Tuesday, September 17, 2024

How the e-scooter boom turned to bust after a British backlash

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However, the sector has since turned to bust amid a public backlash and investors losing faith. 

Following its demise, Ginger is selling around 300 of its scooters to be refurbished and re-used in Europe, where Hodgins says countries have been more open.

The company is not alone, however. Bird, an industry pioneer once valued at $2.8bn (£2.1bn) that conducted UK trials in Canterbury and Redditch, filed for bankruptcy in December, while another US player, Superpedestrian, also went bust.

Other players have joined forces to ride out the industry downturn. European start-ups Dott and Tier merged in January. Zeus, an Irish-based operator, has bought rival companies Zipp and Zwings. 

Troubles have continued, however. The Telegraph understands that Zego, the industry’s main insurer, recently pulled out of the UK market, in part owing to uncertainty about its future.

Unlike e-bikes, e-scooters are considered motor vehicles under British law, meaning they must be licensed, taxed and insured.

The move has forced Zipp, which was running trials in Buckinghamshire, Slough, North Devon and Somerset, to pull its e-scooters from Britain’s streets.

Damian Young, Zeus’s founder, said larger insurance companies were seeking to take advantage of the situation to charge “exorbitant” premiums. He said the company was in discussions with councils about resuming operations.

Dott recently pulled out of London in March. It said the rise of unregulated e-bikes meant it was not “financially sustainable” to operate in the capital, and blamed different rules across London boroughs.

The move threatens to leave only bigger players like Lime, backed by Uber and Google, and Swedish operator Voi, able to operate in the UK.

Bankruptcies have meant less than half of the cities that once offered scooter rentals now do so.

‘Street clutter’

Scooter operators lay the blame at the previous government’s door. Plans to fully legalise e-scooters were included in the Queen’s Speech in 2022, but weeks later Johnson was forced out of Number 10 and the promise never made it any further. 

Instead the Department for Transport (DfT) repeatedly extended trials, most recently pushing them to 2026. 

Operators and councils say the DfT has been reluctant to approve new trials, leaving cities such as Leeds, Brighton and Bradford that want to offer e-scooters unable to do so. 

Richard Corbett, a former Voi and Bird executive who now runs a start-up consultancy, says that cities also attempted to squeeze operators by awarding tenders to those who promised the biggest commissions instead of the best service. 

He adds that some cities failed to make room in car parking spaces to store scooters, instead forcing them on to the pavement. “That created a lot more friction with the public,” he says.

However, e-scooters have also faced a public backlash that has made ministers reluctant to move forward.

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