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I live in LA and the scooter situation is starting to get out of hand, at last count we had 5 companies competing in my neighborhood. I think it does solve a ne
by graaben 8y ago
I live in LA and the scooter situation is starting to get out of hand, at last count we had 5 companies competing in my neighborhood. I think it does solve a necessary problem, but there are easily 5+ scooters for every rider now. I fail to see how any of them can get this to profitability soon, let alone all 5.
- jdavis703 8y agoTo put this in perspective, there are about 8 parking spaces for every car in the US [0]. A parking lot costs about $5,000 to $50,000 per space, depending on if it’s a gravel lot vs a parking garage. Yet parking lot operators and rental car companies are still able to make a profit. 0: https://www.nrdc.org/experts/david-b-goldstein/does-every-car-need-8-parking-spaces-ride-sharing-can-save-emissions https://www.nrdc.org/experts/david-b-goldstein/does-every-ca... Edited to remove sarcastic wording.
- ceejayoz 8y agoThat $5-50k is amortized over decades, though. Bird's scooters cost ~$500, probably make under a buck a ride in profits, and I suspect their average lifetime is well under 500 rides.
- shereadsthenews 8y agoLast I heard lime was making $28 over the lifetime of a scooter.
- Whiteskin_Kanye 8y agoIt looks like they are losing money per scooter [0]. I doubt the strong markets make enough to offset the losing ones. [0] https://oversharing.substack.com/p/shared-scooters-dont-last-long https://oversharing.substack.com/p/shared-scooters-dont-last...
- clairity 8y ago$500 is the retail price (that's how much i paid for the xiaomi m365 they used to use). someone estimated that it's ~$300 per scooter, which i find more believable. they are probably (unit) profitable (or operationally cabable of being so), otherwise, they wouldn't have raised a $300MM series C last year.
- ceejayoz 8y agoWe've seen plenty of wildly unprofitable companies make it far past Series C. Lyft is on its 19th round and lost a billion on two billion dollars revenue in 2018.
- pmart123 8y agoAt least you had to build a two-sided network. Without the driver, there literally is no barrier to entry, which is funny when you think about all the future rideshare "profitability" once you have self-driving cars...
- clairity 8y agoyes, but the unit economics probably pencil out, meaning the direct costs of providing the service (distribution, charging, maintenance, and support) are paid for by the revenue. that’s unit profitability. but they’re probably losing money in capital costs and overhead (marketing and the like), so overall unprofitable. lyft was (is) principally both a hedge against uber and a way for VCs that didn’t get into uber (ever or early enough) to make a bet in the space (the top 2-3 companies in a new market usually survive to a decent exit), so profitability wasn’t an important metric for funding (but the probability of surviving to exit very much was).
- joejerryronnie 8y ago>they are probably (unit) profitable (or operationally cabable of being so), otherwise, they wouldn't have raised a $300MM series C last year. Bwahahahaha, wooo, thanks for the laugh, I needed that after a long day!
- Scoundreller 8y ago
- Twirrim 8y agoSomeone discovered shared scooters don't last long, and thus don't make anything even remotely approaching a profit. https://oversharing.substack.com/p/shared-scooters-dont-last-long https://oversharing.substack.com/p/shared-scooters-dont-last...
- pmart123 8y agoWhen a startup is roughly a year old, and its rival just raised $300M, alarm bells should go off in investor's heads, "If both these companies started a year ago, and it only takes $300M to fund the next one, and none of them have IP or even make their own scooter, maybe we shouldn't do this since there are no barriers to entry."
- AndrewKemendo 8y agoonly takes 300M That seems like quite the barrier to me. Also crazy to think that 1/3 of a billion dollars is considered trivial barrier.
- pmart123 8y agohttps://pitchbook.com/news/articles/tiger-global-closes-biggest-venture-fund-of-the-decade https://pitchbook.com/news/articles/tiger-global-closes-bigg... If you throw in NEA's new fund, that's five funds where $300M is less than 10% if they did the whole round, and if the economics are great, a bunch of growth equity funds. It's crazy to me that you'd invest that much without having more data on the unit economics given none of these companies even have an advantage on making the underlying scooter. The more scooters you have and the more market share you have, the faster your bleed money. If the unit economics were great with off the rack scooters, what's to stop Lyft/Uber from adding a scooter option given they already have the demand side of "trying to get somewhere"?
