Minor Victory: Scooter Companies Abandon Cities Due to Viral Outbreak

Over the last two years, urban landscapes have been marred by a growing number of companies offering street-side scooters for rent. The business model always seemed a little curious, especially as additional players moved into the market. It wasn’t long before plenty of cities had their sidewalks littered with scooters in various states of disrepair and thrill-seekers were using them to dive through traffic, thus frustrating motorists.

They also have to be shared with your neighbors, making them none-too-appeasing in an era where everyone is obsessively washing their hands to avoid the coronavirus. Combine that with cities asking (sometimes demanding) that citizens remain indoors and you can probably guess where this is all going. Scooter providers, already in the delicate position of being “mobility” companies, are reeling things back in.

Though COVID-19 may just be a good excuse. Several of these companies have had issues raising funding and have been forced to cut staff. While there are questions about the sustainability of a business model that charges a pittance for rides but requires constant maintenance and charging of vehicles left on the street, the real issue seems to be their collective focus on growth. Rather than there being one or two big firms competing for market dominance, there were numerous companies trying to expand as quickly as possible. A lot of these new markets probably weren’t viable longterm. But, according to Bloomberg, the coronavirus seems to have accelerated any hardship already coming their way:

Lime’s CEO and co-founder Brad Bao wrote in a blog post on March 21 that the startup is “winding down or pausing” service in all markets but South Korea. Prior to the pandemic, the company operated nearly 120,000 scooters in 30 countries across the Americas and Europe. Bird announced it is removing its fleets in six U.S. cities: Miami and Coral Gables, Fla.; Portland, Ore.; and Sacramento, San Francisco, and San Jose. It had already pulled vehicles from 21 European cities.

Jump, a subsidiary of Uber Technologies Inc., has paused electric bike and scooter rentals in most of its European markets and trimmed the size of its fleets across the U.S. It stopped service entirely in Sacramento at the city’s request. Lyft Inc. has continued to operate its network of mostly docked bikeshare systems in eight U.S. markets. So far, it’s kept dockless scooters available for rent in all urban markets but Miami. Every company with vehicles in circulation said that they have heightened their handlebar sanitation protocols and are encouraging riders to do the same.

That’s far from a comprehensive list of the scooter companies in trouble. None seem to have gone untouched by social distancing measures in urban areas and few went into the health crisis in top shape.

“I think it’s pretty dire,” Emily Castor Warren, a principal and director of policy at the transportation planning firm Nelson\Nygaard and a former director of policy at both Lyft and Lime, told Bloomberg. “If these lockdowns persist, they’re going to have to, at the very least, undertake major layoffs to core teams, because the one cost they can’t bring down to zero is salaries for headcount and real estate for their offices.”

But the doom and gloom is not omnipresent. A few investors are bound to see scooters as a smart way for urbanites to avoid crowding on subway cars and busses. In fact Jump, Lime, Spin, and Wheels are all trying to find ways to partner with local governments and essential service providers through the health crisis. Smaller players may also be able to carve out a portion of the market for themselves as the larger players recede. But that’s assuming the business model for scooter firms is sound and we’re not positive that’s been the case.

[Image: Karl_Sonnenberg/Shutterstock]