The popular electric scooter in the United States, how to repeat the defeat of ofo

In 2017, when the domestic bicycle sharing market was in full swing, electric scooters, electric bicycles and shared bicycles began to appear in major cities on the other side of the ocean. Anyone only needs to turn on their mobile phone and scan the two-dimensional image on the handlebar. code to unlock.

This year, Chinese Bao Zhoujia and Sun Weiyao founded LimeBike (later renamed Lime) in Silicon Valley, providing sharing services for dockless bicycles, electric bicycles and electric scooters, and received more than 300 million US dollars in less than a year. Financing, a valuation of $1.1 billion, and rapid expansion to California, Florida, Washington…

At about the same time, Bird, founded by former Lyft and Uber executive Travis VanderZanden, also moved its shared electric scooters to the streets of the city and completed 4 rounds of financing in less than a year, with a total amount of over 400 million US dollars, which not only became a The “unicorn”, which was the fastest to reach a valuation of $1 billion at the time, reached an astonishing valuation of $2 billion in June 2018.

This is a crazy story in Silicon Valley. In the vision of the future of shared travel, electric scooters and two-wheeled electric vehicles that solve the “last mile” problem have become the favorites of investors.

In the past five years, investors have invested more than 5 billion US dollars in European and American “micro-mobility” companies – this is the golden age of overseas shared electric vehicles.

Every week, the shared electric scooter brands represented by Lime, Bird and other brands will add thousands of electric scooters and promote them on social media like crazy.

Lime, Bird, Spin, Link, Lyft… These names and their electric scooters not only occupy prominent positions in the streets, but also occupy the front pages of major investment institutions. However, after the sudden epidemic, these former unicorns had to face the tragic market baptism.

Bird, which was once valued at US$2.3 billion, was merged and listed through a SPAC. Today, the stock price is less than 50 cents and the valuation is only US$135 million, showing a situation of upside-down in the primary and secondary markets ; while Lime, known as the world’s largest shared electric scooter operator, The valuation once reached US$2.4 billion, but the valuation continued to shrink in subsequent financings, falling to US$510 million, a 79% reduction. After announcing that it would be listed in 2022, it has now cautiously chosen to continue to wait.

Obviously, the once sexy and seductive shared travel stories have become less lovable. How enthusiastic investors and media were at the beginning, how disgusting they are now.

Behind all this, what happened to the “micro travel” service represented by electric scooters overseas?


Bird Electric Scooter|Bird

The sexy story of the “last mile”

China’s supply chain + shared travel + overseas capital market, this is an important reason why overseas investors were initially crazy about the shared travel market.

In the shared bicycle war that was in full swing in China, overseas capital sensed the business opportunities contained therein and found suitable targets.

In the United States, participants represented by Lime and Bird have found a “three-piece travel set” centered on dockless bicycles, electric bicycles and electric scooters to meet the short-distance travel needs of different users. A perfect solution.

Sun Weiyao, founder of Lime, mentioned in an interview: “The turnover rate of electric scooters is very high, and people often make an appointment to use them before they “touch the ground”. In areas with high population density, the utilization rate of scooters is high. When traveling long distances, people are more inclined to choose electric vehicles; people who like sports in cities are more willing to use shared bicycles.”

“In terms of cost recovery, electric products are more advantageous. Because users are more willing to pay more to enjoy a better product experience, but the cost of the product is also higher, such as the need to replace the battery or charge.”

In the blueprint conceived by the unicorns, the core of the C position is actually an electric scooter, not only because of its small footprint, fast speed, and convenient control, but also because of the added value brought by its technological and environmental attributes.

Data show that the proportion of post-90s drivers in the US holding a driver’s license has dropped from 91% in the 1980s to 77% in 2014. The existence of a large number of car-free people, coupled with the low-carbon model advocated by shared electric scooters, also conforms to the background of the era of the rise of the environmental protection movement in the new millennium.

The “blessing” from China’s manufacturing industry has become another important reason for “ripening” these overseas platforms.

In fact, the electric scooters originally used by companies such as Bird and Lime were mainly from Chinese companies. These products not only have price advantages, but also faster product customization and a relatively large industrial chain ecology. Product upgrades provide good support.

Taking Lime as an example, it took three years from the first generation of scooter products to the launch of the fourth generation of scooter products, but the first two generations of products were built by domestic companies. Relying on China’s mature supply chain system.

In order to make the story of the “last mile” more warm, Lime and Bird also used some platform “wisdom”.

In some places, Lime and Bird users can directly take their outdoor electric scooters home, charge these scooters at night, and then return them to designated areas in the morning, so that the platform will pay users a certain amount of compensation, And to solve the problem of random parking of electric scooters.

However, similar to the domestic situation, various problems have also occurred in the promotion of shared electric scooters in the United States and Europe. For example, many scooters are placed on sidewalks or parking entrances without management, which affects the normal travel of pedestrians. There were complaints from some local people. There are also some people riding scooters on the sidewalk, which threatens the safety of pedestrians.

These problems are not fatal, but with a sudden epidemic, the former unicorns encountered even greater trouble.


Bird launches scooter in Rome, “going to sea” was once the only way for micro-mobility unicorns|Wikimedia

Unicorn “infected” with the new crown

Due to the arrival of the epidemic, the global transportation field has been greatly affected. Even the shared electric scooters, which mainly solve the last mile, have encountered unprecedented difficulties.

