cover those matters.
[+] [-] notatoad|7 years ago|reply
[+] [-] dsfyu404ed|7 years ago|reply
Probably the same way they normally are. It depends on the circumstances. Generally speaking the rules that govern traffic flow have a bunch of redundancy and whoever violated more of them is at fault regardless of mode of transportation, liability depends on state law, human factors (how "sympathetic" is the victim is the big one), etc.
Generally speaking the system works fine unless you consider the normal bickering over who's at fault to be not fine (the same bickering you get when both parties have the same mode of transportation).
[+] [-] fleitz|7 years ago|reply
[deleted]
[+] [-] xiaosun|7 years ago|reply
[+] [-] giarc|7 years ago|reply
[+] [-] joeblau|7 years ago|reply
[+] [-] newest_user_|7 years ago|reply
[+] [-] sschueller|7 years ago|reply
Risky however if cities ban them and/or roll out their own.
[+] [-] ggg9990|7 years ago|reply
[+] [-] thisisit|7 years ago|reply
[+] [-] Eric_WVGG|7 years ago|reply
http://money.cnn.com/2017/05/05/technology/bikes-disrupt-car...
[+] [-] hunter23|7 years ago|reply
[+] [-] ceejayoz|7 years ago|reply
[+] [-] joeblau|7 years ago|reply
[+] [-] aboodman|7 years ago|reply
2/ No matter how self-driving the car, in busy environments, scooters are going to get you from a) to b) faster.
[+] [-] lugg|7 years ago|reply
https://www.google.ca/search?q=mumbai+scooter+traffic (switch image)
Roughly 5x the fuel efficiency doesn't hurt either.
[+] [-] NullPrefix|7 years ago|reply
[+] [-] shahbaby|7 years ago|reply
E-bikes/scooters are no where near as expensive as a car. No insurance or gas payment and the maintenance cost is nothing like that of a car.
E-bikes/scooters also don't require a specialized parking space.
E-bikes/scooters can be charged from home.
These are some of the reasons why owning an E-bike/scooter is much easier than owning a car and therefore fewer people will be interested in a pay-per-use service.
[+] [-] dazhbog|7 years ago|reply
[+] [-] donpark|7 years ago|reply
- daily loss rate could escalate as thieves get better & friends join in.
- personal injury - you're encouraging people to ride scooter without a helmet.
[+] [-] koverda|7 years ago|reply
[+] [-] TaylorSwift|7 years ago|reply