E-Scooter Mania

Driverless car hype gives way to e-scooter mania among technorati

Millions of dollars in funding and billions of dollars in valuations have made scooters the next big thing since the last big thing.

by Brandi Vincent 
People ride electric scooters run by Lime and Bird on the Embarcadero in San Francisco on April 13, 2018.David Paul Morris / Bloomberg via Getty Images file

When Michael Ramsey, an analyst for technology research firm Gartner, started in February to put together his 2018 “hype cycle” report for the future of transportation, he had plenty of topics to choose from: electric vehicles, flying cars, 5G, blockchain, and, of course, autonomous vehicles.


But one type of transportation is conspicuously absent from the results of the report: electric scooters.

“At the time, outside of California, these scooters were really not that common,” Ramsey said. “That’s how much has happened.”

As for autonomous vehicles, which have enjoyed years of hype as the next big thing, Ramsey labeled them sliding into “the trough of disillusionment,” which Ramsey described as “when expectations don’t meet the truth.”

In a matter of months, electric scooter startups have gone from tech oddity to global phenomenon. In some cities, hundreds of scooters suddenly showed up on streets from companies including Bird and Lime, leaving municipalities to figure out how to handle the sudden influx of two-wheeled travelers.

The concept behind the scooters is simple: A user can grab any available scooter, unlock it with an app, ride to their destination, and leave the scooter there for someone else to use.

Even by the hyper-growth expectations of Silicon Valley, the rise of scooter companies has been dizzying. Scooters can be found in more than 125 cities in the U.S. and more than 10 across the globe. In the year after their launch, both Lime and Bird said their scooters had been used for more than 10 million rides.

“We’ve seen other companies grow at amazing rates, but this is kind of unprecedented in how fast they were able to get to even a million rides,” said Sunil Paul, founder of one of the original ride-sharing services, Sidecar, which eventually yielded to Uber and Lyft.

Consumer adoption has been met with wave of investment that has made Bird and Lime some of the fastest companies to ever reach a $1 billion valuation — what Silicon Valley calls a “unicorn.” The two companies have raised a total of $882 million in funding since 2017, according to startup tracking platform Crunchbase.


CB Insights

The dizzying rise has surprised even some of the scooter industry stalwarts.

“I definitely believe the valuations are high, even with the growth we are seeing,” Toby Sun, Lime’s co-founder and CEO, said. “But given the traction and opportunity we have to bring our innovation to the world, it’s not too high.”

While companies are still investing in the technology necessary for cars to drive on their own, a growing understanding has emerged that cities full of robot cars remain years away. Now, the technorati are looking to scooters and bike share companies as the way to change municipal transportation and reshape cities through “micro-mobility.”


A Lime electric scooter-sharing serviceA Lime electric scooter-sharing service in Madrid.
Gabriel Bouys / AFP - Getty Images

The concept has even ride-hailing giants Uber and Lyft rushing to catch up. Lyft is testing scooters in Denver, while Uber’s can be found on the streets of Santa Monica, California.

“A year ago, if you heard conversations and conventional wisdom with what’s going to happen with ride-sharing, it was all about autonomous vehicles,” Paul said. “Micro-mobility has kind of upstaged autonomous vehicles as the urgent thing to go get done, the urgent thing that has to be deployed.”

Scooter companies, however, are not without their challenges.

Cities — having learned from growing pains with Uber and Lyft, which also launched with little regard for local regulations — are pushing back against the scooter influx. San Francisco, the epicenter of the scooter boom, issued a temporary ban on scooters in June. Last month, the city granted only two permits for on-demand scooters to operate in the city -- Scoot and Skip, smaller players in the industry. Uber, Lyft, Bird and Lime were among major players that were denied permits. Some parts of Los Angeles have banned scooters, and Denver seized scooters and issued fines before issuing permits under new rules.

Issues with city officials are less of a speed bump than the technological challenges of autonomous vehicles, though scooters don’t tend to fare well with speed bumps.

Scott Kubly, chief program officer in charge of Lime's government relations, previously the director of Seattle’s Department of Transportation, said scooters are serving an immediate need that cities can’t necessarily fill.

“I think the hype is there because scooters are filling a huge gap in transportation, something that is meeting needs for a ton of people,” Kubly said. “There’s a lack of appreciation for how hard it is to implement change as a public servant.”

From relieving traffic congestion to making transportation more affordable, equitable, and greener, Kubly said the disruptive new travel mode can help cities meet policy goals they have had for years.

“We don’t even know right now how transformative a time it actually is,” Kubly said. “When we look back 10 or 15 years from now, we’ll realize how big of a moment this is.”