VCs squandered billions on scooter startups
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The idea of having a fast, easy, low emission and cheap way to get around short distances in a city without needing a car or having to bring a bike or similar is awesome.
Unfortunately, instead of solving the things citizens disliked about them (sidewalk parking/riding, inexperienced riders, rapid expansion) the companies decided they should just take the Uber approach and bulldoze any opposition with money. This made them a symbol of tech and gentrification for many, a symbol of growth and change for others, and aligned basically everyone in the city against them.
I had a conversation with an ex C-level employee of one of these companies, and there is no way for these devices to offset the environmental impact of production and shipping during the short lifetime of each device. The environmental aspect is a pure lie.
Electric replacements that are cheap and take care of those commutes would seem to be obviously much better. I don't know about any C level exec saying whatever they said, but I'd need a lot more actual information to believe that.
Further, I can't drive, I will never be able to drive, because my vision is shit. I can bike, I enjoy biking, but I can go way faster on a Lyft bike and a way longer distance, it's just radically more convenient - if I need to get across the city to see a friend it's basically the lyft bike or a car.
There is a large auto footprint for each scooter that needs to be serviced, as well as for the people servicing them.
If you live in SF, NYC, or Boston? Sure, they're mainly replacing public transit or walking, but they have a huge impact in the less walkable areas like Austin, San Jose, Seattle, or Los Angeles.
257 Personal car
25 Personal electric bike
5 Personal bike
126 Shared scooter
118 Shared dock-less bike
51 Bus /w high ridership
[0]: https://iopscience.iop.org/article/10.1088/1748-9326/ab2da8
The unmentioned takeaway of this study is how important it is to incentivize improved manufacturing methods that are closer to markets, as well as maintaining existing product (if it's reasonably efficient) to extend service life. Materials, manufacturing, and shipping are responsible for vast CO2 production, largely because there's a strong cost incentive to move that manufacturing to locations with inefficient production and/or loose controls that are far from the product's market. For reducing overall CO2 emissions, improving CO2/KM alone is literally only half of the picture.
Also Even if we deny the carbon-cycle benefits of electric scooters, they probably do have local air-quality benefits.
(I don't have a car or bicycle and never did in this city, but I do walk less now than pre-scooter.)
Unfortunately our cultural and political biases prevent us from making the best choices all too often. We have a big discussion about whether it's ok for these small scooters to exist, but never question the far more damaging status quo.
with the level of organization and resources big business have, meaning years-long organized campaigning and learning what strategies work, it's hard to see how common people who dip in and out of political engagement have a hope against that
It depends in which cities... Where I live they are usually competing with bikes, public transportation, walking and maybe uber as a distant last
It is quite possible for a culture to adapt them in a environmentally friendly way, just as it is possible to adapt e-bikes in an environmentally friendly way. But as long as we prioritize car-access over everything else, it's not going to change.
Scooters may be worse than walking, but they could be a step in the direction of a pollution-free future.
Looked into this a while back, and this isn't really true[1]. Worst case (6m lifespan) emissions from scooters are twice as bad as a passenger car per passenger-kilometer, and best case comparable to a tram (assuming 2y lifetime). Lifetime was the determining factor. Has anything happened in the last couple of years to increase the average life span of these scooters, to change this scenario? Unless average lifetime is 2 years or more, emissions are nowhere near "low".
[1]: https://sci-hub.se/10.1109/e-tems46250.2020.9111817 (In particular fig. 3 and 5).
That said, this generation of micromobility has fallen flat. Any solution that's economically viable will need either dedicated infrastructure or self-driving (so you don't need to send a person after each vehicle), not to mention better safeguards to protect the vehicles themselves (vandalism/theft was the #1 cause of vehicle end of life, and even if you can turn a stolen scooter into a brick, $20 of spare parts is still $20 of spare parts to an addict or anybody else who is sufficiently desparate). All of that is to say that the first company to crack that nut will almost certainly need to work in close partnership with city governments--the Uber model will not work.
