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How is such a business even remotely profitable? Such scooter will cost a few hundred bucks. They're easy to store and drag into the house. Even in a small room

How is such a business even remotely profitable? Such scooter will cost a few hundred bucks. They're easy to store and drag into the house. Even in a small room in a densely populated city, there is not much nuisance in owning one. Furthermore, these things get cheaper by the year; further calving off any rental market. Genuinely interested in how such business is able to make a dime.

ttul 9y ago
“Our fund has too much cash. What can we invest it in? These software startups don’t need much capital....” “I know. Scooters. They cost money, right? And it’ll need a ton of marketing!”
- deleted 9y ago
  [deleted]
- trevyn 9y ago
  These scooters really market themselves, which anyone in a served region can attest to. They’re everywhere.
brandall10 9y ago
In the course of the last month a few different electric scooters have descended on downtown San Diego, this being one of them. I dunno, they're all over the place and people seem to love them. For getting around a city center they're more convenient to rent simply because most of your destinations won't have a good solution for storage. You can pull up right to where you want to go and when you're ready to leave can usually find another one within a block or two.
- BMFX 9y ago
  I was surprised to see them here in SD. Westwood over by UCLA they are everywhere, and by everywhere I mean being ridden. Didn't think it'd be such a success outside of the college areas but it appears to really be picking up.
ndaiger 9y ago
They're not really that cheap to rent, although they're competitive with bike share prices. If you, say, used one to get to & from work on a commute of a few miles you'd break even on buying your own scooter pretty quickly. The big advantage is not having to deal with storing or charging the scooter, ever. In Santa Monica & Venice there is usually a Bird or two within a block of you at all times.
tristanj 9y ago
They don't make money. Ridesharing subsidies are like uber/lyft's but on an even bigger scale. In china, Mobike charges $1.58 per month for unlimited* trips on their ridesharing bikes. Given how their bikes cost ~$100 each, and how they operate millions of bikes, they are losing massive amounts of money. Investors have the same mentality (once we are a monopoly, we can charge more) but until then they are incinerating cash. *Mobike rides have the first 2 hours of each trip free. If you stay on longer you need to pay. However, you can just switch bikes after 2 hours to avoid the fee.
- PakG1 9y ago
  Mobike rides have the first 2 hours of each trip free. If you stay on longer you need to pay. However, you can just switch bikes after 2 hours to avoid the fee. That hasn't been my experience with Mobike. When I had a paid membership, I got 2 hours cumulative for free over a month. Didn't matter how many different bikes I used, it was cumulative. Once that was up, then I'd be charged additional fees. I wonder how much money Mobike makes from people who forget to lock their bikes. I've given them something like ~$50 so far because I keep forgetting to lock my bike and then don't notice until later after someone has been riding my rented bike for free for a number of hours. Once I realize what happened, I notify them, and then they lock down my account and won't unlock it until I pay up the racked up fees.
  - tristanj 9y ago
    >When I had a paid membership, I got 2 hours cumulative for free over a month. Maybe you are thinking of a different promo? Here’s the one I’m thinking of https://mobike.com/sg/blog/post/mobike-pass https://mobike.com/sg/blog/post/mobike-pass This promo is for Singapore, it’s the same promo as China just in English. In this promo Mobike is offering unlimited free rides (<2hrs) with no deposit for $0.63/month. It says you can switch bikes to reset the time. They are running this far below cost. I can’t see how Mobike makes any profit off this.
    - PakG1 9y ago
      I'm thinking of promos that I purchased and used myself in Shenzhen.
whoisjuan 9y ago
