Britain’s electric scooter boom in danger of backfiring before it begins
Start-up firms have a long way to go to quell concerns after a shaky opening to trials, reports James Cook
The first trials of electric scooters on UK roads were supposed to be a way for the Government to show how people could commute safely when lockdown is lifted.
But gangs of children in Middlesbrough have threatened to scupper the carefully laid plans of scooter businesses worth billions of dollars after they took the vehicles for joyrides around the town.
First, a pair of teenagers were seen driving electric scooters down the busy A19 dual carriageway without wearing helmets. The boys had hired scooters from British start-up Ginger, which beat well-funded rivals to launch the first public trials of electric scooters on British roads in July.
Weeks later, there were reports of groups of children driving Ginger scooters through shopping centres, almost crashing into elderly shoppers.
Ben Houchen, Mayor of the Tees Valley, defended the scheme, blaming “a small number of idiots” for the incidents. But others have been more angry. Mike Hill, Hartlepool MP, has claimed that scooters are as “useful as a chocolate fireguard”.
And the National Federation of the Blind UK has urged local authorities to withdraw from trials over concerns that the scooters could cause injuries.
Ginger’s rivals are concerned news of these incidents could spoil an electric scooter gold rush as more than 50 towns and cities seek to run their own trials in partnership with scooter hire companies following a change in the law. “It was a shame to see the first trial not go so well,” says Richard Corbett, the UK head of Swedish scooter start-up Voi. “These issues should not have happened.”
Industry insiders say that more than 20 different companies are hoping that their scooter rental systems will be picked for the trials. The businesses range from international giants like Bird, with a valuation of $2.5bn (£1.9bn), through to newly formed companies hoping to profit from a rush to get scooters on UK streets.
“There is now a very long tail of operators,” Corbett says. “Half of those didn’t exist until the laws were changed.” Corbett is a former start-up founder who is most comfortable in a baseball cap and hoodie. He ran Bird’s UK operations when it launched a scooter trial on private land in the Olympic Park in 2018, but joined Voi earlier this year.
Paul Hodgins, Ginger’s chief executive, cuts a very different figure. Softly spoken and fond of wearing suits, Hodgins is a Conservative councillor who has spent years lobbying for his home-grown scooter business. Ginger hasn’t picked up backing from venture capital funds, as larger rivals such as Voi, Bird, Tier and Lime have done.
Instead, the company received investment from Philippe von Stauffenberg, a German businessman whose great uncle Claus von Stauffenberg was the key member of the July 1944 plot to assassinate Adolf Hitler, and was played by Tom Cruise in the 2008 film Valkyrie.
Hodgins dismisses the incidents in July as growing pains that have already been fixed. “This is the first pilot, so the spotlight is on it,” he says. “There will from time to time be people who use it irresponsibly.”
Hodgins says Ginger updated its app after the incidents to block riders from driving on the A19 and through shopping centres. The company has also added enhanced ID checks to stop children renting scooters.
Ginger is now in the middle of raising a new round of funding, Hodgins says, and the Middlesbrough trial will be extended later this month to surrounding areas.
Industry insiders say some local authorities have expressed concern over the incidents in Middlesbrough, but the hope is that trials due to start in cities like Cambridge in the coming weeks will prove more successful.
Berlin-headquartered Tier has a large war chest, having raised over $131m in funding. But the company is hoping to start small by deploying a minuscule number of scooters into its trials in a bid to ease cities into welcoming them on to their streets.
“Getting scooters on the ground is not the ultimate measure of success,” says Fred Jones, the company’s UK head who joined Tier earlier this year after running Uber’s UK operations.
“We’re more than happy to start a city with 50 scooters,” he says. But operating in such low volumes upsets the unit economics which have seen scooter business raise hundreds of millions of pounds of investment.
“Clearly below a certain level, we don’t make money on it,” Jones says.
Jones is used to dealing with local authorities, having spent more than five years at Uber. But the sudden rush of cities wanting scooter trials has surprised him. “Local authorities are working at a pace and at a scale that I’ve never experienced before.”
If successful, scooter companies could create a brand new transport method on UK streets and earn millions of pounds.
“This isn’t a service just for the skinny jeans guys with the long hair getting their frappuccinos in Old Street,” says Corbett. “This is for everyone.”
The first public trials of electric scooters on British roads began in July