If you’ve been to any big city lately, chances are you’ve noticed something cruising the streets. No, we’re not talking about Segways, bicycles or pedal pubs (though those still seem to have their place in tourist-heavy downtowns).
We’re talking about scooters — electric scooters to be specific. And if you take a look at some of the interest on Wall Street when it comes to the startups that are building this trend, this likely isn’t going to be just some fad.
Why Wall Street Loves the Scooter
If you take a look at the bike sharing model that many cities have adopted, it’s big business. It’s part of the reason why scooter companies such as Lime and Bird have become billion-dollar entities – there’s the potential that these scooters are the next big thing.
Lime and Bird aren’t the only players in the scooter market — two others that you should keep an eye on are Spin and Skip. Though these scooters can be purchased outright, the most popular way they’re used is in a ride-sharing situation, similar to how the bikes have gained popularity in the city. That is, people or tourists can rent the scooters for a ride across town and then just leave it at a docking or drop off station after they’re finished with it.
In big cities like Chicago, San Francisco and New York City, where traffic often comes to a standstill during the morning and afternoon rush hours, renting a scooter is an ideal way to zip through traffic to get to where you need to go – and at just a few dollars per ride. That’s cheaper than a cab or an Uber.
The scooter market hasn’t exactly matured yet, but investors are betting on its future – and they’re hoping that it’s a future that’s widely successful.
Of course, the market also has its fair share of naysayers. They argue that things like varying traffic laws between cities will make widespread adoption difficult. They also argue that a bevy of scooters on the sidewalks are likely to anger walking pedestrians. There’s seasonal issues too. For example, a fleet of scooters in Chicago will likely be only operational during the summer, fall and spring season – not during winter when it’s difficult to ride on snow. And then, of course, there’s the all important aspect of profitability. Will scooters be adopted to the extent that bikes have been in cities? The many who have invested in it say “yes,” but there are certainly those out there that seem to think this is nothing more than a temporary fad.
Are Scooters the New Green Transports?
Electric scooters certainly have their perks. They’re inexpensive to purchase outright, affordable to rent, and they don’t require any fuel to run, which is one of the biggest expenses when it comes to the total cost of ownership of an automobile. That’s why you’ve seen them in the city. For young professionals living in downtown, scooters provide an easy way for them to get to work and around town without breaking the bank for a new car. For tourists, scooters are a unique, fun and affordable way to see the city.
There are some disadvantages to scooters, which will likely limit their widespread use and confine them more to downtown city environments, however. For instance, it doesn’t exactly replace the minivan for families with young children. And there isn’t any trunk space, which can be a prohibiting factor. Finally, scooters don’t have a roof over them, so there are some difficulties when it comes to traveling in the rain or inclement weather conditions.
Is there a market for scooters? Though the future will certainly tell, we’d say that it’s one worth keeping an eye on. Other ride sharing services didn’t explode over night, the likes of Uber and bike sharing in cities took years to mature, expand and turn into the cash cows that they are today. Scooters will likely have to follow a similar path, which is why it’s far too early to either hail this as the next big thing or dismiss it altogether. But one thing is for certain – it is garnering attention, and investors are buying in.
Regards,
Ethan Warrick
Editor
Wealth Authority