I have put some thought into this. Particularly the bike business. Making money out of the bikes isn't hard. These bikes are super freaking cheap: 75 USD - 90 USD for a Bike (https://m.alibaba.com/product/60710077310/export-EU-standard-alloy-rental-bike.html?spm=a2706.7843299.1998817009.6.4mwUPc https://m.alibaba.com/product/60710077310/export-EU-standard...) 1 USD - 25 USD for the remote lock (https://m.alibaba.com/product/60623794401/GPRS-Bluetooth-Choosing-Freely-Remote-Control.html?spm=a2706.7843299.1998817009.6.IgPQeV https://m.alibaba.com/product/60623794401/GPRS-Bluetooth-Cho...) At this scale I wouldn't be surprised that they could get a whole painted bike + the lock + all the importation costs and taxes for 100 USD (maybe even less). One ride costs 1 USD... That means they just need 100 rides to break even on a bike... If they get an average of 1 ride per bike in all their fleet (which is low imo), they just need 100 days of operation to break even on all their fleet. (These calculations don't take into account the operational costs, but you get the idea. As you grow and start creating more network effects and gaining economies of scales these costs will only grow linearly). According to Seattle City Data, the average ride per bike here is something around 0.6 rides per bike (daily). That would likely improve again once it starts warming up. Now regarding the Scooters, you could do a similar analysis. I was able to find foldable electric scooters at very cheap prices in bulk (45 USD, 80 USD, 70 USD, 120 USD, etc...). So it's also technically possible to break even very fast with scooters as well -> https://www.alibaba.com/trade/search?fsb=y&IndexArea=product_en&CatId=&SearchText=electric+scooter https://www.alibaba.com/trade/search?fsb=y&IndexArea=product... Finally, there are more angles to a business like this. There's a huge component which is gov subsidies. Local governments love this crap and I can totally see them paying these companies for providing a reliable alternative transportation. Another angle is just plain cheap advertising. You can basically wrap these crappy bikes and scooters with ad decals. You could also monetize based on geo-location and sell contextual ads as well as selling the data to brands. You also made other good points like why wouldn't someone simply buy a scooter. What's appealing about this model is that you can just leave it anywhere. You don't have to get worried about this thing getting charged, or someone robbing it or vandalizing it. You use it when you need it and you continue with your life. Owning one adds an incredible amount of burden to something as mundane as moving from point A to point B.
- lev99 9y ago
paxys 9y ago
Even the business model of getting people to try them for a while before they move on to owning their own is probably a profitable one.
dpiers 9y ago
One scooter could easily have 5-10 trips per day. At $2/trip, the payback period on a $400 scooter is 20-40 days. The economics here (and with dockless bikes) are quite impressive, which is why billions of dollars has been dumped into dockless electric personal transportation companies over the last few years. The bigger question here is whether people will adopt scooters when they are more comfortable on bikes.
- bufferoverflow 9y ago
  Your math assumes zero operational costs and near 100% use rate of every scooter. What about damage, theft, liability, staff, IT, amortization costs?
  - TomMarius 9y ago
    Yes, that pushes it to... let's say a year. Still impressive, IMHO.
    - bufferoverflow 9y ago
      Why "let's say a year" and not 50 years? Or never? You just made a number up without knowing any operating costs.
      - TomMarius 9y ago
        I made an educated guess. "Never" might happen just as well as 1 year, but it's unlikely considering other similar companies (we can't measure business skills of the operator); also we're talking about how it'd be if the business is a success. 1 year is more likely than 1 month; 50 years is extremely improbable (this business will probably either succeed or fail within just a few years, again, considering other similar companies).
walshemj 9y ago
And don't you need a helmet and do you need a separate test /licence in the USA? In the UK any one who got their driving licence after 2001 must pass the CBT before they can ride a scoter and that's limited to 50cc
- iheartmemcache 9y ago
  This will vary from state to state, but in MA anyone who holds a class D (i.e. standard consumer vehicle) license is also allowed to ride any moped that's 49cc or below. I think there's now a yearly registration fee[1] that the owner must pay. So, for example, if I have a moped in good standing with the state, anyone with a valid drivers license is allowed to borrow it and legally ride it[2]. ===== [1] I want to say I paid something like ~30 USD, but this was ~10 years ago. Unlike a standard vehicle, however, there is no inspection check pre-requisite for safety nor emissions. I think the fee is purely for tags. Helmets are definitely a requirement though. [2] AFAIK there are no additional insurance requirements though. There weren't any ~10 year ago when I one, but I can't remember if that's because my comprehensive car insurance did double-duty in the event were I to, say, hit a pedestrian in a crosswalk and they were to sustain damage.
  - deleted 9y ago
    [deleted]
- Balero 9y ago
  These are motorised 'foot propelled' scooters, not small scale motorbikes. I don't know if these (and electric skateboards) are properly covered by UK law.

