The rideshare scooter craze is a scam, but not against consumers. It’s a scam against globalist investors. Despite the impossibility of its concept working, they’re so invested in the concept of people renting mobility that they can’t help themselves throwing bad money after good, wondering what the magic marketing bullet will turn out to be.
Why do I say impossible? Because their business model competes against WALKING. In urban environments, the only conceivable context for short-range electric vehicles, speed is capped at 10-15 miles per hour if traffic doesn’t make it moot. Which means the typical rider is either using the scooter for 30 minutes or more at a time, in which case it’d be more economical for him to own his own ride, or walking would be just as fast.
(In practice, median ride time is typically around 18min per a Louisville, KY study.)
And no, the typically low-grade scooters we’re talking about here aren’t going to carry either cargo or a fat ass. Let alone up a hill.
I fisk an analysis and then proceed to Usain’s by-way-of-example.
Electric Scooters: The Unit Economics May Spell Trouble
h ttps://ark-invest.com/articles/analyst-research/electric-scooters/
February 19, 2019
ARK’s research suggests that dockless electric scooter companies are not profitable today, primarily because of short-term growing pains that should ameliorate over time.
Charging $1 to unlock scooters and then $0.15 per minute to ride, companies like Bird are generating a healthy $2.43 in revenue per mile, but their costs are roughly $2.55 per mile, well above the $0.53 that we believe will be possible as they scale, as shown below. Lower costs, in turn, could translate either into lower prices for the rider or better margins for the electric scooter companies, perhaps both, sustaining growth and the business model.
Will electric scooter companies actually cut costs while venture capitalists and companies like Uber are subsidizing public joyrides? They will have many ways to contain unit costs, among them: the cost of the scooter hardware, the cost of charging/relocating them, maintenance costs, and credit card fees, as well as higher utilization rates and longer lifespans. The survivors and ultimate winners will cut these costs aggressively, as shown below.
The Information reports that Bird pays roughly $550 per scooter, a surprisingly high price given its scale. Amazon sells the same scooter, sans Bird’s branding and hardware, for $500 to the average Joe. ARK anticipates that over time electric scooter companies will be able to source or manufacture their own scooters for $250, saving $0.34 per mile, as shown above.
Clue One that it’s a scam: no economy of scale. When bulk purchases cost more than retail, that’s evidence of embezzlement.
Not that unit costs are trending downward. Artificially inflated demand for lithium batteries guarantees that, among other issues.
Charging/relocation costs offer even more potential for cost savings. Thanks to the small size of its battery and low electricity prices, the cost to charge a scooter is well below $0.10. Consequently, the “charging” fee effectively is a “relocation” fee, which should drop precipitously once the scooter companies stop their land grabs, consolidate, and scale. Uber drivers looking for a fare, for example, could supplement their income with relocation fees, saving scooter companies up to $1.03 per mile, as shown above.
Unlikely, since most Uber drivers don’t drive trucks.
Segue
Make Money Charging Spin Scooters
h ttps://gigworker.com/spin-scooters/
Spin doesn’t typically allow normal users to earn by charging. Instead, they hire hourly employees in a city to go out, collect scooters, and charge them overnight. In the morning, you’ll take them back out and drop them off around the city. Spin offers its employees reimbursements for mileage, electricity, and cell phone usage.
The pay is hourly, and they cap the amount of shifts you can work in a week, as well as the length of shift.
Because they don’t want you to ever count as a full-timer. Or pay overtime. California legislating against the gig economy was a good idea, the worker exploitation is severe, but of course they used it as an opportunity to coerce union membership and Obamacare signups instead. Worker exploitation continues, but now for government benefit.
Requirements include having a clean driving record and the ability to drive a larger vehicle like a truck, SUV, or van that can carry at least 20 scooters safely.
(You can use your own car if you have that type of vehicle, but for the right candidate, they can also supply a vehicle.)
You also need to be able to lift 40 pounds, and you should have the ability in your home or garage to charge at least 40 scooters every night.
The fire marshal might want a word about using household-scale electrical systems for commercial-scale applications.
They also like tech-savvy people who will know how to use the GPS locator on the app to find scooters every night.
Sound like something you could get into?
Well, no. Driving around town using GPS to locate and retrieve discarded scooters in my personal truck capable of hauling dozens of scooters, to my home for charging dozens of scooters, then re-distributing them before dawn for the morning commute… why not run my own scooter company? Especially if I can undercut the competition by paying retail prices for equipment.
