E-scooters - borrow or buy? Update 2023
In March 2020, we already reported on this topic once and compared the acquisition costs with the rental fees for an e-scooter. The result was quite clear: the cost of a rental scooter used for the daily commute to work (10 minutes) was around 1,400 euros per year. For this money, however, you can easily get your own e-scooter, for example the TRITTBRETT Kalle. The advantages are not only monetary, however, but the condition and availability of the purchased e-scooter is in your own hands. For people who live away from the metropolises like Berlin, Munich, Hamburg or Cologne, there is no alternative to purchasing an e-scooter because there are no rental companies in their area. Let's take a look at how the rental scooter business has developed in recent years.
E-scooter rental: black sheep, warnings and the people's anger
In 2017, the American player BIRD entered the market with great fanfare. The only listed company among the mobility providers expanded to 400 cities worldwide, the stock market price was briefly at nine US dollars, the German rival CIRC was swallowed, but then things went steadily downhill. As of 29 March 2023, the share price was 0.19 US dollars, irregularities appeared in the balance sheets and the company had already withdrawn from Germany, Sweden and Norway in autumn 2022. The business model with franchisees also failed, because the contracts lured into a debt trap and were described by lawyers as "unclear and difficult to understand".
Still other companies, such as VOI from Sweden, discovered the flat rate model and offered monthly passes and day passes. But the advertising with an "unlimited number of journeys" was misleading, because the use was very much limited. This led to a warning by the consumer advice centre in Hamburg for "unfair business practices". No less than 54 providers were warned in June 2022, because the general terms and conditions contained legal violations and in some cases legal action was even taken. The lawyers stated that "an unusually high number of clauses were invalid". In addition, the GTCs were "rather opaque and anything but consumer-friendly".
Things turned bitter for the e-scooter rental companies BOLT, LIME, TIER and VOI in Cologne, because in May 2022 the city imposed special use fees totalling 450,000 euros per year (85 to 130 euros per vehicle). The reason given was that "e-scooters parked in violation of the regulations on footpaths and cycle paths caused considerable nuisance to the general public". The people's anger about the wildly standing and lying e-scooters had won and on 11.01.2023 the Administrative Court of Cologne dismissed the counterclaims of the four named companies. Now the Higher Administrative Court in Münster must decide on the appeal and complaint. A side sentence from the press release of the VG Cologne is particularly interesting: "In addition, both bike and car sharing services make a greater contribution to reducing individual car traffic than e-scooters." The enthusiasm of traffic managers now seems to have turned into displeasure towards e-scooter renters.
Cut-throat competition and flat rates
The mobility market is fiercely competitive and the players are fewer and fewer. The image of the rental companies is bad, the e-scooters are a nuisance in city centres, there is no functioning business model for the winter and the eco-balance of rental scooters is catastrophic, because many rental scooters are still so defective after a few months that they have to be scrapped. Expensive batteries end up in landfills in Ghana and the production of new scooters burdens the CO2 budget. Doom and gloom for the e-scooter rental business?
No, this business model will not disappear completely and it makes sense in cities, if not too many providers offer the exact same service. The market will probably have to shrink healthily, as evidenced, for example, by TIER's takeover of SPIN, a subsidiary of FORD, in March 2023. SPIN cited "that other competitors are engaging in cut-throat competition" as the reason for its capitulation. TIER can look forward to an additional 50,000 e-scooters and the company also took over the bicycle rental company NEXTBIKE.
In Germany, the following companies are currently significantly involved in the price war: BOLT, LIME, TIER and VOI. In the meantime, the fee structures are a science in themselves. There are monthly subscriptions for 69.99 euros with 750 minutes or 300 minutes for 29.99 euros. The price per minute is sometimes stable at 19 cents, others charge 25 cents. Activation can cost 49 cents here, up to 1.20 euros elsewhere. Some scooters have a special marker with which you can "earn" free minutes. Other subscriptions look very cheap at first glance at 13.99 euros for 100 minutes, but they are only valid for a maximum of three days. BOLT, on the other hand, does without flat rates altogether, but charges 21 cents per minute, a break costs 12 cents, but in return the unblocking is free. The providers confuse their customers with constantly changing charges and tariffs, where even the small print has to be read carefully. So the solution to the mobility crisis becomes a jungle of costs.
E-scooter parking in front of the door or in the parking zone?
Anyone who has ever used one of the rental e-scooters knows the problem: you can't drive right up to the door of your destination but have to park the rental scooter in the parking zone designated by geo-fencing. Outside these marked areas, the ride can neither be stopped nor paused. However, these areas are often far away from the actual destination and make micromobility less attractive. It's different with my own e-scooter: I can park it wherever I want as long as it doesn't bother anyone. If in doubt, I can take it with me into the building, shop, authority ... in practice, this can make my own e-scooter much more attractive.
Red zone: Permanent driving and parking ban
Yellow zone: Borrowing and parking ban from 5:00 p.m. to 6:00 a.m.
Turquoise zone: Temporary lending ban
Blue zone: Parking ban also outside the Wiesn period
Outlook and conclusion
Soon the market will have to clean up and only a few providers will remain. The question is simply who will endure this bludgeoning competition the longest. Enthusiasm among investors is limited because the companies are still hardly showing any profits. Moreover, it is becoming increasingly attractive to enter the market with rental bikes and e-bikes, as for example in Munich, where the Münchner Verkehrsgesellschaft (MVG) offers unbeatable prices. LIME and TIER, however, have also discovered this segment for themselves and are strengthening the business with e-bikes for rent. Was the idea of renting scooters perhaps not such a good one from the start?
As already mentioned at the beginning, people beyond the metropolises don't need to worry about this, because they don't have to decide on a rental company, but rather consider whether the purchase of an e-scooter makes sense in general. But this is precisely where the ADAC's point of view comes into play, which is: "E-scooters [...] are an alternative to the car for short distances and an option for bridging the first or last mile at public transport stops." Moreover, in rural areas there is the added fun factor, because here you can enjoy the cross-suitable scooters to your heart's content. In any case, there are enough field and forest paths.
If you live in a metropolis, you are also better off with your own e-scooter, because you always have the condition of your vehicle under control and don't have to worry about availability. Also, if you keep track of rental fees and always rent smartly, the cost of buying a scooter will quickly pay for itself. Unfair terms and conditions and tricky flat rates don't cause headaches, and the selection of e-scooters for sale is now so large that there is something for every budget.
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