Also they reduce(/avoid) congestion, so fewer cars sitting idling, so they also mitigate car emissions. Where is that part of their impact factored in?
Consider the net effect of 100 people using scooters, instead of 100 people using (say) 50-100 cars for rideshares.
PS and of course, essentially zero footprint for parking, so better urban planning.
It is unlikely that there is a 1:1 relationship between number of people that take a scooter instead of car and the actual measured reduction on the road. In fact, I'd bet it is negligible.
Are these two mutually exclusive? They probably would love to solve the problem of sidewalk riding / inexperienced drivers, but that's a very hard problem to solve.
Plus, people are much more used to dealing with bikes than scooters.
The solution you're looking for is a bikesharing service. These have become increasingly more common around my parts (in Germany), and thankfully these are not run by some VC-backed startup, but by actual local companies. That's good news because they integrate with existing public transit passes, so everyone with a tram pass can just swipe the tram pass on a bike and start using it with some pretty generous discounts.
The shortest path to transforming city transportation is protected bike lanes and law enforcement putting in the effort to put bike theft rings (if you have ever passed a pickup with dozens of bikes in the bed, that's a theft ring taking bikes far enough away from where they were stolen to sell them) out of business.
I agree that dockless scooters were always a stretch. I hope if they go away, they'll have been a gateway drug for private ownership of e-scooters.
Any idea what the injury/accident/fatality rates are for scooters vs bicycles?
Those things shouldn't go above 10mph. The tech makes them seem like a bike until anything at all goes wrong, like hitting a small pothole or clipping the corner of a road barrier. Then you're suddenly in mid air above a city street with nothing helping you out.
A bike can handle hitting something small, and has enough of a gyroscopic effect that it doesn't just fall over.
Also, I'm not sure that calling a battery-powered mode of transportation, for distances so short they don't require motors at all, 'low-emission' is adequate.
Sit looking at a scooter on a street in a city, and you'll see perhaps 10,000 people walk past the scooter before one person uses it.
So, in the 'go short distances' market, walking has 99.99% of the market, and the scooter industry has 0.01% market share.
In my view, that's a total failure. Scooter companies should have interviewed each person who walked past a scooter and asked themselves, why didn't that person use our product?
In many cases, it's a combination of cost, friction of setting up an app and account, and fear of something going wrong and being fined (for example, parking the scooter out of the operating zone).
Scooter companies should have solved all those issues. You should be able to use the scooter entirely for free, without an app or any registration, perhaps limited to 10 minutes or 5 mph.
Then, encourage people to pay for more time or more speed when they become accustomed to being able to get around quicker.
I'm going to challenge this hypothesis with what I think are likelier reasons:
1. Many people like walking. I get much less exercise than I actually should, so to be honest the last thing I want to do is replace a short, 10 minute walk in an interesting urban environment with 10 minutes of me not moving
2. Fear of riding a scooter. I have family members who work in hospitals who have seen horrific injuries and deaths from scooters, and who refuse to ride them. Even without this specific fear, my guess is there are a ton of folks who are just uncomfortable riding scooters.
3. Many people walking around in urban environments do so with others, and like the social aspect. It's a lot harder to converse (safely) on a scooter.
If your primary solution is "make them free", I hardly see how that would eventually turn scooters into a profitable business.
https://www.kxan.com/news/cdc-nearly-half-of-injured-austin-...
Then you charge for upgrades, like going faster than walking pace or further than most people would be happy to walk (about 10 minutes in my experience).
> Many people like walking.
People say this... But when there is a convenience store 1 minute away and another one 10 minutes away, most people go to the one 1 minute away, indicating they don't actually like walking just for walkings sake. Even if they did, they probably prefer to 'go for a walk with a friend in a park' independantly to the 'walk to the convenience store to buy some milk'.
