It’s been a summer of change. I had been meaning for weeks to write a longer post on scooters, as an attempt to collect my thoughts on the topic, specifically around the market size, unit economics, and defensibility– but life got in the way. (Perhaps one day I will write that post.)
Let me state upfront that I am pro-scooters. It is incredible to see the category explode onto the scene, it is incredible to see consumer demand for getting from Point A to Point B, and yet consumers don’t naturally want to “dock” those scooters at the end of a trip. In other words, a large number of consumers are saying “I will do anything and also pay good money to get to Point B quickly, and I’d prefer to leave the scooter on the ground (likely sidewalk) at Point B when I’m done.”
Yesterday we found it that, for some cities, the powers that be didn’t want things to work like this. There is a whole debate to be had about “who owns the sidewalks?” and “did government meddle and/or grant monopolies?” and so on. I’ll let someone else cover those.
What I found myself reflecting on yesterday (bleeding into this morning) is that we do, indeed, live in a post-Uber world. As Fred Wilson noted yesterday, as technology networks mature and spread into new markets (including devices, like scooters), the complexities associated with investing in “atoms” vs “bits” raise many issues. Whereas Google and Facebook didn’t require permission to write the code for and distribute its products on the web, companies like Uber over the last decade and the rash of scooter outfits today require many points of permission to sustain.
The caveat now with scooters is that we live in this post-Uber world. The story of how Uber spread from city to city, from country to country, is known. It was a brute force mission and an incredible accomplishment. During those early years, most didn’t realize the stakes were so high. Uber has one domestic competitor, and overseas it has a few in key markets as well. Today, when cities assess the impact of scooters, the memory of Uber is fresh in their minds. The stakes are high. The market for short trips is enormous. And while Uber was bringing software-driven networks to vehicle capacity for cars which were already permitted to legally operate on the roads, scooter use often tended to drift into the sidewalk, which is a seemingly small but meaningful distinction.
[A quick aside: Like Uber worked for items that were already street-legal, Airbnb initially enabled homeowners to rent their extra space. Of course, as this software-driven network grew, hosts took advantage of the marketplace demand and skirted some housing rules, but yet again the stakes during that time were not immediately obvious to everyone. Today, as Airbnb faces regulations in megamarkets like New York City, it is too late to curtail the Airbnb movement — they have won, and consumers want it. I believe it is important to consider the time in which Uber and Airbnb grew their networks. Today is a very different time. The impact of software on transportation and housing is evident.]
In a perfect world (or my perfect world) cities would regulate the amount of cars on the street, install congestion pricing schemes, open up the streets for mixed-used transportation — bikes, scooters, boards, pedicabs, people movers, etc. Sadly, that won’t happen. So, scooters are stuck without a clear lane, and consumers are going to need to fight for them if they’re ever to exist.
I don’t know how we’ll get there, but I believe eventually cities will permit more and more scooters for people to use. I’m optimistic about that. However, the previously-used methods of brute force feel less likely to work. Instead, working with cities and governments may turn into more of an RFP-style game for startups, where the most successful companies become expert at helping designing regulatory structures with their hosts and to excel at either meeting or exceeding expectations on these applications. In this post-Uber world, we should expect moving atoms will require permission.