Also, this is Clue Two for a scam. The guys running the show, they outsource everything and don’t lift a finger. They have time only for the financials. Legit companies, the boss/owner knows the work even if he’s no longer in field ops… and the payroll guy works for him, not the other way around.
End segue
Moreover, as scooters move from consumer to commercial quality, maintenance costs should decline, saving roughly $0.19 per mile, while payment aggregation and batching should lower transaction fees for another $0.22 per mile in savings, as shown above.
Increases in quality reducing costs? When your business model is leaving equipment lying around unattended, increases in quality increase the odds of the equipment being stolen or scrapped. The needle being threaded here is enough performance to be valuable, but not enough performance to be illegal, while being cheap enough to either discourage theft or absorb losses.
Longer lifespans and higher utilization round out the sources, with utilization perhaps throwing entrepreneurial expectations for a loop. While headlines feature scooters dumped into lakes or strewn on sidewalks, the cost savings associated with extending the life of a scooter from the current four months to a year yields only $0.24 per mile in savings.
The Louisville study I read claimed one month median, with <5% of scooters remaining functional beyond 60 days. Come on, you’re leaving electrical equipment in the rain and dirt… and those are inflatable tires. Inner city has lots of puncture opportunities.
As for utilization, scooters average roughly five rides per day today which, in theory, could increase substantially, impacting the unit economics favorably. Scooter companies are flooding cities with scooters, perhaps with the assumption that their ubiquity will increase utilization.
Clue Three: the need to manufacture demand.
Citi Bike data, however, does not support that assumption. As scooters invade more public spaces, pedestrians, retail store owners, and others are pushing them out of the way, if not dumping them.
Clue Four: Tragedy of the Commons. When your business model is exploiting public resources.
Although our research suggests that its unit economics could improve markedly, scooter sharing could flail until the excesses in the market dissipate. Perhaps flooding the streets with scooters is a good short-term strategy to increase revenues and attract funding, but it is a poor strategy for the longer term.
And on that note, our feature presentation.
Bolt Mobility has vanished, leaving e-bikes, unanswered calls behind in several US cities
h ttps://techcrunch.com/2022/07/31/bolt-mobility-has-vanished-leaving-e-bikes-unanswered-calls-behind-in-several-us-cities/
By Rebecca Bellan, 31 July 2022
Bolt Mobility, the Miami-based micromobility startup co-founded by Olympic gold medalist Usain Bolt, appears to have vanished without a trace from several of its U.S. markets.
Also co-founded by Ignacio Tzoumas.
Segue
h ttps://www.marketscreener.com/business-leaders/Ignacio-Tzoumas-0MXN12-E/biography/
Tzoumas is Chief Executive Officer for Bolt Mobility Corp., Chief Financial Officer of Fortelus Capital Management LLP, Chief Financial Officer of DPCM Capital, Inc., Chief Financial Officer at Pishevar Family Office LLC and Vice President-Finance for Stara Space.”
Ignacio Tzoumas previously occupied the position of Founding Partner-Quantitative Trading Group at Triton Global Sources, Inc.
A Wall Street wunderkind and the world’s fastest runner teamed up over a shared interest in microtransportation? Or did Ignacio run a scam and rent Usain’s name for the marketing copy?
End segue
In some cases, the departure has been abrupt, leaving cities with abandoned equipment, unanswered calls and emails, and lots of questions.
Clue Five, albeit too late: the sudden flight beyond extradition.
Bolt has stopped operating in at least eight U.S. cities, including Portland, Oregon, Burlington, South Burlington and Winooski in Vermont, Richmond, California and Richmond, Virginia, and St. Augustine, Florida according to city officials. Some city representatives also said they were unable to reach anyone at Bolt, including its CEO Ignacio Tzoumas.
It’s just a vacation. The Maldives are very nice this time of year.
TechCrunch has made multiple attempts to reach Bolt and those who have backed the company. Emails to Bolt’s communications department, several employees and investors went unanswered. Even the customer service line doesn’t appear to be staffed.
Bolt halted its service in Portland on July 1. Because of the company’s failure to provide the city with updated insurance and pay some outstanding fees, Portland subsequently suspended Bolt’s permit to operate there, according to a city spokesperson.