I'll clarify - it's not that I "like walking for walking's sake", but if I have to do something anyway (go to lunch, get from a train station to the office, etc.) I prefer to at least take a meager opportunity to try to keep my fat ass from getting any fatter.
I just think it's ludicrous when an article that discusses the extremely poor economics of scooter companies to think the solution is "make it free", even with "upgrades". So now suddenly 90% of your scooter fleet's battery usage is on free trips, and all these scooters now need to be charged again.
I will short term choose convenience but medium term, I have a belief that certain kinds of inconvenience are essential to a good day. Walking or otherwise using my body being a chief example. Also being around people and hard mental work and cooking.
I would add that scooters, as urban means of transportation, require a set of extremely specific variables to be successful, e.g. cities with a degree of walkability that would both enable people to go longer distances, with streets that would accommodate the use of scooters, and where bikes aren't already widely adopted.
Cities in the US aren't usually great for scooters, as most are designed around car usage. In Europe, my perception is that bikes and public transportation (buses, trains), are already better and more convenient than scooters.
Anecdotally, my experience in both the US and Europe is that scooters are mostly aimed at younger people and short term tourists, and in cities with bikes available to the public, there is really no use for them.
Also, these are three of the largest metro areas in the US, and likely the three most walkable cities in the US. Penetration would need to be way higher for the business to actually scale.
Really? There's a motor. So it can go faster, accelerate more quickly, and you can go longer distances.
> Penetration would need to be way higher for the business to actually scale.
Why? If you have those 3 cities you're already dealing with 10s of millions of potential customers.
Rental bikes may also be electric. Madrid does this very effectively.
> If you have those 3 cities you're already dealing with 10s of millions of potential customers
That would be the 100% penetration scenario, which is not realistic by any metric, especially in Boston and NYC where they already have strong and efficient public transportation networks.
SF has Lime scooters and they seem popular. I rode one yesterday.
I have no idea about NYC. It might be too dense at least in Manhattan.
[0] https://www.sweeneymerrigan.com/blog/massachusetts-scooter-l...
Card processing is something you can do on a cheap microcontroller - the only blocker here is EMV certification. I'm sure with all those millions (billions) collectively poured into the industry they could've released a cheap EMV-certified module that can accept payments locally, or failing that, bypass the certification problem by building their own, interoperable system end-to-end so that customers at least just had one app to install.
It reminds me of a company here selling(?) powerbank vending machines - seems like they're still around, at least online (I can't imagine this thing ever making money, but I suspect it was more about "growth & engagement" and resume fodder than building a sustainable business): https://chargedup.theup.co - the problem is that for you to take out a powerbank, you need to install an app on your phone. This automatically excludes the customers whose phone has already died even though they're the most likely to pay for it. I used to see their machine at my local bar for a couple years and I don't recall anyone ever using it. At some point it disappeared and replaced by a competitors' that at least has a built-in card terminal. Still don't recall anyone using it ever, but at least I guess you now technically could if you had no other option.
a) People think Uber is a disgusting company and scooters were associated with that
b) Some people were leaving scooters in bad places and it seemed like companies didn't have a solution to this, which blew (a) up when particularly bad incidents (eg scooter left on muni tracks) would occur
I don't have an anti-tech mentality, I have an anti-externalization-of-costs mentality. If those scooter startups did not have a solution to scooters creating dangerous obstacles on sidewalks, maybe they should not have dumped them there in the first place and left the problem for the locals to figure out.
It was particularly bad because, whenever a new scooter company started operating in our city, it happened by them dumping thousands of the things into the streets overnight without prior warning. I understand that a slow ramp-up is difficult because you need a certain density to make the service viable, but it was all executed very badly without engaging the local community beforehand. It just made the companies come off like a bunch of douchebags dumping their shit all over the city. Like those drunken assholes that throw their empty beer bottles into the sandboxes at the public playground.
anti-tech? No, anti-littering is more like it.