ttul 9y ago

“Our fund has too much cash. What can we invest it in? These software startups don’t need much capital....” “I know. Scooters. They cost money, right? And it’ll need a ton of marketing!”

deleted 9y ago
[deleted]
trevyn 9y ago
These scooters really market themselves, which anyone in a served region can attest to. They’re everywhere.

brandall10 9y ago

In the course of the last month a few different electric scooters have descended on downtown San Diego, this being one of them. I dunno, they're all over the place and people seem to love them. For getting around a city center they're more convenient to rent simply because most of your destinations won't have a good solution for storage. You can pull up right to where you want to go and when you're ready to leave can usually find another one within a block or two.

BMFX 9y ago
I was surprised to see them here in SD. Westwood over by UCLA they are everywhere, and by everywhere I mean being ridden. Didn't think it'd be such a success outside of the college areas but it appears to really be picking up.

ndaiger 9y ago

They're not really that cheap to rent, although they're competitive with bike share prices. If you, say, used one to get to & from work on a commute of a few miles you'd break even on buying your own scooter pretty quickly. The big advantage is not having to deal with storing or charging the scooter, ever. In Santa Monica & Venice there is usually a Bird or two within a block of you at all times.

tristanj 9y ago

They don't make money. Ridesharing subsidies are like uber/lyft's but on an even bigger scale. In china, Mobike charges $1.58 per month for unlimited* trips on their ridesharing bikes. Given how their bikes cost ~$100 each, and how they operate millions of bikes, they are losing massive amounts of money. Investors have the same mentality (once we are a monopoly, we can charge more) but until then they are incinerating cash. *Mobike rides have the first 2 hours of each trip free. If you stay on longer you need to pay. However, you can just switch bikes after 2 hours to avoid the fee.

PakG1 9y ago
Mobike rides have the first 2 hours of each trip free. If you stay on longer you need to pay. However, you can just switch bikes after 2 hours to avoid the fee. That hasn't been my experience with Mobike. When I had a paid membership, I got 2 hours cumulative for free over a month. Didn't matter how many different bikes I used, it was cumulative. Once that was up, then I'd be charged additional fees. I wonder how much money Mobike makes from people who forget to lock their bikes. I've given them something like ~$50 so far because I keep forgetting to lock my bike and then don't notice until later after someone has been riding my rented bike for free for a number of hours. Once I realize what happened, I notify them, and then they lock down my account and won't unlock it until I pay up the racked up fees.
- tristanj 9y ago
  >When I had a paid membership, I got 2 hours cumulative for free over a month. Maybe you are thinking of a different promo? Here’s the one I’m thinking of https://mobike.com/sg/blog/post/mobike-pass https://mobike.com/sg/blog/post/mobike-pass This promo is for Singapore, it’s the same promo as China just in English. In this promo Mobike is offering unlimited free rides (<2hrs) with no deposit for $0.63/month. It says you can switch bikes to reset the time. They are running this far below cost. I can’t see how Mobike makes any profit off this.
  - PakG1 9y ago
    I'm thinking of promos that I purchased and used myself in Shenzhen.

