The latest victim of the sharing economy. Do CityScoot electric scooters already have a dead battery?
In 2020, just one year after its arrival, CityScoot had left Rome while from December 1st it will abandon Milan and Turin, the last two Italian cities in which the rental service was active
“We would have preferred to give you some good news…” Thus begins, sadly, the email sent by CityScoot, a Parisian startup for sharing electric scooters, to all subscribers in Milan and Turin to tell them that in December they will no longer find them on the streets the characteristic scooters with a white and blue livery. The French reality in fact leaves Italy.
WHY IS CITYSCOOT LEAVING MILAN AND TURIN?
“For some time – we read in the letter -, Cityscoot has faced significant financial difficulties. Despite our many efforts to stay open, our energy was not enough. We are forced to suspend the service in Turin and Milan from November 30th indefinitely. We have only one goal: to return. We will do everything we can to keep this promise."
The money already loaded by users on the platform can be used to rent scooters up to and including November 30th. Then to find a scooter from the company you will have to cross the border and go to France.
THE ESCAPE FROM ITALY (ON ELECTRIC SCOOTER)
CityScoot arrived in Milan with a fleet of 500 electric scooters, which gradually became 2 thousand among the various municipalities covered by the service. That things were not going well for the Parisian reality ex post can be understood by doing some research online and retrieving this old article from Roma Today : Cityscoot leaves Rome: "We focus on cities where demand is more dynamic".
It dates back to August 2020. When CityScoot sent a communication similar to today's to its Capitoline users: "Dear users, despite all our efforts to offer a quality service with a large number of electric scooters available to the city of Rome and a qualified team employed on site, we have not managed to change mobility habits."
In that case, the company was responsible for the lockdown: "Unfortunately, since the end of the isolation, our activity in Rome has never returned to historical standards, unlike all the other cities in which we operate." An explanation which, however, was not too convincing, given that CityScoot had been operating in the capital for not even a year (the then mayor of Rome, Virginia Raggi, was also present at the debut ceremony in June 2019) and left it immediately after the lockdown, in summer of '20. A very short time frame to say that racing had not returned to pre-pandemic levels.
The ecological transition and the enthusiasm of some city administrations, as well as the numerous reports with rather dubious numbers on the sharing economy in recent years have led to the birth and arrival of numerous shared electric vehicle startups. Among these, in fact, also the French Cityscoot, born in Paris in 2016 and arriving in Milan and Rome in 2019. On paper the market should have been there, also because the cities in question are gradually locking down the center and increasingly peripheral neighborhoods “polluting” traffic. But this did not happen.
THE FALLEN OF THE SHARING ECONOMY
The problem is perhaps cultural, as demonstrated by the many accidents that have occurred on rental electric scooters which have pushed Paris to ban them by law and Italy to introduce ad hoc rules of the Highway Code.
Let's not forget the bikes repeatedly thrown into the Navigli or the vandalized cars. During its short stay in Milan and Turin, Cityscooter itself suffered approximately 650 thefts of lithium "EP" batteries. “Millions of euros of damage – writes the Milanese newspaper Il Giorno – which has put the company's finances in crisis. And the decision to raise tariffs, which arrived in February this year, was of no use.”
The social networks of the Parisian startup are silent (the last post on Facebook dates back to July 21st to celebrate seven years of activity), which still includes coverage of Milan and Turin on its website, while rentals can now only take place in Paris.
Among the excellent victims of the sharing economy we remember Eni, which in 2017 withdrew its red Piaggio Mp3s from the streets of the capital while in the following year it was the turn of the Obike bike sharing service, which in Rome still has dozens of bikes to recover from the Tiber.
SHOULD WHAT HAPPENS IN CHINA PUT US ON WARNING?
When we talk about "mobility of the future" we look to China. The images , nothing short of spectacular, which immortalize thousands and thousands of bikes and scooters stacked up to form artificial hills of failed sharing startups, could be a warning to European entrepreneurs. Or similar, but even more impressive, photos and videos of electric rental cars abandoned and confiscated by the tens of thousands in an attempt to satisfy creditors.
There is an excellent precedent: the fall of Li Gang's Asian giant Bluegogo , which had scattered six hundred thousand rental bikes in China alone. The startup failed after landing in San Francisco despite raising $90 million. And leaving debts to suppliers of over 1.5 million.
THE FLAT WHEELS OF BLUEGOGO
Only a few months before the bankruptcy Internazionale presented it like this in the article “Bike sharing is experiencing a moment of glory in China”: “It was founded by a bike manufacturer, SpeedX, which produces 500 thousand a year, a portion of which takes the route of bike sharing. The competition is open and the undersigned – admitted the reporter -, who travels around Beijing with his own bicycle, must confess that he is giving it some thought: no hassles with the rack under the house – clogged up with the neighbors' bikes, rusty and dusty –, no maintenance and all for a negligible price: after leaving a deposit – 99 yuan for Bluegogo or Ofo (13 euros, free for students), 299 for Mobike (40 euros) – you spend a maximum of ten yuan per day (just over one euro).”
But then the same author left the initial enthusiasm aside and, looking at the economic data, admitted: "For now the bike sharing business seems like a Ponzi scheme that is based on the initial deposits left by those who rent them, given the low cost of the service that does not return sufficient profits. And then maintenance, repairs against vandalism, and the fight against theft are needed: a bicycle stolen and resold online – perhaps after modification and repainting – can cost up to three thousand yuan. But the three competing companies are trying to conquer the center of the ring, and they spare no expense.”
Only after a few months, at the end of 2017, Bluegogo took the books to court. Indeed, in reality something more daring happened: immediate dismissals and offices left deserted with rent to pay. At the time, the Chinese media were strangely aggressive, despite it being an indigenous reality, and speculated about the CEO's escape. It didn't happen. With sharing vehicles, after all, you don't go far.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/smartcity/lultima-vittima-della-sharing-economy-gli-scooter-elettrici-di-cityscoot-hanno-gia-la-batteria-scarica/ on Wed, 29 Nov 2023 11:22:52 +0000.