Or not having a helmet and worrying about a fall or accident causing injury.
Your napkin numbers seem pretty wild, and source for how you got to 10,000, even as a reference point?
It's a good way to get people to use your services enough to value it.
That's the real issue at hand here. Scooters are light enough that someone can just buy one and carry it around with them all day. At $5+ a ride, it isn't long before people would rather just buy one of their own.
Bikes are at least large enough to be a hassle to carry around.
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Consider computers (and no, not cloud computers. Like normal office computers). There was a time when timesharing computers was popular, when computers were $100,000.
Similarly, back in high school, one local entrepreneur gave a talk to my school. He explained that 3d printers, while their costs were going down, were still too expensive to own. He predicted 10 years before 3d printers were popular for home labs (and it turns out he was right). In those 10 years, he made money by renting out university-level / research 3d Printers (no one wanted to buy $100,000+ printers anymore, everyone saw the writing on the wall and would rather rent), so the rental company did well, albeit only temporarily. (Overall, the talk was about "risk taking". In this case, the calculated risk that he'd make money before the business opportunity closed as 3d printers became cheaper)
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But these Bird scooters look like they're around $500? If you're using the thing like 2 or 3 times a day, it won't take long at $5 / ride before it makes more sense to just buy one for yourself.
Yes, you can buy a scooter and the raw numbers make sense. But carrying a scooter up and down stairs, through elevators, and so on is a pain in the ass and, you need a place to store it at each destination.
The value in a Bird scooter isn't in the use of the scooter, it's in the non-use of the scooter. Jump on, leave it, jump off.
It’s just mental baggage to own your conveyance (ask any driver how they feel about finding parking in any decently dense area).
If you think you can carry an electric scooter with you around all day… good luck! I struggle to get one up a set of stairs.
That’s not to say that the price isn't wrong, but if the cost was equal between having my own scooter and having access to a rental pool, I would choose the flexibility of the rental pool every time. Having said that, I do think you have overstated the typical costs slightly too with a 15 minute ride costing c$3.
Sure _if_ there’s a scooter nearby _and_ it’s charged… Then there’s the issue of needing a half dozen scooter apps all to use / find a scooter near you. The problem only becomes worse if there’s a group of people… These scooters are mostly just expensive trash laying around cities.
Sure, but these are all relative inconveniences and you have to compare them to the alternative inconvenience/cost of either other forms of transport for your short journey, or lugging a scooter around with you constantly.
That's probably the ultimate inconvenience. You thought you had a ride, but you actually didn't.
I thought they were cool in SF too before the city fucked it all up.
I am sort of sympathetic to arguments that they look kind of janky lying all around. But come on, cars are 1000x times worse! We're just used to it. (And the scooters aren't nearly as deadly as cars -- both for accidents and for emissions.)
The scooter companies tend to be smart too and relocate a bunch for any events. I'll frequently see dozens of scooters and bikes lined up and organized outside of the arena before whatever event gets out.
I recently spent almost a year in a medium sized city in Europe. The first month or two I had a bus pass, but after I had a routine I only used it for one-offs and walked most places. It was very bike friendly so it had space for scooters. If I stayed longer maybe I would have bought a bike. I walked most places, but if I was in a hurry a scooter was the fastest way to get somewhere and I used it at least every few weeks--faster than a bus. I never once thought about buying a scooter. I noticed a few people carrying them inside stores and it seemed so awkward.
I own a car and yet I still Uber and walk. Sometimes you walk somewhere and are too lazy to walk back. Maybe you walk to your friends house and they drive you to a restaurant and now you don’t want to walk all the way back. Tons of use cases where “transit comes to me” is better than “I go to transit” or “I babysit transit”.
