E-scooters seemed to pop up out of nowhere and have been spreading around the US like wildfire – but what does it take to build a scooter company? Today we have a guest post from Asher Meyers on what it would take to build a successful and potentially profitable scooter company.
The scooter startups Lime and Bird have sunk hundreds of millions on building and deploying scooter fleets all over the world. Uber, Lyft, Skip and Spin have joined their ranks. How could the average Joe possibly run with the bulls, without tens of millions in funding?
These firms, particularly Bird and Lime, have had to spend on big fixed, upfront costs — things like:
- Vehicle hardware design
- Logistics software, to coordinate charging, deployment, repairs and legal compliance for scooters
- The app, which people use to unlock the scooters
- Lobbying local and state governments
All of these have classic ‘economies of scale’ — build it for one scooter or 10,000, and it costs a lot either way. They’re barriers to entry — hurdles that make it hard for new firms to form and compete.