Industries with capital expenses relatively large compared to contribution margin tend towards local monopolies. When faced with a potential new entrant the incumbent can lower prices to where the entrant's assets can't return their cost of capital. The incumbent's capital is already sunk so they can afford to bring prices close to the marginal cost of providing the service. This threat of a price war is usually enough to deter entry.

This also leads to agglomeration in local markets both to avoid duplicative assets and to add credence to the price war threat.

1) Bundling could help new entrants with existing platforms. E.g. if Uber comes into a local market and offers a free scooter ride for every car ride, that could really hurt a company like Bird -- even if Bird is the incumbent when it comes to scooters.

2) I view these capital expenses as being relatively small. If it's $1m-$2m to cover SF in scooters, and if scooter costs are similar across players, then I don't see why a new entrant couldn't also offer services at cost until the incumbent gets tired of running at break even.

3) The price points are so low here -- often $2-$3 for a ride. If that's the case, I wonder if consumers will care about someone shaving 30 or 50 cents off their price to provide scooters at their marginal cost, or if they will care more about scooter proximity or safety or comfort or something else.

On my personal ebike, i do 2-4 rides a day and it has almost entirely replaced my car.

So really, anyone in SF or NY who spends $50/month will surely consider getting his own?

3$ and even 2$ seems in fact un-sustain-ably high for mass market adoption (I live in a small European country. Salaries about 2/3 of US).

Overall, it's a really well designed product. I'm pretty concerned about the durability though. I've ridden it about 100 miles, and so far so good, but there have been several small issues with rubber coming unglued, it's starting to creak a bit, the caps on the handlebars pop out. The advertised range is also wildly overstated. It's rated at 15 miles but I had mine run out of juice at about 8.5 miles.

My hope is that the big rental companies will push Ninebot to make durability improvements, and the next version will last longer. Based on my experience so far, and what I've read online, I'm expecting maybe a 3-400 mile lifetime for this one.

If you get one, do your best not to go over any significant bumps at speed. The wheels are small, the tires are solid rubber, and the suspension has very little travel. The motor is in the front wheel. If you bottom out the suspension, the motor is going to take the hit, and it's small, high performance, and built to a low price point in China.

Every sign points to commodification here. The way car and bike rentals are commodified.

The economics leaks in many places:

1) people buy their own scooters

2) with rising scooter usage, scooters get way cheaper (see 1)

3) multiple competitors bid down rental prices

4) people figure theft/secondary part market out

5) a scooter inventory uniting meta app (a la Kayak) takes all the margin

6) turns out teenagers were only bird hunting as a novelty, gotta pay expensive 25 year olds to do it

So many issues. It's easier to see a world where electric scooters are neat novelties for tourists sometimes (as long as it's warm! with no kids! and no rain! and we're going more than 0.7 but less than 2 miles! and my wife doesn't say they're dangerous!) than a world where any one of these companies is a serious $1b technology company.

I mean: doesn't it just feel natural?: these are little novelty tourist scoot rental companies.

If a teenager can grab 20 bucks with minimal effort they're definitely going to be doing it. One big leaky part of the plan is that it doesn't seem scale to non-big-cities like Uber can/did.

Walking around sidewalks with younger kids is now dangerous from the groups of teenagers riding on these with little concern. In the same afternoon I saw a young kid get hit by a car for not following traffic rules. While its required to wear a helmet in SM no one was. These things are littered everywhere in paths just lying on the ground.

I get they are great and if we could rely on the people or the company to enforce the laws and make it a better experience I'd be in favor of them because they are convenient. I just don't believe that will happen.

We can get through this transition period and put in place reasonable rules that yes will eventually become commonly complied with. License scooter drivers and or the scooters themselves. Reserve one street parking space per block for scooters and you probably could cram 20 of them in there. Lots of things can be done.

Which isn't to say I want to regulate them more. It's just sort of pointless in a city where the populace doesn't follow the existing rules, and there's no political will for law enforcement to do anything about it.

Are you seriously saying that multiple times per week, you are knocked over by a bike?

I think you are suffering from a bit of car blindness: https://blog.sfgate.com/bicycle/2018/04/27/invisible-cars/

https://qz.com/1257151/this-electric-scooter-mayhem-sounds-j...

The right way to solve the problem of too many electric vehicles on the sidewalks is to charge owners rent.

I bought my own for this reason. The scooters you are renting cost $500, already if you are using it twice per day to get to work you are losing money.

There's also the option of more efficient support & operations, which is arguably the approach that Lyft took.

Uber chose to raise a ton of money and outspend their competitors in the hopes that they bleed them out via spending in acquisition and creating new products via R&D (maybe express pool is an example of this).

Lyft, however, seems to aim for profitability and stability. I assume this means investing in internal tools & processes so that they can be more efficient.

I'm not sure who wins in this situation. But I imagine Lyft isn't going away, and Uber may, truly, run the well dry at some point.

The top investors will be fine because they get right of first refusal on all good deals. It's the lower ranks of angel investing/VC that's going to suffer.

I think to be a great investor you have to be in it for the long term. Guys like Fred Wilson, they've been doing this 20-30 years and are reaping the rewards just now.

I like the idea of this playing out with 1-2 companies offering several different transportation verticals in each city. Rather than checking Uber, Lyft, Via, Bird, Lime, etc. to try to get from point A to point B, I can check an app that gives me the prices for ridesharing, scooters, e-bikes, whatever...and then I choose one of those options from the given company.