Cars ruin cities and are expensive. Scooters are comparably cheap and low impact (visually, physically, acoustically, etc). The issue is that the road system is designed for cars (lanes) and sometimes walkers (sidewalks) and by a rare miracle bikes (bike lanes). Do you drive scooters in the sidewalk (illegal, annoying, likely to get them banned) or in the street (dangerous, bikers all have horror stories, nevermind scooters!) or ambiguity (bike lane?). If we had “alt mobility lanes” for bikes and scooters and one wheels and long boards and all that shit then it’d be so easy.
They also beep at you if you're in the wrong part of the street, and they shut down seemingly randomly with crappy GPS sensors trying to keep you in certain lanes. If I had my own, none of that crap would happen.
(Basing this on a Xiaomi Mi M365 which is one of the most popular ones)
Of course, bicycles have other benefits so I'm not hating on the bike users. But yes, 12kg / 25lbs or so isn't really that big or bulky IMO.
Plus you don't see people carrying around bicycles on their person all day, so i'm not sure why that's the reference for what people will carry.
i don’t get it. i can look out my window from this cafe and watch people on these scooters deciding it’s worth it to them regardless of whether someone on HN can convince you that the trade offs are worthwhile.
i don’t understand what you’re arguing.
Theft. I live in a city where you can expect any portable form of transportation to get stolen, from inside your house's garage at that.
Renting offloads the risk of theft to someone else.
I've had every bike I've owned stolen from inside my house's garage.
I have to sleep at some point.
Though I guess a foldable scooter could just be brought inside the house.
Taking this completely out of context (i.e. I'm not debating the original point, just saying it for the purpose of sparking potential discussion) - this doesn't extend to other industries. In particular, a ton of photography / videography equipment for rent is under $2k.
So the comparison between something you'd need day-to-day and one where you would need to use something only incidentally is where it breaks down and I think that is exactly how it works for those scooters: people that need them every day for the same kind of trip will buy one and the incidental users will rent. But for the economies to make good sense those companies would need a substantial base of regular users.
The lightest of the e scooters come in around 30lbs. They’re not exactly small either. Certainly not easier to drag around than a bike, as you mentioned.
E-scooters are much smaller than bikes in my experience. Bikes are lighter, but the bulk means that you can't take a bike into a typical elevator for example. I know they make some very small city bikes but even the smallest bike seems bigger than a scooter.
I really don't think it is. If you think about it as a rent-or-buy trade off for the "same thing", your reasoning is fine. However I think it's really a transportation trade off, which has a bunch more factors.
NB: I was never optimistic about the scooters per se, I just think this is too limiting a way to view it.
I live in Toronto and there is a rental bike thing with bike docks. The bikes are shockingly heavy, the phone app sucks, but they remain popular. I attribute the success to summertime tourism.
It cost us probably $20 to go 3 blocks. It was not nearly as simple as scan to ride, ride, scan to park.
Scooters-as-a-service can probably be a profitable business worth millions, but you had to be really out of touch to think it could be worth billions.
It’s just no one does because the asymmetric downside of going naked short on companies with low market caps (“uh oh, Uber just bought this company for 10x my strike price because xyz stupid reason”)
If you want to get really complicated you can write puts, but good luck pricing them and finding enough liquidity.
Yeah the problem is liquidity, and the "bespoke" nature of this kind of bet. I can't just stroll into Bird HQ like Christian Bale and ask them to do all the work for me. I only want to risk a few thousand, not millions. Even setting up the deal might cost more than I was willing to risk in the first place.
As someone who has never/will never write a contract, I had the mental block of flipping it vs. buying.
See how they do social housing in Vienna (it's nice).
https://www.huduser.gov/portal/pdredge/pdr_edge_featd_articl...
We're now at a point where rent prices are higher in Columbus Ohio than Tokyo (1). Part of this is probably average apartment sizes being smaller in Tokyo, but still, that seems insane to me.
1 - https://www.numbeo.com/cost-of-living/compare_cities.jsp?cou...
IIRC that was buying housing, not renting. Purchasing housing is subject to speculation in a way that rent is not.
