By Peter Passi
Duluth News Tribune, Minn.
WWR Article Summary (tl;dr) Two young entrepreneurs plan to start up an electric scooter rental business this summer called “Leaf.” They hope to be first to market.
Jed Irvine and Latisha Forsberg, a couple of students in their junior year at the University of Minnesota Duluth’s Labovitz School of Business and Economics, already are making use of their lessons to launch a business venture before they even graduate.
The two young entrepreneurs plan to start up an electric scooter rental business this summer called Leaf, beginning with a fleet of 50 vehicles.
They hope to be the first electric scooter service to enter the market, with plans to start operations June 1. But they’ll likely have competition from a larger established company. Duluth City Council President Noah Hobbs said he has spoken with a representative of Lime, another scooter service already operating in the Twin Cities.
Although Lime did not yet made any announcement Hobbs said Lime clearly is eyeing the Duluth market, and expects to see them on the scene this summer.
Buck Humphrey, who represents Lime in Minnesota, confirmed Friday that Duluth remains in the running.
“We’re still doing a market analysis and working with the city to see what might be possible,” he said.
The prospect of a rival service hasn’t discouraged Irvine, who said: “It’s definitely something that we’re nervous about, but we’re excited to take it on anyway.”
“If they see potential in Duluth, too, we must be onto something,” Forsberg said, expressing hope there’s more than enough business to go around.
Forsberg and Irvine began hatching plans for Leaf while enrolled in the same UMD marketing class. The couple had rented scooters on a recent trip to California and did some online research to see if such a service might work in Duluth.
They ran across a Duluth News Tribune article about Hobbs’ efforts to enact an ordinance to govern electric bikes and scooters.
That recently-approved ordinance was driven in large part by concerns about the unannounced arrival of electric scooters in other cities, and the problems that arose from their unregulated use.
Forsberg and Irvine reached out to Hobbs.
“So we met him for coffee. He laid out his proposal, and we got really hopeful then that this would actually be a thing in Duluth,” Forsberg said.
For his part, Hobbs said: “They seemed very credible and have all their ducks in a row. I think it’s pretty neat that you have a local company started by two young UMD students who are looking to enter the market and compete against a larger vendor.”
Irvine said he hopes Leaf’s local origins will prove an advantage.
“Duluth is a place that cares about local businesses. They care about local startups. They care about supporting one another.
That was one of the coolest things that I’ve noticed coming to this city. It’s one of the things I love is that it seems like everyone works together,” said Irvine, who hails from St. Michael.
Forsberg said they’re determined not to repeat the mistakes of others in the industry who did little to build local relationships before entering markets and suffered from bad publicity as a result.
“I think one of the biggest problems with these big companies and a lot of the backlash that they’re experiencing is that they’re not directly involved with the community. That’s a huge part of the problem they’re having. They’re really trying to go into cities that aren’t prepared for them,” Irvine said
“One of the big things that we wanted to do is make sure everybody’s on the same page, and we want to make sure that we’re available to the community. We’re available to the city, and we want to work with them to make sure that we’re going to have a safe, fun summer,” he said.
Forsberg said Leaf’s customers first will download an app on their cell phone and then can use it to locate the nearest available scooter. The rental begins when someone creates an account and scans the QR code on the handlebars of a scooter, unlocking it for use. At the end of a ride, the user will park the scooter and can again scan the same code to lock it in place for the next ride.
As for the pricing, Forsberg said Leaf will probably charge $1 at the start of each trip and 25 to 27 cents for each minute of use thereafter.
Users will be asked to park scooters in designated areas, at bike racks or between parking meters out of the way of others. If scooters are misparked or pose a tripping hazard, Leaf encourages people to call and either Forsberg or Irvine will personally run out to retrieve the offending vehicle.
Using geofencing technology, Leaf will restrict the area in which the scooters may be used. Initially, Irvine said it will focus on downtown Duluth, Canal Park and Lincoln Park. He said he doesn’t want customers trying to tackle the city’s steep hills for safety and scooter endurance reasons.
But Leaf could change those boundaries, said Forsberg, explaining that they’re read to adapt.
“We’re waiting to see what happens, as we get all this data about where people are going,” she said.
A fully charged scooter has a useable range of about 30 miles. Leaf will be able to track the charge on each scooter, as well as its location. As scooters begin to run low, they plan to chase them down and recharge them throughout the summer.
Leaf won’t have a storefront. In fact, Irvine said the business essentially will operate out a van.
The scooters top out at 15 mph, but Forsberg said they will probably be set to operate at a slower, safer speed along the Lakewalk.
Scooters will not be allowed to operate on sidewalks and will instead be restricted to bikeways. Irvine said users will be advised to abide by all rules of the road.
For safety reasons, Leaf plans to market its service to people 18 years of age or older.
Helmets are available by phone request, and Irvine said he will be happy to run a helmet out to anyone who calls.
Getting their business going hasn’t been easy. Irvine and Forsberg put together a detailed business plan and have been able to enlist the help of supportive family members, as well as conventional lenders, to fund Leaf’s launch.
While they declined to disclose how much money it will take to get Leaf off the ground, they did acknowledge it will exceed the cost of their college education.
But Forsberg, who grew up on a farm outside of Fairmont, said they recognize the importance of balancing both their business and their studies.
“That’s the one thing our parents have said: Stick to the schoolwork. They want us to graduate,” she said.
“We’re learning about this stuff in school — how to start a business — and it’s interesting to apply what we’re learning in the classroom to what we’re seeing in the real world now. We’ve learned more starting this up than we ever even thought we would,” Irvine said.
“It’s just opened our eyes to what really happens in a business — what are the steps behind the scene that you’ve got to work through,” Forsberg said. “You’ve got to expect the unexpected.”