Bolt Mobility (not to be confused with the European transportation super app also named Bolt) was on what appeared to be a growth streak about 18 months ago. The company acquired in January 2021 the assets of Last Mile Holdings, which owned micromobility companies Gotcha and OjO Electric. The purchaser opened up 48 new markets to Bolt Mobility, most of which were smaller cities such as Raleigh, North Carolina, St. Augustine, Florida and Mobile, Alabama.
After purchasing Last Mile’s assets, Bolt agreed to continue as the bike-share vendor in Chittenden County, Vermont, including cities Burlington, South Burlington and Winooski.
That license was even renewed in 2022, said Bryan Davis, senior transportation planner of the county.
A typical story going back to the 1980s. Bankster gulls some investors, makes some quick acquisitions to give the illusion of a successful business, then bails with a golden parachute.
“We learned a couple of weeks ago (from them) that Bolt is ceasing operations,” Davis told TechCrunch via email, noting that Bolt ceased operations July 1, but actually informed the county a week later. “They’ve vanished, leaving equipment behind and emails and calls unanswered. We’re unable to reach anyone, but it seems they’ve closed shop in other markets as well.”
This is going to be a big-time scam, one that will likely end the cooperation of local governments with rideshare scootering. Over fifty governments are being left with nonfunctional scooters in various states of disrepair.
Sandy Thibault, executive director of Chittenden Area Transportation Management Association, told the Burlington Free Press that Bolt communicated that employees were being let go and the company’s board of directors was discussing next steps.
You know it’s the 21st century when the boss you’ve never met, at the company without a physical existence, “fires” you simply by going silent.
And honestly, you knew it would happen that way. When management treats you like a nameless fungible commodity… when the least important people are managing ALL day-to-day operations… yeeeah.
A spokesperson at Burlington relayed similar information.
“All of our contacts at Bolt, including their CEO, have gone radio silent and have not replied to our emails,” Robert Goulding, public information manager at Burlington’s Department of Public Works, told TechCrunch.
Davis went on to say that about 100 bikes have been left on the ground completely inoperable and with dead batteries. Chittenden County has given Bolt a time frame in which to claim or remove the company’s vehicles, otherwise the county will take ownership of them.
It’ll be an abatement nightmare. Disposal of large lithium batteries isn’t trivial.
But I have no sympathy for these governments. They saw tax and license revenue so turned a blind eye to everything from toxic littering to unsafe loads on the power grid.
“Can we dump our short-lived products on your city’s streets, walk away and cash the checks until the investor funds dry up?”
“…What’s my cut?”
Bolt also appears to have stopped operating in Richmond, California, according to Richmond Mayor Tom Butt’s e-forum.
“Unfortunately, Bolt apparently went out of business without prior notification or removal of their capital equipment from city property,” wrote Butt. “They recently missed the city’s monthly meeting check-in and have been unresponsive to all their clients throughout all their markets.”
The other reason to “co-found” your scam company with a celebrity, is because everybody will think about Usain but not Ignacio.
Butt went on to say that the city is coming up with a plan to remove all the abandoned equipment — about 250 e-bikes that were available at hub locations like BART stations and the ferry terminal — and asked people to refrain from vandalizing the bikes until the city could come up with a solution.
Service has also ended in Richmond, Virginia. The city confirmed that Bolt Mobility’s permit with the City of Richmond ends today, August 1, 2022.
…TechCrunch has reached out to several other cities in which Bolt operates and has not been able to confirm that the company has stopped operating entirely. A spokesperson from St. Augustine originally told TechCrunch Bolt’s bike share was running as usual there, but after looking into the matter further, has since confirmed the service is suspended.
Bolt’s social media has also been rather inactive in recent weeks. The company hasn’t posted on Instagram since June 11 or on Twitter since June 2.
It just keeps going. The article ends with the killshot:
Bolt has publicly raised $40.2 million, an amount that doesn’t include an undisclosed investment from India’s Ram Charan Company in May. Investors there could not be reached for comment.
I also have no sympathy for foreign investors meddling in markets that mean nothing to them but a return on investment. They say you can’t con an honest man… lookit all those conned people who trusted a bankster.
And they’ll keep trusting banksters because it’s probably not even their money. Socialized risk, privatized profit. Nobody loses except the little people who don’t even have names. They just run the company. Nothing important.
The only question is Usain Bolt. We can only guess at this point, how much of the creditor bag he’ll be left holding.
