The Weekend Australia Start Up Electric E-Kick Scooters

The Future of Urban Transport has Two Wheels

The US and Europe are Embracing e-bikes and e-scooters

The streets of Beijing are thronged with two-wheel contraptions. Some appear to be conventional petrol mopeds, but as they zoom through red lights at pedestrian crossings their eerie silence and lack of exhaust reveal them as electric. Executives in suits cruise by on electric kick scooters, looking like big kids on their way to school, though travelling much more enthusiastically. Electric bicycles hacked together with a battery strapped to the frame and wired to a back wheel hub containing a motor, crowd the edges of roads.

China’s cities are at the fore-front of a quiet swarm of electric two-wheeled vehicles. Millions now roam their centres. This transformation of urban mobility is also happening in the West, albeit with a notable addition that has yet to take off in China: firms that rent out electric kick scooter. These are taking many American cities by storm and are arriving in Europe.

In the bike-mad Netherlands nearly one in three newly bought bikes last year was electric, up from one in 20 a decade earlier. Commuters, from the sweat-averse to the environmentally conscious are keen. About 40 percent of Dutch e-cyclists use them to replace car journeys. Riding for fun is on the rise too: a best-selling model in Europe last year was the e-mountain bike.

In Germany, 15per cent of new bikes sold in 2016 were electric, with sales up by 13 per cent and exports by 66 per cent compared with 2015. Belgium and France are big markets, too. Whereas exports of regular bikes from China, Taiwan and Vietnam to the EU fell by 15 percent between 2014 and 2016, e-bikes exports more than doubled.

Businesses are joining the ride. One of Germany’s largest electric fleets is owned by Deutsche Post DHL, a logistics giant, and includes about 12,000 e-bikes and e-trikes (three-wheeled ones).

For Consumers the vehicles do not come cheap. They typically cost a couple of thousand euros- more once you add bells and whistles. Hence new businesses are popping up to rent or lease them out. Some of these serve couriers working in the gig economy. Others go after hipster leisure riders. Bike-sharing services are rushing to include them. Nearly a third of Paris’s Velib fleet for example, is electric, though the rollout has been tricky.

For riders in American cities, however, e-scooters may steal the show. Their characteristics fit even more neatly into rental models than e-bikes do. Powered not just by electricity but by volleys of venture money, e-scooters are the latest craze coming out of California. Revenue for some of the firms renting them is increasing o fast as to surprise even seasoned Silicon Valley venture Capitalists. 

Bird Rides a pioneer of the business and not yet a year old, has become a “unicorn” faster than any other American start-up-before it. Its valuation reportedly has reached $US2billion ($2.7bn).

In some places such as Santa Monica, one of the first places where Bird introduced e-scooters, using them to get around has already become a habit. With a few taps on an app riders can unlock them and off they go. Once they have reached their destination they park the scooter at a spot where it can be picked up by another rider. Each ride costs $US1 plus US15c a minute.

Another aspect of the model is that people can make money by charging them. Freelance “bird hunters” pick up scooters with empty batteries and plug them in at home. The start-up pays between $US5 and $US25 per vehicle charged, depending on how hard they are to find (the location of “dead” scooters are shown in another app). Charging mostly happens at night and the vehicle must be back on the street in specified locations before 7am the next day.

That Bird and other firms can outsource this activity explains why they have been able to launch their services so quickly in so many cities.

Hot on Bird’s wheels in Lime, co-founded by Toby Sun, a Chinese entrepreneur, which boasts a similar growth rate and valuation (its chargers are called “juicers”). Launching in Paris this week Lime will beat Bird to Europe.

The spread of e-bikes and e-scooters is likely to be further accelerated in future by ride-hailing giants keen to offer the full range of e-mobility options. In April Uber bought Jump, an e-bike-sharing start-up. And Lyft is said to be on the verge of taking over Motivate, another e-bike firm. Both firms reportedly are interested in renting out e-scooters – as is Ofo, the Chinese pioneer of dockless bike rentals.

On both sides of the Atlantic two-wheeled e-vehicles raise three big questions: how to regulate them, whether their economics work across time; and what happens to the data they generate.

A need for regulation is certainly evident in Amsterdam’s Vondelpark: the morning rush looks like chaos. Cyclists ride in every direction, some ambling slowly, others pedalling furiously. Since e-bikes have been added to the mix the term “granny-pace” has a whole new meaning as riders – often the elderly or parents ferrying children- overtake young riders without breaking a sweat. Crashes are still rare, but their numbers have been rising. In the Netherlands last year, a quarter of bike deaths happened on e-bikes and most of the deceased were over 65.

Regulators have started to react. Since July last year Dutch law distinguishes between e-bikes whose motor allows riders to go slower or faster than 25km/h. The faster ones now need a number plate and riders have to follow the same rules as those of mopeds, such as wearing a helmet and having insurance. Other European countries have introduced similar limits. The city council of Santa Monica decided on Jun 12 to require firms renting e-scooters to text customers if they have been riding unsafely.  

As regulatory problems are worked out, the second big question is coming to the fore: who will make money with e-vehicles and how much? They are certainly good business for their makers.

Many e-bikes are powered by gear from Bosch, a German conglomerate. It only started tinkering with the technology in 2009. Today the firm provides drive units, display and battery packs - the highest margin component – to more than 70 e-bike brands.

The Bosch of e-scooters is Ninebot, a Chinese firm, which also owns Segway, the maker of self-balancing “personal transporters”. Most rental firms started by buying off-the-shelf scooters from the firm, which cost between $US300 and $US400. But Lime, in particular, is increasingly deploying more customised vehicles that are more robust and have a longer battery life.

Yet even e-vehicles with a shorter battery life can bring in good money, particularly e-scooters – which helps to explain the sky-high valuations of Bird and Lime. Both have claimed in pitches to investors that they are able to pay off each scooter within just 10 to 14 days: they bring in more that $US20 a day on average. The revenues they generate across America alone could be huge. If two million get deployed (a low forecast), they could earn nearly $US15bn a year.

The firms that have the broadest offering – those able to provide access to all kinds of modes of transport – are likeliest to win.

As well as e-scooters. Lime also rents out e-bikes and the normal kind of cycle. Some predict that the likes Uber and Lyft will emerge victoriously by subsuming e-vehicle rentals. That raises the question of who will control the data they generate.

Many companies and organisations will have designs on such data. In Santa Monica, Bird and other firms have already agreed to provide the city with information so it can see how often scooters are used and whether poor areas are undeserved.

It is possible that e-scooters could turn out to be a fad and e-bikes prove to be better for many trips. But e-vehicles are sure to become a permanent part of the urban-mobility mix.

And, who knows, e-bikes and e-scooters may evolve further. Work is already under way to make them self-driving (think of a Segway on steroids).

That may eventually bring method to the madness on the way streets of Amsterdam, Beijing and beyond.

*Article is from the Weekend Australian – this is not an original article.