This borderless impact lasted for three years and also greatly affected the business of these mobility platforms.

As a solution for the “last mile” in the travel process, people usually use products from platforms such as Lime and Bird while taking subways and buses .

According to data from City Lab last spring, the number of public transit passengers in major cities in Europe, America and China has plummeted by 50-90%; the northern subway commuter system in the New York area alone has decreased by 95%; the Bay Area Rapid Transit in Northern California System ridership decreased by 93% in one month.

At this time, the rapid decline in the usage rate of the “transportation three-piece” products launched by Lime and Bird became inevitable.

In addition, whether it is electric scooters, electric bicycles or bicycles, these travel tools that use a shared mode, the virus problem in the epidemic has brought people a deeper concern, and users cannot rest assured to touch the car that others have just touched. .

According to a McKinsey survey, whether it is for business or personal travel, “fear of contracting the virus on shared facilities” has become the main reason why people refuse to use micro-transportation.

This decline in activity directly affects the revenue of all companies.

In the fall of 2020, after reaching the milestone of 200 million passengers worldwide, Lime told investors that the company would achieve positive cash flow and positive free cash flow for the first time in the third quarter of that year, and would be profitable for all of 2021.

However, with the escalation of the global impact of the epidemic, the subsequent business situation has not improved.

According to the research report, using each shared electric scooter less than four times a day will make the operator financially unsustainable (i.e. user fees cannot cover the operating cost of each bicycle).


Bird costs, charging, repairs and credit card payments top the list of costs reported by The Information|CrunchBase

According to The Infomation, in 2018, Bird’s electric scooters were used an average of five times a day, and users paid an average of $3.65. The Bird team told investors that the company is on track to generate $65 million in annual revenue with a gross profit margin of 19%.

A gross margin of 19% looks good, but it means that after paying for charging, repairs, payments, insurance, etc., Bird still needs to use the remaining $12 million to pay for office leases and staff operating expenses.

Bird’s 2020 revenue was $78 million, with a net loss of more than $200 million, according to the latest figures.

In addition, the operating cost superimposed on this has further increased: on the one hand, the operating platform is not only responsible for charging and maintaining products, but also sterilizing them to ensure their hygiene; on the other hand, these products are not for sharing. The design is therefore prone to failures. These problems are not common in the initial stage of the platform, but as more and more cities are deployed, such situations are more common.

“Usually our consumer-grade electric scooters have a life span of 3 months to half a year, while the life expectancy of shared electric scooters is about 15 months, which puts forward higher requirements for products.” A person engaged in related manufacturing industries According to experts from the company, although the products of these unicorn companies gradually transition to self-built vehicles in the later stage, it is still difficult to quickly reduce the cost, which is one of the reasons why they frequently raise funds but are still not profitable.

Of course, the predicament of low industry barriers still exists. As the industry leaders, platforms such as Lime and Bird have certain capital and platform advantages, but the products do not have an absolute leading experience. Users experience product experience on different platforms. It is interchangeable, and there is no one who is the best and the worst. In this case, it is easy for users to change the service because of the number of cars.

It’s hard to make huge profits in transportation services, and historically, the only really consistently profitable companies are automakers.

And platforms based on rental electric scooters, electric bicycles, and shared bicycles can only gain a firm foothold and develop healthily with stable and large user traffic. Investors and platforms do not see such hope in the short term before the epidemic is over.


When electric scooters expand, it is inevitable to have disputes with local municipal regulations|LA Times

“Old Man” of the Golden Age

In early April 2018, Meituan acquired Mobike with a total investment of US$2.7 billion, symbolizing the basic end of the domestic “bike-sharing war”.

The shared bicycle war, derived from the “online car-hailing war”, can be said to be another iconic battle in the capital frenzy period. Spending money and subscribing to occupy the market, the merger of the industry leaders and the second, and completely monopolizing the market, was the most mature routine of the domestic Internet at that time, and there was no one.

In the state at the time, entrepreneurs did not need and could not calculate the revenue and input-output ratio at all. It is said that the Mobike team made a post-mortem review, and the company lost a lot of money, just after receiving a large amount of investment and starting to launch the “monthly card” service. After that, exchanging losses for the market was out of control.

Regardless of whether it is an online car-hailing or a shared bicycle, transportation services have always been a labor-intensive industry with thin profits. Only the operation of the platform can be truly profitable. However, with the crazy boost of capital, entrepreneurs on the track will inevitably enter the “battle of involution”.

In this sense, electric scooters in Europe and the United States can be said to be similar to shared bicycles, and belong to the “golden age” of hot money from venture capital everywhere . At the moment of capital crunch, prudent investors pay more attention to revenue data and input-output ratio. At this time, the fall of the once-shared electric scooter unicorn is an inevitable end.

Today, when the world is gradually adapting to the epidemic and life is gradually recovering, the demand for the “last mile” in the field of transportation still exists.

McKinsey conducted a survey of more than 7,000 people in 7 major regions around the world after the outbreak and found that as the world returns to normal, people’s tendency to use privately owned micro-transportation in the next stage will increase by 9% compared with the pre-epidemic period. The propensity to use the shared version of microtransportation increased by 12%.

Obviously, there are signs of recovery in the field of micro-mobility, but it is very difficult to say whether the future hope belongs to electric scooters.

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