Shared e-scooter market in for a potentially lucrative ride

10 June 2019 3 min. read

Research from Boston Consulting Group suggests the global market for shared e-scooters will hit $40-50 billion by 2025.

Potential roadblocks, however, include fierce competition – with a dozen organizations battling for a slice of the pie – and increased regulation within urban areas due to safety, liability, and legal issues.

The study, “The Promise and Pitfalls of E-scooter Sharing,” examines the increasing popularity of e-scooters as transportation – itself a symptom of the “rapid rise of shared mobility” services such as Uber, as well as availability, accessibility, and affordability.

A Dozen Contenders Are Fighting Over a $40 Billion to $50 Billion Market

“[The] estimate of the global market for shared e-scooter rides would be about 15% of the size of the market for automotive-based on-demand mobility,” the study states. “Given that shared e-scooters are generally used more for private modes and for shorter trips, they will likely expand rather than erode the existing market for on-demand mobility.”

E-scooters taking such a market share, however, hinges on mass adoption. This means that consumers must rely on – and continue to rely on – shared e-scooters, rather than buying one of their own, or choosing another method of transportation altogether. E-scooters themselves must also be improved. As it stands, e-scooters must remain operative for nearly four months to become profitable, with most of the costs occurring due to maintenance and daily battery charging.

“Fortunately, improvements are already in the works,” the report states. “Longer-lasting or swappable batteries will reduce the need for charging and operations.” E-scooter companies are also beginning to offer more durable hardware, meaning their products will last potentially up to 10 months in the field, meaning an enormous boost to profit margins.

E-Scooters Are Best Suited for Shorter Distances

The study outlines several “critical maneuvers” that will line companies up with the best shot to become market leaders. As industry competition heats up, e-scooter providers would be wise to optimize operations, increase product durability, and attend to rider liability, ensuring that consumers and providers alike are equally protected. “Seeking favourable and civic-minded regulation at the local, state, and federal levels” is also advised, with proactive attention paid to problems such as “curbside clutter [and] realistic approaches to taxation.”

Additionally, providers must strive to remain one step ahead of the rapidly expanding market. They must be able to scale up quickly, building up a dedicated consumer base and partnering with appropriate “mobility providers” and public transportation agencies that will act as support networks. Securing funding is also essential – without deep enough pockets, e-scooter providers will be left in the dust.

“[E-scooters] have the potential to fill an important role in urban mobility at a time when solutions to congestion and pollution are urgently needed,” the study concludes. “Providers that do it right – anticipating and mitigating potential conflicts and seeking partnerships with cities and other mobility platforms – could find themselves riding high.”