But if you have data that says otherwise, I'd love to see it. The data I can find shows the expected price spike in Japan for buying condos, but no such spike for renting:
Condos - https://japanpropertycentral.com/2013/10/japans-apartment-ma...
Apartments - https://nbakki.hatenablog.com/entry/changes_in_house_rent
That said, I wouldn't be surprised if rents were higher in an economic boom, I just doubt it got as crazy as condo prices did in Tokyo.
Prices have remained reasonable even as the Tokyo metro population continued to increase.
Or we as a society can recognize that all people deserve housing, and that the poor are in most dire need of it. We can build specifically affordable housing, which both accomplishes your goal of "build more housing" while also ensuring that vulnerable people get what they need.
I think there is something to the idea of being a society which cares for those in need, instead of ignoring them and letting market needs serve those with the most money first. Serving those in need not only helps the needy, but it helps all of us center what matters most: our humanity.
Not really. You can't realistically pursue more public housing in the US without major zoning and other building changes anyway, it's just too hard to build anything now, and that includes potential public housing.
You think the NIMBY's who show up at community meetings to shut down both for-profit high-end housing and also 100% affordable housing for seniors are going to hold off on blocking public housing? Without changes that deal with the nosy neighbor problem, we won't get anywhere.
> If you just advocate for building more, you're really just advocating for gentrification and making things harder for the poor.
Nope. This is a common talking point by the left, but it's wrong. If we had more reasonable rents like in Tokyo (compared to similar US major cities), that'd be great for the poor, working class, and middle class.
Now, having renter protections as well would be fantastic, absolutely. I think it's terrible how little protection renters usually have in the states.
The math never made sense. They were too brittle to make the LTV turn profitable. Maybe people were hoping for subsidies?
Practicality-wise, they neither belonged to the sidewalk (too fast) or the road (can't deal with obstacles).
I bet it was a "growth & engagement" situation. The objective was never to build a sustainable business but was instead to build an engineering playground while collecting hefty salaries paid by VCs.
So the vibe of cool cities like Santa Monica were totally ruined by these annoying "micromobility" startups, but also from a business standpoint, the idea also made no sense. All their pivots (in particular: what do you do with used scooters?), fell flat. With that said, I do know folks that worked at Bird (mostly ex-Uber or from the LA tech scene), and they were super smart, motivated, and driven people.
https://www.theatlantic.com/photo/2018/03/bike-share-oversup...
It would at least eradicate theft. Most people would have the same model. You could get a handout instead of having it stolen, and if it was stolen, then that person could get the handout. And the only people claiming them would be the ones using them.
This phenomenon of bikes piling up is literally venture capitalists throwing money at startups (in return for equity) to deploy more and more bikes to outnumber competitors in a hopeless race to monopolize bike sharing. It's literally an exhibit of one of the failure modes of extreme capitalism.
Giving them away, as GGGP suggests, would actually be a departure from capitalism, and perhaps a good one.
Hubris and a lack of pragmatism has a cost. Of course the equity is worthless! If you do small things that don’t scale and poop aren’t profitable, and then scale and still aren’t profitable, there’s nowhere else to go.
These investments of time and fiat never seem to ask, “walk me through the milestones you’ll accomplish to corner the market.” Same with Uber (from their S-1): “We include all passenger vehicle miles and all public transportation miles in all countries globally in our TAM, including those we have yet to enter” eye roll
TLDR The koolaid has a bitter aftertaste.
(tangentially, Uber has spent almost $28B and still isn’t profitable)
You could have motion/orientation sensors to complement the GPS to see if they are moved after the rider parks it. It's far from unsolvable its just that nobody cares or is motivated.
Especially if part of that move to profitability ends up needing to be like european city bike hire schemes where they need docks to avoid theft, reducing availability and adding infrastructure costs.
