The Scooter Wars of Silicon Valley
Earlier this summer, I missed the shuttle which takes me back home from the main campus of Emory University. I was dreading the 40 minute wait for the next one when I saw a bird scooter on the sidewalk. A bulb went off in my head. I downloaded the app, found a coupon online (because why not) and after my entering my card details, I was off. It was surprisingly easy to ride and I reached home in 8 minutes, versus the 20 it would have taken me to walk. The scooter stopped picking up speed at around 16 mph but it was fast enough for me to get a thrill out of it.
I am one of thousands of users who have used dockless electric scooters from companies like Lime, Bird, Skip and Razor. These companies had mysterious beginnings. Hundreds of scooters “were dropped off overnight” in San Francisco, Santa monica and other cities. The companies boasted about the convenience of their scooters being dockless and riders lapped up the opportunity to find a new way to go about their “last mile transportation”. Since then, hundreds of millions have been invested into these companies by Venture Capitalists and other companies. The competition between these startups and the investors alike, is what the news is calling “scooter wars”.
Two such companies have emerged as the main competition in the scooter space: Bird and Lime Scooters. They both have impressive valuations of 2 billion and 1.1 billion dollars respectively with bird’s main investors being B capital group, Sequoia capital and Goldcrest ventures while Lime is backed by Andreesen Horrowitz, Google Ventures and Uber. Investors are rushing to get a slice of the cake and ride aggregators like Uber and Lyft are doing their best to ride the wave as well. Uber plans to show lime bikes on its map as an alternative and post it’s logo on the bikes while Lyft is trying to come up with its own range of electric scooters. The question is, will this be the next revolution which market bulls are harping about or will it die off as a fashion trend, like the bears have hypothesized.
While millennials like me see the value in such a business, there are a number of issues at hand. Cities have been struggling to regulate the parking and riding rules for these scooters. Beverley Hills, San Francisco and Chicago have banned these scooters from the roads while cities like Denver, Atlanta and Washington DC have embraced them whole heartedly. Many critics have pointed out that the scooters block sidewalks when not in use and even though the app clearly mandates every rider to wear helmets and stay off sidewalks, the rules are disregarded by most. These scooters are too fast for the sidewalk and too slow for the roads, which is turning out to be the main problem for regulators.
Lime and Bird, along with half a dozen other companies, continue to grow aggressively unmindful of these obstacles. Bird CEO, Travis VanderZanden, is a former employee of Lyft and Uber and believes that the scooter start ups are facing the same skepticism that ride aggregators initially faced. It is his view that this is the most cleanest, most cost efficient way to provide transportation in crowded cities.
For college students like me, these scooter are a blessing. A dollar to unlock and 15 cents a minute is definitely affordable by most college students. Moreover, if you’re looking to get some side income, becoming a “charger” for these scooters is easy. All you have to do is find these bikes and charge them in your garage for 5–20 dollars per bike. In the morning, drop them off to a given location and you’re done. It’ll be interesting to see how this trend pans out, I for one, am eager to find out if these companies are destined to become unicorns or just another viral trend which meets a swift end.
Written by Srivats Agarwal
Emory Entrepreneurship & Venture Management | HackATL Associate