- Twirrim 8y agoI was looking at the figures in that article and was just horrified at the sheer environmental impact of this whole fiasco.
- pmart123 8y agoAlso, some of those are probably empty lots in places like NYC or Chicago where they can be better monetized once the land is rezoned, etc.
- WrtCdEvrydy 8y agoIf people weren't bad actors, I bet you a ride sharing company where you can just get into a car and drive around with it would make big money. Just charge per minute and allow the owner to track the position continuously.
- jimmy1 8y agoHow do you think rental car companies stay in business? You are still liable for the damage to the car if you blatantly abuse it, and you are still liable for property damage or accidents in states that require insurance and insure the driver. This is just a car rental for a shorter amount of time. And in D.C. we had something called ZipCar which was pretty close to that.
- hawaiianbrah 8y agoIs ZipCar no longer in DC? They’re in every state I’ve been to. I assume they’re in all of them.
- jimmy1 8y agoAh sorry if it came out that way, it is I that am no longer in D.C.
- newnewpdro 8y agoWhen I was in the bay area zipcars were consistently driven by some of the worst drivers on the road. It's like tourists in rental cars but worse, since these people often have never owned a car and drive very infrequently. I know people who never drove until their 30s then got a drivers license just to access zipcars. They're exceptionally bad drivers.
- jimmy1 8y agoRight but it doesn't matter if they are bad drivers. They are still liable for damages and any accidents they cause. If you get in a wreck/get a ticket in a ZipCar, it is still your insurance that goes up, and points on your license, and you have to pay the ticket.
- loblollyboy 8y agoThat big lot by the abandoned k-mart in Rockford has a lot of spaces but none of them are within walking distance of the restaurant I’m supposed to meet my friends at in Chicago.
- jdavis703 8y agoIn transit planning the walk shed for transit extends from one mile (that seems to be very optimistic high density east coast planning) to a quarter mile (more realistic in California’s cities) away from the station. By that same metric there should be plenty of parking spaces within a quarter mile of where you’re trying to dine. There’s also likely the parking space you have at home, and the space you have at work (assuming that like most Americans your job offers free parking).
- yumraj 8y agoI've said it before and I'll say it again, the only ones making money and going to make money are the manufacturers in China. VCs, U.S. or otherwise, are simply sending their LPs money there. This is food delivery app, photo sharing app, social media app and so and so forth, all over again.
- gotocake 8y agoIt’s such a bad business model, it has nasty externalities, but people still leap to defend it because they don’t like cars. I think we need to be optimistic about this and accept that a lot of the last few years and probably a few more are all an incredibly expensive lesson as to why regulation exists, burdensome nature and all. Five years ago everything was “Uber for X” and “disruption” and Crytpocurrency. Now... not so much except for the true believers and the sunk costers. So yes, it’s out of hand, it’s inherently unprofitable and cheap Chinese scooters are probably not a net environmental benefit. It’s still one of those things that millions of people apparently need to figure out the hard way.
- microdrum 8y agoSpoke to a (well known) VC who saw the Bird deal and passed... the gaps in the model would have been fairly obvious to any suitably critical person. Namely that Bird and Lime dont unite catchment areas thus the coefficient of the network effect is tiny compared to Uber. Or you could have just looked at—-you know—-actual bike and scooter rental companies. They’re small mom and pop shops. No Hertz for scooters. There’s a reason.
- s17n 8y agoI agree that the economics of scooter sharing are probably fucked but your last argument is like saying "look at cab companies, they're small mom and pop shops, this Uber thing will never take off"
- fourthark 8y agoIs Uber making money yet?
- kakaorka 8y agoIn major metros, yes.
- dvt 8y agoCab companies weren't mom and pop shops, though (at least not in the sense you're getting at). In fact, obtaining a medallion was a substantial investment ($1M+ in some cases[1]). It's not particularly difficult to make the argument that scooters are a niche market at best. [1] http://blogs.reuters.com/felix-salmon/files/2011/10/1021-met-TAXIweb.jpg http://blogs.reuters.com/felix-salmon/files/2011/10/1021-met...
- rasz 8y agoyou reach your own, personal profitability when you lob off your cute startup on to the bigger fool
- jypepin 8y agoLA seems like it has 5+ car for every people too, so I'd rather see more scooters and less cars.