As a middle-aged dude, I find them quite awkward to navigate and much prefer a car, and I have literally never seen an older person use them. Are people commuting with those? I guess it happens occassionally, but the predominant use case, at least in Germany, seems just-for-fun cruising. Probably not a powerful or frequent enough thing to justify lofty valuations, and given the externalities (cluttering sidewalks, or folks having to fish them out of lakes and rivers) probably a net negative for society, too.
Wouldn't like to see them banned out of principle, but I assume it'd make sense for cities to ask providers for some upfront deposit in case the provider can't ensure proper clean up etc...
Public communication does not need to bring profits, it needs to serve the citizens. If public communication limits need for parking space, limits traffic jams and polution, that's a win.
A number of cities introduced city-wide bike sharing networks that are paid, but subsidized. Sometimes it was more successful, sometimes less, but at least a few cities proved it can work. They can also work with the public transport card, removing the need for an app.
Maybe the same can be applied to scooters? With the current approach they'll disappear in a few years, as their prices are too high, but having to maintain and charge them daily adds a lot of operational costs.
First, I think a lot of people fundamentally misunderstand the mandate of VCs. The firms themselves receive funding from limited partners, who are often very large pools like the California State Pension or Yale University. Those pools are almost all deployed into very low-risk asset classes, like bonds. A very small amount, say like 2-3% is invested in the PE/VC asset class, thereby diversifying and giving that fund some upside plays in their overall portfolio.
Now, because the VCs were given the mandate by their LPs to find home runs and not a bunch of singles and doubles, this changes the logic by which they make their decisions. You may have heard of the pejorative "lifestyle business" in this context, but it's the reason why a lot of small businesses or low-upside startups don't get funded: they just don't have enough TAM to justify a potential home-run outcome.
Second, if we look back to when Bird and Lime blew up, it was still very, very early for these businesses and their breakout trajectory probably didn't look all that dissimilar from other home runs. (Lots of analogues here: how did Clubhouse look in it's early metrics? Probably a lot like Facebook. HQ Trivia probably looked a lot like Zynga's first breakout game.) It's only in hindsight where you're able to look back and see that adoption wasn't what they thought and cities were more adverse to it and so on, but it doesn't mean the investment logic at the time was flawed -- it just means that it didn't work out. Again, any VC will tell you that they'd rather invest 100 times in something with a 1% chance of being Uber than invest in 100 mom-and-pop shops.
I'm sure many people will say "I guess, but it was obvious that they weren't going to make it!", to which I say, yeah, maybe. But it was probably obvious that Uber wasn't going to become Uber until they did; you only need to have in a portfolio to make it because you become A16Z or USV. And if the metrics from the first year look like Uber and the default gameplan is investment-driven, loss-heavy aggressive growth, then it doesn't seem like such a bad bet.
When you peel away the glitz and techie veneer, Uber is a giant cab company. Cab companies can work we know that. They added a single universal dispatcher with a consistent interface for all and added an on demand labor system and found ways to gouge labor, all solid ways to make more money but still a giant cab company.
Scooter companies weren't modifying a known quantity. They were doing something much more out there. Because they're basically mobile vending machine companies who rely on enticing people to modify their locomotive behavior. That being something notoriously hard to do. Just ask urban planners.
So, in this case, you could excuse the investors in Bird and maybe Lime, but it seemed that there were a lot more companies than that.
Also, as a personal aside, I actually enjoy the product a lot. Whenever I visit San Diego or Austin, those scooters make getting around downtown a lot more quick and fun and it's absolutely worth $3 or whatever to do it. I do of course get the point that my personal anecdote does not a plausible unicorn make.
They can afford it.
These are the same billionaires that would never invest in a risk-free venture.
So this was purely risk capital.
As a result, last fall, there were a total of about 25,000 scooters out clogging the streets, enough that the city administration decided to establish a city-wide limit of 8,000 scooters. This spring, the city kicked out all but three services: Voi, Tier, and Bolt.
