Reprint from INC
Almost two-thirds of the global population will live in cities by 2050, and moving all those people around presents a massive engineering challenge. Now, a slew of companies are trying to solve the problem of mobility with something unexpected: e-scooters.
When I first reviewed scooter companies last summer, I had no idea the mobility wars would heat up the way they have. But Bird reached a valuation of $2 billion only a few months after I did that review, and ever since, competitors have poured into the market.
Partially because I like entrepreneurship and partially because I like scooters, I tried out the various e-scooter options on the market. Here are my top four, as well as why I think they’ll win the race.
Wheels is the new kid on the block right now, operating in only two cities and with far less funding than competitors. But the company solves a lot of problems plaguing competitors — and I think it has the best option on the market.
First, Wheels offers a small electric bike instead of a scooter. This makes the product more accessible and easier to use, and it also solves a key usability problem: Wheels users can legally ride in the street, which means they don’t have to deal with the huge problem of warped L.A. sidewalks.
The company is also rolling out a unique smart helmet system for safety, which is important in a market where fatalities are becoming more common. Finally, its product is built from modular, replaceable parts, which increases the lifetime of an individual bike. Bird has taken heat already for the short lifespans of its scooters.
That said, Wheels has a huge challenge ahead. The company’s grown to nearly a million rides in only a few months, but compared with competitors, Wheels is severely under-resourced ($37 million in funding compared with Lime’s $765 million). With Bird and Lime both exceeding 10 million rides, that means growth and adoption for Wheels is a dangerously uphill battle.
Jump is something of a hybrid, offering both scooter and bike rentals. The bikes are more traditional than those of Wheels, using a small motor to provide assisted pedaling instead of being fully electric. Jump’s bikes are designed for longevity, with much longer lifespans than Bird’s or Lime’s vehicles (three to five years versus 30 days), and Jump’s newest generation of bikes features a swappable battery.
But the biggest reason Jump could win the mobility wars is that, as of last year, it was acquired by Uber for $200 million. Jump faces the same problem as Wheels in needing to overcome the network effect moat surrounding Bird and Lime. But with full integration into Uber’s preexisting app, Jump has a user acquisition advantage. As with Wheels, the question is how willing existing users will be to make the switch.
Finally, we arrive at the traditional kings of the e-scooter industry: Bird and Lime. I said it in my YouTube review last summer and I’ll say it again now: Lime is the clear winner.
Lime has better customer service, an easier onboarding process, a better user interface, and much less invasive data collection than Bird, and on top of all of that, Lime is cheaper. The two companies are close to tied for rides to date, but Lime has another advantage: nearly twice the capital. Lime has $765 millionin funding compared with Bird’s $415 million, and when combined with the product and usability advantages, I think this makes Lime a clear long-term winner.
But it has its problems. A Quartz exposé found that the average lifespan of a scooter is barely a month, which is both a sustainability and business problem. Lime has also had some PR fiascos with exploding scooters. At the moment, though, Lime is the clear leader.
Plainly, I don’t think Bird will win. But it does have an advantage to stay in the game: a massive network effect moat.
Bird operates in more than 120 cities, has logged more than 10 million rides, and has strong name recognition. Inc. even named it Company of the Year in 2018. The company is well established, and that shouldn’t be underestimated. But, as stated above, I think its product and overall customer experience are inferior to Lime’s.
Even more fundamentally, though, I don’t think a scooter is the best solution to micro-mobility. E-scooters are fun, but they have inherent drawbacks that are difficult to engineer around.
Technically, riders are supposed to use the sidewalk. In most cities, and especially L.A., that means cracked, warped pavement that can send the rider flying. They’re also less versatile: You can’t really take an e-scooter grocery shopping, whereas you can take a bike. And after having personally tested all the options, electric bikes simply offer a better ride: It’s smoother, it gives more control, and it’s less physically demanding.
The battle between these companies shows us how second-mover and third-mover advantage is real but also comes with challenges. New competitors like Wheels have innovated their product to solve a lot of serious problems. But with the fortified positions of established players, growth is an uphill battle, even if the product is better.