The moat here is to be the best aggregator for the entire network. Netflix has enough good shows for me that I don't pay for Hulu to watch the one show there that I'd like to see. The same idea exists here, just in the physical world.

[0] https://stratechery.com/2018/the-scooter-economy/ HN Discussion of the post: https://news.ycombinator.com/item?id=17284094

Since there's no ownership, reliability and durability don't matter as long as it can complete the ride, although it does matter that it's not so crappy a scooter that it's falling apart while riding.

After that, it's just about ease of accessibility and price. I'll walk a block to use a service that is dead simple and painless to use compared to a more complicated app, but I'm not walking a block for something that's slightly nicer, or 10% cheaper.

1) The city picks a winner. This could be done fairly by auctioning off a five year contract or it could be done via corruption. Either way the scooter companies should be taking the millions they've raised and greasing officials.

2) Establish a market for docks. There's an interesting opportunity here in that scooter "stations" don't need to be the sort of big official stations that have beeen deployed for bikes where each station holds 30+ bikes. You could imagine a lot of small business, stores, etc. offering to host small stations that hold 4-5 scooters on their own private property. The scooter companies would then either race to lease as many of these stations as possible or would be forced to pay each time a scooter of theirs gets docked at the station. The winner is the company that owns the most stations. That's a real moat and the stations become real assets.

3) The simplest solution is probably to just to give people scooters. Let people "lease" a scooter and trade in these "leased" scooters at any time 24/7. Trade ins need not be a big centralized, complicated thing; you could imagine something like a scooter delivery service. In <20 minutes an Uber shows up and drops off a new scooter and collects an old one. Don't charge people if the scooter is stolen or breaks but do charge people if their scooter is left on the sidewalk and gets seized by the city. Then it would be up to individuals to make sure their scooter doesn't get left on public property. Scooters are so small -- and only getting smaller and more portable -- that you could imagine that most people won't mind stashing them under their desk/in their office.

All three of these possibilities btw lead to a single winner. At the end of the day, like with most transportation plays, you're looking at powerful economies of scale where the big guys only get bigger. It's a market to invest in if you think you can pick the winner cuz that winner probably will take all.

It's really just a parking problem. We don't want another cable company / taxis v2 and 'pick' a winner with horrible service. You mandate that these things need to be locked to something and most of the problem resolves itself.

Businesses that want it to be easier to shop where they are will install bike racks. The city will fund new bike racks with scooter permits. You could even allow scooter companies to install and pay for new bike racks themselves as they probably understand demand dynamics far better than random cities. If the scooter companies install the racks, you just have to say they can be used by everyone and are owned by the city.

We don't need heavy duty docking systems that are exclusionary to one docking company. A simple cheap metal bike rack that everyone can use will be plenty enough and more economically efficient.

You can also detect if the renter rider puts the scooter in the right area or if someone is screwing with the scooters after the fact with accelerometers. You could even detect if they are in a tipped over state or not.

  You can also detect if... someone is screwing with the scooters after the fact with accelerometers

https://www.limebike.com/blog/new-tech-helping-lime-keep-bik...

Also by locking the devices the likelihood of them falling or being in the way is low.

  If you can tell the renter did the action

  by locking the devices the likelihood of them falling or being in the way is low

The biggest complaint with these scooters is they are in the middle of the right of the public right of way and laying down on the street in an inefficient manner.

If they are locked to something, they would be outside of the right of way since lock points tend to be on the edges of sidewalks. If you put the lock on the correct point on the scooter, it will be fairly difficult to knock them over, vs the light tap you need today.

Locking also reduces the instances of impulsive bad acts, since now you need some sort of specialized power machinery to remove the items. And barriers to impulsiveness is a big factor in reducing crime. Did you know for example crime tends to happen more at the bottom of a hill vs the top of a hill? Because people don't want to walk up hills because it's extra effort.

On top of that, nobody has been complaining about personal bike ownership, which today follows a model of being locked to things.

JUMP bikes in SF for example follows this model, has been around before the scooter boom. I haven't heard a single complaint about them other than positive complaints such as 'why aren't there more?', and 'why are they restricted to an area?' The scooters on the other hand have had a bunch of negative complaints.

If people can move past the dockless approach and realize it doesn't scale then we might get more efficient business models that could be defended without gobs of VC money.

[1] http://www.wri.org/blog/2018/01/chinese-cities-aim-rein-bike...

[2] https://news.sky.com/story/in-china-rental-bikes-have-become...

Anyway, cities could make parking rules and require the scooter companies to help with enforcement. E.g., to lock the scooter you have to park it properly and take a picture with the app. The city's parking enforcement gets access to the pictures and can fine people without even having to get off their chairs.

The real problem with scooters, from what I've heard, is that boomers hate them because they're new and because some people ride them on the sidewalks. But the dock solution does not help at all with that.

Refreshingly honest.

Fascinating idea, thanks for that analysis.

I mean, skateboards do what these do as well.

I bet the number of people riding scooters drops sharply at age 30. Heat dissipation for the mechanism and comfort for the rider are two big factors.

Try it in Dallas. It has notoriously low walkability scores and is regarded as pedestrian-hostile. The three months over 100F would make or break.

plus have any of these startups had issues with injury lawsuits?

San Francisco seems to be solving this problem for the industry. At last glance, their regulatory framework grandfathers in existing providers with a medallion.