As a consumer, I like scooters a lot, but market fragmentation was frustrating (one app for every service), and these days you can rarely even find a scooter when you need one. I ended up going back to using my bike.
One point I haven't seen here is the extent to which these things just littered cities; there's something of a "tragedy of the commons" type argument here.
Honestly, I'd be interested in favor of a bigger movement for individuals to hack and "steal" them for keeps.
(Note the quotes around steal, please. I am a lawyer and I do not believe I am inciting an illegal action because I believe there's a very strong legal argument as to their status as mislaid or abandoned property.)
Agreed on the litter. Imagine I own 1000 scooter-sized fake pink flamingos, imagine they contain a bunch of lithium batteries for some reason. I set them out on city-owned property and encourage strangers to take them. Predictably, they get left all over the damn place. Blocking sidewalks and wheelchair ramps, in storm drains, waterways, and dumpsters. Some of them get picked up one way or another, but the rest become hazardous waste litter that cannot go in the normal trash. Who should bear responsibility for cleanup and disposal?
That a city would allow this to happen with no penalty to the owner is a lavish gift of a public (and at times rivalrous) good to a private party.
I think the "you don't own it so you can forget about it after the ride" aspect of Lime/Bird/etc is a bug, not a feature.
Especially as I recall, they were kind of halfway there with the deal where anyone could pick them up and charge them for the company?
But if we're introducing NewThing with new externalities, we should still try to mitigate them. As NewThing becomes ExistingThing, the overton window narrows around norms of its use. The overton window around scooters is still wide open!
If your car is parked illegally, you get ticketed and maybe towed. The threat of enforcement keeps no-parking areas free of cars. (This works in part because cities ticket the _registrant_ of the car -- not the user, who is often impossible to tie to the act.) I think my point is: should we have rules and norms like this around scooters too?
It's exactly these kind of tweaks that are appropriate, not bans.
I agree that they shouldn't be banned; I just also like my idea of helping yourself to a free one if it's clearly been discarded and not taken care of. :)
This stuff must have failed there, but I wonder why it didn't displace a 50 cc motorbike. Storage capacity? Range? Ease of refuel?
For the customer these scooters and bikes are cheaper than the bus at distances of 1 mile and at longer range if you value your own time.
Here’s a better idea: finance individual scooter purchases/leases as a business. Manufacturing will match actual not falsely inflated demand, and people will take better care, not just leave their scooter lying about on sidewalks and crosswalks.
According to some back-of-the-napkin math I did:
- Most items are marked up 16%
- There's a ~$5-15 service fee (that's WITH Instacart+)
- And most of the sources I saw showed that you should tip between 10-20% (which they deserve, given what I've seen of how they're paid).
While I could absolutely see using the service if I was having a party and couldn't leave to pick up some forgotten items, paying $60-80 extra on top of my $200 grocery bill is too rich for my blood.
Their prices are quite high, delivery time is unpredictable (even though their app says 10-15min, sometimes I had to wait 30-40min), and their inventory is limited. I still use them once every 2 months or so, but on a weekly basis I'd just rather go to a local supermarket myself.
The bags of organic Russet were right there, right next to the organic sweet potatoes.
On that same order, the bananas that came were so green that they wouldn't ripen for three weeks. When I've had groceries delivered, issues like this are the rule, not the exception.
There are a lot of VCs just play the sheep and don’t seem to know shit. I’m just curious what happens to bad VCs..
Other than that, venture capital is a high risk investment where 99% of the portfolio is expected to fail so it's not exactly a surprise when it happens. How are you going to prove that an idea was definitely going to be successful or not? If you know that then you should be a VC.
The reality of portfolio theory means they only need a single big win to return all the gains, and the rest is just a reasonable attempt at disqualifying ideas and spending the money on things that might work.
That I understand. I was curious if any VCs been fired by the firm for repeatedly making bad bets. But I guess since in general >1 partner signs up on a deal they share collective responsibility so can't blame a single partner.