Getting There Faster: A Look at the Rise of E-Scooters

If hype and investment dollars could be considered the main determinants of the success of a new technology, then everyone could soon be riding electric kick scooters.

Players including Bird, based in Santa Monica, Calif., and Scoot, Lime and Skip, all based in San Francisco, among many others, have collectively raised hundreds of millions of dollars over the past few years to fund their global expansion efforts.

Bird, for one, announced in October that it had raised $275 million (all figures in U.S. dollars) in Series D funding. The company's valuation is now pegged at $2.75 billion. In February, Lime announced $310 million in Series D financing, raising its valuation to $2.4 billion.

Traditional transportation-oriented companies have gotten in on the action too, with carmaker Ford buying San Francisco-based Spin last year for $100 million. BMW announced in May it will partner with German company Micro to roll out scooters in Europe. In August, Audi said it will launch a foldable scooter-skateboard hybrid next year. (Both BMW and Audi plan to sell their scooters, as opposed to renting them.)

The overall kick scooter market is expected to grow at a compound annual rate of 8.5 per cent to $41 billion by 2030, according to analysis firm Grand View Research.

Scooters on the Rise

The lofty expectations for scooters are based on their rapid rise and proliferation. The first "dockless" scooters — those that can be parked anywhere — began appearing in a handful of U.S. cities in 2017, and they've since expanded to almost every continent.

Canada joined in on the trend this year, with Calgary being the first city to launch an official pilot on its streets in July. It was followed closely by Edmonton and Montreal. Toronto joined the crowd in September.

Providers typically make the electric, rechargeable scooters available to rent via a smartphone app, which detects where scooters are via their embedded GPS units. Users can leave the machines wherever they like once they're done riding.

Companies generally charge around $1 to unlock the scooters, then between 10 and 30 cents a minute.

The benefit of scooters, providers say, revolves around giving users a proverbial "last-mile" transportation option — a quick, easy-to-use, inexpensive and environmentally friendly way of going short distances, particularly in crowded downtown areas.

But the scooter tsunami has provoked criticism from municipalities, safety officials and pedestrians alike.

Numerous cities are struggling to deal with the clutter and obstructions caused by riders leaving scooters on sidewalks.

Some municipalities, including Austin, Tex., and Calgary, have also reported an inordinate number of injuries related to riders either falling or crashing into poles, benches or other sidewalk features.

In Milwaukee, Mayor Tom Barrett in August threatened to cancel the city's pilot project shortly after launch unless riders and providers alike took action to stop scooter riding on sidewalks. Montreal was having similar issues.

The backlash is forcing providers and municipal officials to come up with solutions, including ad campaigns to promote wearing helmets, fines issued to either the companies or riders, and limits on the number of allowed scooters.

Some municipalities, such as Nashville and Toronto, have gone further by issuing or proposing full or partial bans. In September, Toronto's infrastructure and environment committee recommended temporarily banning e-scooters from public property, which would prevent people from parking them on streets or sidewalks.

It's clear that hype and investment alone won't guarantee this particular technology's success. If the trend is to stick, stakeholders will have to find ways to integrate scooters into existing infrastructure and social norms — and decide if the potential benefits are indeed worth the effort of doing so.