Shared electric kick scooters will be sailing down German streets sometime this year, with multiple firms awaiting the federal government’s proclamation of road readiness.
With shared scooters already the scourge of many American cities’ streets, Germans are hoping homegrown mobility startups will keep US rivals at bay. Founder Lukasz Gadowski, 41, known for founding Delivery Hero, wants his new startup Flash to become a European mobility champion.
“The success story of the automobile has gone on long enough,” Gadowski said. “It’s absurd that we have gotten used to clogging up cities with parked cars.”
E-scooters take up less room than cars or even bikes and are easy to use, which make them an attractive transport option for big-city commuters, especially in conjunction with traditional public transportation. Shared e-scooters could be a €150 billion market in Europe by 2030, consultancy McKinsey has estimated.
Founded just six months ago, Flash collected €55 million ($62.5 million) in its first funding round. It plans to launch its kick scooter sharing business in France, Italy and Spain in the spring and across the rest of Europe, including Germany, this summer.
Another German startup, Tier, raised €25 million in a series A round late last year. Its scooters were first released on the streets in Vienna in October, and since then in Paris, Lisbon and Palma de Mallorca. More cities are in the works.
Flash has no shortage of rivals in Europe. American kick scooter giants Bird and Lime are already present in multiple metropoles and are poised to roll into Germany: Bird has been testing e-scooters in the Bavarian town of Bamberg, and Lime is recruiting staff in Germany. Uber is also getting in on the action, as are Daimler’s MyTaxi and Estonian company Taxify.
Based on the successes of carsharing and bikesharing, scooter sharing is an understandably appealing business model. But investors’ enthusiasm has been cooling lately. Shared scooters have gotten a lot of bad press from accidents, serious injuries and public pushback at the scooters strewn about the streets, blocking walkways and entrances. Vandalism is a constant issue.
Michael Keating, the founder of Scoot Networks in San Francisco, said that within two weeks of launching, 200 of his 650 Vespa-like scooters had been stolen or damaged so badly that they couldn’t be repaired, the Wall Street Journal reported in December. In some cities the scooters only last about two months, investors told the paper. That’s not enough to recoup the cost of buying them.
Investors have pumped hundreds of millions of dollars into Lime and Bird since the industry sprouted in California two years ago. The road has gotten rougher since then: Some cases cities have limited the number of shared scooters allowed on the streets or banned them altogether.
Bird, which has scooters in more than 100 cities around the world, recently raised another $300 million from private equity group Fidelity, according to a report from Axios. Bird’s value, while it’s fallen short of expectations, remains at $2 billion.
Lime, which also deals in bikesharing, appears to have a similar problem. It had planned for a valuation of $4 billion for its next financing round, but the Wall Street Journal reported that the company had lowered its expectations to $2 billion to $3 billion.
Gadowski believes that knowledge of local markets and culture is the key to success in the shared scooter space in Europe. “Those who deliver the best use — including for neighbors and other pedestrians — will survive,” he said. Civic responsibility is as important as offering an easy-to-use app and comfortable scooters.
Kersten Heineken, who analyzes the market for McKinsey, said, “In a country where politicians call for Amazon or Facebook to be boycotted, a European firm will definitely find things easier. But that alone won’t guarantee success.”
Varinia Bernau leads the innovation and digital team at WirtschaftsWoche, a sister publication of Handelsblatt Today. Grace Dobush is an editor with Handelsblatt Today in Berlin. To contact the authors: [email protected] and [email protected]