The rental market for electric-powered bicycles and scooters is “going berserk” in the UAE as more people go green. At least that’s been the experience at Dubai-based eBike, a company that sells and rents out electric-powered bicycles, scooters and skateboards that use the same technology as Tesla for motor power.
The trend spans from workers commuting into Downtown Dubai to 1,600 other cities worldwide, where start-ups like Lime and Bird have taken urban areas by storm. In China alone, more than 40 bicycle-sharing companies have begun operations in the last two years. One, Ofo, has already made profits of $1.2 billion (Dh 44bn).
"I just got off a scooter," Saoud Khoory, a co-founder of eBike says of Lime, in a phone interview with The National from Los Angeles.
Mr Khoory is not the only entrepreneur banking on the rise of more eco-friendly modes of transportation.
Last December, Californian-based firm Qwikly launched its scooter rental scheme in Dubai and Abu Dhabi.
The firm, which also has plans to expand into the Philippines, Korea and Japan, distributed 75 scooters at various locations in the two emirates, including 25 on Abu Dhabi’s Corniche.
"This scheme is primarily for people who want to get from their home or office to the metro station," says UAE country manager Ammr Shaladi, in an interview last month with The National.
“People spend a lot of time in taxis to make short trips whereas it may only take a few minutes by scooter. You can use scooters on the sidewalk and save time.
“We are talking about someone being able to save time on a 20-minute walk by taking a scooter and covering the same distance in six minutes.
“The majority of people using this service will be looking to make a two to three-mile journey.”
Unlike in the sunny UAE, two of the largest electric scooter and bike start-ups, fresh off raising hundreds of millions of dollars last year, are looking to raise hundreds of millions more, but are finding their futures are not as bright. The latest hard-fought deal terms for Lime and Bird Rides both peg the companies’ worth at far less than the lofty valuations the start-ups once sought, according to Bloomberg.
New funding rounds for Lime and Bird value the California-based companies at about $2 billion. That’s down from the roughly $3 billion-or-higher valuations the companies were said to be chasing as recently as a few months ago.
Founded in 2017, Lime and Bird became two of the youngest start-ups ever to reach unicorn status (valued at more than $1bn), after interest in electric vehicles exploded last year. But as the new valuations attest, winter has finally come for scooter companies.
In recent months, as the weather has turned colder in the United States and Europe, wet and rainy conditions have deterred riders, forcing companies to reshuffle scooters to warmer climates. Cities have been limiting the number of scooters allowed on their streets. And competitors have flooded many markets -- prompting investors to begin to question the companies’ ambitious financial targets.
Start-ups in the industry will also now increasingly find themselves up against Uber, which is piloting electric scooters in 10 new cities through a subsidiary called Jump.
Uber and Lyft (which also has an electric scooter offering) both plan to go public this year, and are eager to show investors that they’re positioned to cash in on new transit trends. In addition to offering scooters of its own, through its brand Jump, Uber is also manufacturing electric bikes in China, importing at least 8,000 into the United States at the end of last year.
With so many companies vying for the same customers, many believe that consolidation in the scooter industry is inevitable. Though no deal has come together, both Lime and Bird have discussed a potential acquisition by Uber. And Softbank, Uber’s largest investor, is said to have talked with most of the major scooter companies about an investment. None has been announced.
Despite the industry chill, though, there is a new, perhaps unanticipated use for electric-powered vehicles.
Mexicans faced with a fuel shortage are turning to bikes and scooters, generating business for start-ups that rent those alternative rides, but straining operations for ride-hailing service Uber in some cities, Reuters reports.
The shortages came after Mexican President Andres Manuel Lopez Obrador closed some vulnerable pipelines in a crackdown on fuel theft. There have been long lines at pumping stations this week in several states.
Uber said the fuel shortage posed challenges in some cities in the central state of Guanajuato and the Western state of Michoacan. Users are requesting fewer trips in those cities, but with fewer Uber drivers on the road, demand has increased for those who are working, said company spokesman Saul Crespo.
Mobility as a Service for Latin America, a trade group representing firms such as Chinese bike-sharing company Mobike and California scooter outfit Bird, reported a spike in demand as people who normally drive scramble for alternatives.
"It's a big opportunity for those companies to show that new alternatives can be substitutes for traditional cars, for short distances," said Miguel Abad, who leads public affairs for the group.
Mobike, which entered Mexico with its fleet of bright orange bikes last year, said its trips jumped an additional 10 per cent above normal growth over the past few days.
For Grin, a Mexico City-based scooter company, demand had more than doubled and was climbing further on Thursday, co-founder Sergio Romo wrote in an e-mail to Reuters.
"Don't worry, Grin is electric," the company advised users on Twitter.
In Dubai, which is set to build 850 kilometres of cycling lanes by 2030, up from the current 316km of bike paths, demand for e-bikes and e-scooters is tracking with expansion.
"The demand has increased by far, people are understanding sustainability and people are shifting from petrol to electric,” says Mr Khoory of eBike.
For now, his venture has been self-funded since it launched in March 2014. But with a record-setting year for eBike in 2018, venture capital funding may well be in its future.
“The market is still quite early in the UAE but this year should be a very good year for us,” he says, adding that eBike is going after two markets: high net worth individuals who can rent or buy an Australian brand it distributes that can accelerate to 80 kph and costs Dh40,000; or middle-income commuters who will shell out around Dh3,500 for an entry-level Saluki (eBike’s own brand) that tops out at 30kph.
If eBike chooses to go the venture funding route, the new fundraising for Lime and Bird, and forays by Uber and Lyft, show that investors remain optimistic about scooters. Many likely still buy into the premise that small electric vehicles could transform urban transit. And there’s another upside: Spring is always right around the corner.
