When electric scooters first hit the streets of Charlotte in 2018, they were touted as a handy way to get around without a car — faster than walking, cheaper and more fun than Uber.
Today, though, the future of scooter rentals is in doubt. The three scooter companies operating in Charlotte — Bird, Lime and Helbiz — are burning through investors’ cash, pulling out of cities and laying off workers in an attempt to find a profitable business model.
Meanwhile, city figures show that ridership last year fell slightly from 2021. And ridership in each of the last two years was down more than 30% from the first full year of scooters in Charlotte in 2019.
Something has to give, because the struggling scooter companies can’t keep losing money indefinitely.
“The businesses are not working,” says Ali Griswold, a business journalist who writes the newsletter Oversharing, about the sharing economy and urbanism. She says scooter companies represent a “classic Silicon Valley phenomenon” in which they raise lots of venture capital, launch aggressive growth plans “and now, a couple of years down the line, they’re running out of money and they still haven’t figured out how to operate a viable business.”
Consider:
- In November, Bird announced that it might not have enough cash to survive for the next 12 months, though it received a lifeline in December, when it announced a cash infusion and merger with its Canadian sister company. In October, it pulled out of three European countries entirely and said it was winding down operations in dozens of small and mid-sized cities to focus on locations where it sees a “path to fully self-sustainable operations.” Its stock closed Wednesday at 24 cents, down 93% in the last year.
- Last week, Helbiz said it was discontinuing operations in an undisclosed number of its worst-performing markets, after saying this month that it is laying off 15% of its staff. Its stock closed Wednesday at 29 cents, down 94% in the last year.
- Lime, which is a private company and does not disclose financials, said in 2020 that it was laying off 13% of its staff. At the time, tech industry publications reported that the company was seeking “emergency funding” that valued the company at $400 million, down from an earlier valuation of $2.4 billion.
- Spin, another scooter company that used to operate in Charlotte, said last year that it is laying off 25% of its staff and exiting Spain, Portugal and Germany. Its CEO said cities with too much scooter competition “make it difficult to identify a clear path to profitability.”
The scooter business can be challenging: Companies have to navigate a patchwork of local regulations. They have to recharge the scooters and repair damaged ones. There is typically competition with other companies. If they raise their rates, riders could switch to other options, including buying their own e-scooters. In addition, venture capital money that launched and sustained the scooter boom has largely dried up.
When scooters were first introduced in Charlotte, there were worries about safety and about the vehicles blocking businesses and sidewalks. The city quickly crafted regulations to address some of those issues. Transportation planners tend to like scooters, because they are environmentally friendly and provide an additional option for people who want to take short trips.
Higher prices: The scooter companies have recently raised their prices in Charlotte. For the first few years, rentals cost around $1 to unlock, plus 15 cents a minute, so a 10-minute ride would be around $2.50. Now, though, those additional minutes are closer to 50 cents each, so a 10-minute ride today costs around $6. They also typically sell “passes” that include a certain number of minutes: For instance, you can usually buy 60 minutes of unlimited rides for about $13.
Griswold says that despite the scooter companies’ financial struggles, that doesn’t mean there’s no future for scooter rentals. But they might require, for instance, subsidies to stay afloat — much like bike share programs.
“The model in its current form isn’t working,” she says. “And so either prices have to go up, and then it becomes more of a niche service for wealthier users. Or if prices stay the same, someone has to take the loss.”
Ridership not growing
In Charlotte, Bird and Lime are each allowed to operate 600 scooters. Helbiz can have 400. The actual number that the companies place on the streets fluctuates: In November 2022, the most recent month for which figures are available, there were nearly 1,300. Throughout 2022, there were between 977 and 1,337, depending on how many the company made available for rides — in other words, fewer than the 1,600 that are allowed under city regulations. The scooters are mostly in uptown and surrounding neighborhoods, such as South End, Midtown and Plaza-Midwood.
In the first 11 months of 2022, Charlotte riders took about 876,000 scooter trips, according to data provided to the city by scooter companies. That’s about a 1% decrease from 2021 — and 31% less than in 2019.
The city of Charlotte, which regulates scooter companies, declined to make anyone available to discuss scooter trends. In response to written questions, a city spokesman said that “ridership dramatically decreased during the 2020 COVID-19 pandemic but has partially recovered though not to 2019 levels.” He said that was part of a nationwide trend.
Although you can often spot people riding scooters close to uptown, they’re not for everybody.
Charlotte DJ and music producer Charles Gatling, 59, says he has never ridden on an e-scooter before because he feels they aren’t safe.
“It’s the disrespect — running lights, almost running people over. I’ve even seen people intoxicated on them. In my opinion, they should just take them away,” Gatling said.
Nurse Allison Whitley, 35, says she hasn’t ridden an e-scooter in the past six months.
“I used to [ride e-scooters] a lot, but now we want to just walk everywhere,” Whitley said. “It’s weird, because you don’t see them as much anymore.”
Tony Mecia is executive editor of The Charlotte Ledger. Reach him at tony@cltledger.com.