View profile

๐Ÿข ๐Ÿš™ ๐Ÿค– Issue #32: scooters in europe; future of GPS; co-living and AmazonGo

๐Ÿข ๐Ÿš™ ๐Ÿค– Issue #32: scooters in europe; future of GPS; co-living and AmazonGo
Welcome to my newsletter, where I discuss thoughts and news on the intersection of the built world and technology #retail #mobility #realestate #tech
Please contribute to the community by forwarding it to someone who might enjoy it also.

๐Ÿ›ด Scooters in Europe; โ€˜cause you know Scooters!
You might be excused for thinking that the US scooter market is relatively mature, complete with mega-rounds, acquisitions, secondary transactions, launching of markets and retrenching of markets. Remind yourself that the scooter-conomyโ„ข๏ธ has been in existence for less than 18 months. The market is moving at hyper-speed, not only in terms of companies coming to market and scaling but also adjacent products and startups. So far, weโ€™ve seen a number of different hardware form factors, scooters-as-a-service, physical stores and charging startups.
European counterparts have, in part, looked to the US for validation and replication of business model. In recent weeks, weโ€™ve seen big early stage financings in Europe for Tier Mobility ($25m), Wind Mobility ($22m) and Voi Scooters ($50m). These companies are loading up the coffers as they battle among themselves and international players for continental market share.
By all accounts, early revenue cohorts for EU scooter companies are as impressive as the early days of ridesharing. The two-sided marketplace of ridesharing benefited from capital as a moat to actively subsidise and stimulate both sides of the marketplace. This isnโ€™t true of one sided (scooter) marketplaces - as weโ€™ve seen the best funded startups like Bird and Lime lost out on operating in San Francisco due to lack of municipal support. So on what axis will scooter companies compete?
Letโ€™s try and further understand revenue and cost drivers
Unit economics: Taking a look at the Bird data provided on 170,000 rides in the first week of May:
  • A scooter generated $3.65 in revenue per ride
  • Bird spent $1.72 per ride on charging costs
  • It spent another $0.51 per ride, on average, on repairs
  • Credit card fees cost $0.41 per ride
  • Fees to city permits are $0.20 per ride
  • Customer support adds $0.06 per ride
  • Insurance is $0.05 per ride
  • That leaves about $0.70 per ride, or a 19% gross profit margin
Single scooters cost between $450 and $600 - thus each scooter must be used for at least 650 to 850 rides before paying itself back - whilst theyโ€™re likely being used 5 to 7 times per day. Key takeaway: scooter durability is vital.
The majority of scooter operators have been using Segway-Ninebot models, though we have seen both Bird (BirdZero) and Lime (Gen 3) release more durable models. In Europe, Wind Mobility is also developing a proprietary vehicle with larger batteries, vehicle tracking and OTA updates. Quite simply, extending the useful life of these assets will be drive profitability and will be near term differentiators.
Though before making adjustments to capex and gross profit lines - itโ€™s important to be operating within multiple networks. Municipal / government support is key in order to scale into specific European cities. Through the steam rolling that happened in ridesharing (thanks Travis!), governments have become far more cautious in allowing new transportation entrants unfettered access to their populace. European cities such as London, still do not permit the use of scooters on roads or sidewalks. Fully utilised scooter networks will be a net positive to cities; reducing pollution and congestion as well as providing a cheap and rapid alternate mode of transport. If we expect European cities to continue to compete with one another on quality of life, then surely light electric vehicle networks will be a welcome force. Itโ€™s worth noting that many of the political issues caused by ridehailing were due to dissatisfaction of local taxi cartels (yeah, I just called them cartels!) - this is less of an issue with scooters.
In the immediate we can expect competition to be fought through Capex, investment in new vehicles, and positive government policy.
What we donโ€™t know:
  • Weโ€™re still early in the S-curve - how far will scooters go?
  • What % of vehicle miles travelled (VMT) will be disintermediated by scooters v public transport, ridesharing, walking? (45% of VMT are journeys under 3 miles)
  • What will the political process look like among cities?
  • How will scooter companies scale in Europe?
  • Will many of the smaller players consolidate?
Weโ€™re truly in the first innings of this new transport economy and it will be interesting to see how it pans out.
>> Whatโ€™s your view on how scooter companies will scale in Europe? HMU
Interesting Company
Italic - is a direct-to-consumer brand which connects consumers directly with luxury manufacturers of soft goods. Cutting out the middleman results in lower prices for consumers and higher margins for manufacturers
Vague Scientist
๐Ÿšฒ Mobility
Mobility is good for scientific research - Research published in Nature shows researchers who have lived in multiple locations/countries have greater scientific impact than peers
A flying plane with no moving parts - this plane uses electroaerodynamic propulsion which uses two electrodes to push air towards an aerofoil (shoutout to my engineering nerds!)
The Future of GPS - A great tweet from The Annual Position, Navigation and Time Symposium (cool kids only!). A great insight into the fragility of GPS networks. This year they discussed legality of galileo satellites, ground networks, centimeter accuracy etc.
Uber losses widen - Gross bookings and net revenue have both increased, though losses (on a GAAP basis) are $1.07bn as the company continues to invest in new products such as scooters, bikes, Eats and freight
Appleโ€™s pedestrian data - Apple is gathering higher resolution data for pedestrians on Apple Maps - tracking new pathways and foot traffic data in order to improve routing
______________
๐Ÿ™ Real Estate
Autodesk acquires Plangrid - ConTechโ€™s first big exit as Autodesk buys Plangrid, which digitises blueprints, for $875m
Softbankโ€™s $3bn warrant into WeWork - Softbank has just re-upped its investment into WeWork through the unusual structure of a warrant, which in effect acts as convertible debt. Spicy!
Perspectives on co-living - Creandum released a two part hypothesis on co-living in cities. >> I looked at this some years ago but have found generally hard to make an investment case for it right now. HMU if you disagree
______________
๐Ÿ› Retail
E-commerce financial model - Lightspeed Ventures released a standardized e-commerce excel model focused around cohorts, in order to help founders
AmazonGo and equality - in an unexpected though welcome boon for cashierless markets as implicit racial bias from shopkeepers is removed
US census data - SafeGraph have made US census data more easily parsable. You can search population, income, top brands and travel distance
Cyclists and shopping - New research from UCL shows that cyclists in London spend 40% more time in shops than drivers
Thanks for reading!
Sam
Did you enjoy this issue?
Sam Cash // Physical World Technologies Newsletter

The intersection of the physical world and technology; with a focus on future mobility,real estate, retail and cities.

Tweet ย ย ย  Share
In order to unsubscribe, click here.
If you were forwarded this newsletter and you like it, you can subscribe here.
Powered by Revue