- Shared bicycles and electric scooters have risen in popularity in the last few years.
- Now some of the companies that provide them are the topic of Fortune 500 acquisitions, a major focus of high-profile IPOs.
- The vehicles themselves have become ingrained into the fabric of cities big and small.
- There’s a long way to go before the business proves itself, but Euwyn Poon, president and cofounder of Spin, the scooter company Ford acquired for $100 million in 2018, has a plan for success.
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This story is part of Business Insider’s “On the Radar” series, a collection of stories, analysis, and interviews revealing how the transportation industry will evolve over the next decade.
Bikes and scooters exploded in recent years, and not just literally.
The industry went from virtually nonexistent in 2010, to being the topic of Fortune 500 acquisitions, a major focus of high-profile IPOs, and have ingrained themselves into the fabric of cities big and small.
Spin, one of the smaller scooter players when it was bought by Ford for $100 million 2018, has now solidified its spot among rivals Bird and Lime as one of the top providers. In the 18 months since, it has beat out well-heeled competitors for lucrative contracts in Washington, DC, and San Francisco, bringing its total to 70 markets, including many universities.
“We’re dramatically different than we were at the acquisition,” Euwyn Poon, the company’s president and cofounder, said in an interview. And even since the last time he spoke to Business Insider in March 2019, plans have shifted drastically.
At the time, Spin wanted to be in at least 100 markets by the end of 2019. It’s still about thirty short.
“We actually made a conscious decision to slow down a little bit of the rollout and to focus on the markets that are doing quite well,” Poon said, emphasizing that the company has been instead “figuring out the economics of the business.” Economics that, in many cases for the industry at large, have proven finicky.
That’s not to say the frontrunners aren’t still growing quickly, but as with any nascent industry, speed bumps have littered their paths. Lime, for instance, saw a tumultuous 2019 that included some C-suite shakeups and layoffs amid its international expansion. The company also left 12 cities in January. Bird, which is also worth $2 billion and change after its latest round, culled some of its ranks in December, including some workers acquired in the purchase of competitor Scoot.
All the while, no scooter company has publicly declared a profit. Even Uber and Lyft, which both own bike and scooter subsidiaries, haven’t disclosed any specific performance from the units to their investors.
And so Spin ended up at the current crossroads: Growing to more cities, versus focusing on places it’s found that work. Picking the latter, data shows, might be the smart choice. Researchers from Cornell University found that a 10% increase in bike availability saw a 12% increase in ridership. That is to say, small increases in the number of available vehicles — mainly scooters, in Spin’s case — beget outsize amounts of usage.
“We’re actually still figuring out what makes a market successful,” Poon said. “We have this matrix of factors that go into it: population-density, weather, urban layout, and things like that.”
But the most important metric, he said, is revenue-per-scooter-mile. That number is growing, and Ford is eager to see it stay that way.
That freedom paves the way for a third iteration of scooters. Like other companies, Spin is working on its own in-house design, with help from Ford. That’s a big departure from the first version of many shared scooters, which were an out-of-the-box model with branding slapped on. Spin also wants to develop a hybrid model that uses both free-floating and docked scooters.
“It actually works for all three constituents at once,” Poon said. “It’s a parking spot for riders, it helps draw customers to businesses who have space and want docks. And it’s also good for our operations because it drastically reduces the cost of having to move the scooter back and forth to the warehouse everyday.”
This story is part of Business Insider’s “On the Radar” series, a collection of stories, analysis, and interviews revealing how the transportation industry will evolve over the next decade.