whoisjuan 9y ago

I have put some thought into this. Particularly the bike business. Making money out of the bikes isn't hard. These bikes are super freaking cheap: 75 USD - 90 USD for a Bike (https://m.alibaba.com/product/60710077310/export-EU-standard-alloy-rental-bike.html?spm=a2706.7843299.1998817009.6.4mwUPc https://m.alibaba.com/product/60710077310/export-EU-standard...) 1 USD - 25 USD for the remote lock (https://m.alibaba.com/product/60623794401/GPRS-Bluetooth-Choosing-Freely-Remote-Control.html?spm=a2706.7843299.1998817009.6.IgPQeV https://m.alibaba.com/product/60623794401/GPRS-Bluetooth-Cho...) At this scale I wouldn't be surprised that they could get a whole painted bike + the lock + all the importation costs and taxes for 100 USD (maybe even less). One ride costs 1 USD... That means they just need 100 rides to break even on a bike... If they get an average of 1 ride per bike in all their fleet (which is low imo), they just need 100 days of operation to break even on all their fleet. (These calculations don't take into account the operational costs, but you get the idea. As you grow and start creating more network effects and gaining economies of scales these costs will only grow linearly). According to Seattle City Data, the average ride per bike here is something around 0.6 rides per bike (daily). That would likely improve again once it starts warming up. Now regarding the Scooters, you could do a similar analysis. I was able to find foldable electric scooters at very cheap prices in bulk (45 USD, 80 USD, 70 USD, 120 USD, etc...). So it's also technically possible to break even very fast with scooters as well -> https://www.alibaba.com/trade/search?fsb=y&IndexArea=product_en&CatId=&SearchText=electric+scooter https://www.alibaba.com/trade/search?fsb=y&IndexArea=product... Finally, there are more angles to a business like this. There's a huge component which is gov subsidies. Local governments love this crap and I can totally see them paying these companies for providing a reliable alternative transportation. Another angle is just plain cheap advertising. You can basically wrap these crappy bikes and scooters with ad decals. You could also monetize based on geo-location and sell contextual ads as well as selling the data to brands. You also made other good points like why wouldn't someone simply buy a scooter. What's appealing about this model is that you can just leave it anywhere. You don't have to get worried about this thing getting charged, or someone robbing it or vandalizing it. You use it when you need it and you continue with your life. Owning one adds an incredible amount of burden to something as mundane as moving from point A to point B.

lev99 9y ago

paxys 9y ago

Even the business model of getting people to try them for a while before they move on to owning their own is probably a profitable one.

dpiers 9y ago

One scooter could easily have 5-10 trips per day. At $2/trip, the payback period on a $400 scooter is 20-40 days. The economics here (and with dockless bikes) are quite impressive, which is why billions of dollars has been dumped into dockless electric personal transportation companies over the last few years. The bigger question here is whether people will adopt scooters when they are more comfortable on bikes.

bufferoverflow 9y ago
Your math assumes zero operational costs and near 100% use rate of every scooter. What about damage, theft, liability, staff, IT, amortization costs?
- TomMarius 9y ago
  Yes, that pushes it to... let's say a year. Still impressive, IMHO.
  - bufferoverflow 9y ago
    Why "let's say a year" and not 50 years? Or never? You just made a number up without knowing any operating costs.
    - TomMarius 9y ago
      I made an educated guess. "Never" might happen just as well as 1 year, but it's unlikely considering other similar companies (we can't measure business skills of the operator); also we're talking about how it'd be if the business is a success. 1 year is more likely than 1 month; 50 years is extremely improbable (this business will probably either succeed or fail within just a few years, again, considering other similar companies).

walshemj 9y ago

And don't you need a helmet and do you need a separate test /licence in the USA? In the UK any one who got their driving licence after 2001 must pass the CBT before they can ride a scoter and that's limited to 50cc

iheartmemcache 9y ago
This will vary from state to state, but in MA anyone who holds a class D (i.e. standard consumer vehicle) license is also allowed to ride any moped that's 49cc or below. I think there's now a yearly registration fee[1] that the owner must pay. So, for example, if I have a moped in good standing with the state, anyone with a valid drivers license is allowed to borrow it and legally ride it[2]. ===== [1] I want to say I paid something like ~30 USD, but this was ~10 years ago. Unlike a standard vehicle, however, there is no inspection check pre-requisite for safety nor emissions. I think the fee is purely for tags. Helmets are definitely a requirement though. [2] AFAIK there are no additional insurance requirements though. There weren't any ~10 year ago when I one, but I can't remember if that's because my comprehensive car insurance did double-duty in the event were I to, say, hit a pedestrian in a crosswalk and they were to sustain damage.
- deleted 9y ago
  [deleted]
Balero 9y ago
These are motorised 'foot propelled' scooters, not small scale motorbikes. I don't know if these (and electric skateboards) are properly covered by UK law.