By: Christopher Sirota, CPCU
Pre-COVID-19, all the way back in 2019, The Verge indicated that hopping on an e-scooter wasn't always harmless fun: for example, over the course of a nearly three-month study in Austin, Texas, the Centers for Disease Control and Prevention (CDC) identified 271 people that sustained scooter-related injuries. More recently, in February 2020, a study released by researchers at the University of Texas at San Antonio (UTSA) indicated there were cyber risks as well, like GPS spoofing and denial-of-service attacks.
These concerns may have possibly been eliminated--at least temporarily--due to the COVID-19 crisis, because sheltering in place requirements in many cities around the world have naturally caused a huge decline in the ridership of rental e-scooters. As a result, the future of some e-scooter companies has reportedly been placed into jeopardy.
E-scooters Face Uncertain Future
The Verge has reported that major e-scooter companies, such as Lime and Bird, are having a tough time during the COVID-19 crisis, with demand for rentals dropping by almost 100% in some places. This dynamic has reportedly compelled various e-scooter companies to discontinue offering services given this environment.
Fast Company also has reported that, even before the crisis, many e-scooter companies have been having financial issues, and that going forward, some may need to embrace a public-private relationship, much like some bike sharing programs (e.g. in Washington DC and Chicago), in order to receive subsidies that could enable their survival even past the COVID-19 crisis. By doing so, per the article, e-scooter companies may have to agree to some new requirements in exchange for public funding such as:
- deployments in low income neighborhoods
- discount pricing for low income users
- multiple language apps
- new safety rules
- anti-price gouging rules
Some Cities to the Rescue?
It may not be all bad news during the COVID-19 crisis for e-scooter companies. Mass Transit Magazine has reported that, as of mid-May, Lime and Spin have gradually started returning to one city (Columbus, Ohio), albeit with increased e-scooter sanitizing. As American states and localities are beginning to relax social distancing measures, perhaps other cities will follow suit.
If that is the case, then Tampa Bay may serve as a model for their returns to operation. According to WTSP, although Lime has discontinued its service, Uber, Bird, and Spin continued to operate during the crisis, with the support of the mayor’s office, on the condition that social distancing was maintained. The article highlighted that some of those companies increased the frequency of sanitizing e-scooters and helmets and provided gloves and sanitizer to their staff.
While no cities are currently subsidizing e-scooters services, per The Verge, they may be slowly acknowledging the benefits of hosting an e-scooter service. For example, The Verge notes that:
Cities like Denver, Tampa, and San Francisco have classified e-scooter businesses as essential [during the COVID-19 crisis]. And Portland, which has said it will open up 100 miles of street space, is offering incentives to keep e-scooter sharing in operation. The city announced a unique deal with Spin, in which Portland would temporarily waive daily scooter fees of $0.20 per scooter and $0.25 per trip in exchange for Spin reducing the cost for a ride by 50 percent.
Even overseas, in the United Kingdom (UK), Reuters has reported that there has been an increased appreciation of the potential benefits of micromobility mechanisms, such as e-scooters, to alleviate mass transit crowds and maintain efforts to mitigate pollution that is emitted by cars.
Currently, e-scooters are illegal on public streets in the UK, and the department of transport was reportedly planning to investigate how to safely permit e-scooters in public places via a trial scheduled for 2021; because of the COVID-19 crisis, it has moved that trial to July 2020. Notably, although e-scooters can reportedly travel as fast as 20mph (32km/h), the UK reportedly plans to follow other European countries like Spain, France and Germany and may implement a speed limit of 15.5 mph for safety reasons.
A separate article in Mass Transit Magazine reported that Italy has begun offering to subsidize 70% of a purchase or a subscription related to a bike or an e-scooter in cities with populations greater than 50,000 people.
Actually…Uber and Daimler Seem Optimistic
Although many e-scooter companies may be struggling now, two companies are reportedly confident that e-scooters will be part of the micromobility solution of the future: Uber and Daimler. According to an article in Forbes, Daimler is an investor in the e-scooter service Bolt that still plans to launch in 45 European cities and in Africa this summer. Also, per the article, "Uber invested again in Lime, one of e-scooter sharing’s biggest companies, as part of a $170 million round at the beginning of May ."