How Can Dockless Bike And Scooter Companies Make Money?

By Rob Nikolewski
The San Diego Union-Tribune

WWR Article Summary (tl;dr) Like Uber and Lyft, riders activate dockless bikes and scooters through their smartphones after downloading an app and get billed by credit card. When they’re done, riders either push down a locking arm or tap “End Ride” on the app and the devices lock up.

The San Diego Union-Tribune

In just a matter of a few months, hundreds of dockless bicycles and scooters have appeared on the streets and sidewalks of San Diego.

Some have praised them as effective ways to get around town and reduce traffic congestion. Others have complained they clutter sidewalks and that too many riders don’t follow the rules of the road, posing safety hazards to pedestrians.

But from a business perspective, the nascent industry raises a basic economic question: How do these companies expect to make a profit?

By last count, there are at least five dockless bike and scooter companies operating on San Diego streets and campuses and they offer their services at a deep discount.

Bike users can expect to pay just $1 per 30 minutes. Electric scooter company Bird charges $1 for the first hour and 15 cents per minute from there.

While that’s great for consumers, can these companies make any money at such prices?

The firms say their costs are low and economies of scale help them slash the price of the bikes and scooters they purchase. One executive pointed out that if car-sharing services like Zipcar can make a go of it by offering driving rates at about $10 to $12 an hour, they can turn a profit at $1 for a half-hour.

Like Uber and Lyft, riders activate dockless bikes and scooters through their smartphones after downloading an app and get billed by credit card.

When they’re done, riders either push down a locking arm or tap “End Ride” on the app and the devices lock up. Users don’t have to return the bikes or scooters to docking bays; instead, they leave them on the sidewalk where other riders can use them.

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