E-xciting: The UK to legalise e-scooters

April 17, 2020

2 min read

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What's going on here?

The Department for Transport has proposed to legalise e-scooters on public roads. The proposal is part of a wider consultation aimed at reforming how we travel, paving “the way for exciting new transport technology”.

What does this mean?

Under current laws, e-scooters are illegal in the UK, albeit widely used. The current laws categorise electric scooters as motor vehicles. However, because they can’t pass the same legal regulations as cars, they’re illegal to use on public roads.

The proposal will initially allow e-scooters in four zones: Portsmouth and Southampton; the West of England Combined Authority (WECA); Derby and Nottingham; and the West Midlands. However, it is likely that we will see them widespread across the country sooner rather than later.

What's the big picture effect?

The proposal highlights the fact that the government is preparing for the advent of “micromobility”, a sector McKinsey values at $500bn by 2030. If the legislative framework is well-drafted, micromobility could support broader policy goals. These include: sustainability, inclusiveness and public health, as the new means of transport will be carbon-free, easy to use and widely available.

Moreover, opening the UK as a market for micromobility start-ups will prove to be lucrative. It will help them become sustainable. Currently, Lime and Bird, the two biggest rental companies on the market are still struggling to turn a profit. Bird spent $100m in the first quarter of 2019, but its revenue reached a mere $15m. The reason for the discrepancy was threefold:

Firstly, the quality of the scooters was low. Many of them broke under the “extreme” conditions in less than 6 months. Secondly, as a result of the “overnight” success registered in LA, Bird, as well as competitor Lime, began an intensive scaling process. In one year, the reached places ranging from Berlin and Paris, to Tel Aviv and San Francisco. Yet, thirdly, their prices remained low ($1 to unlock and $0.15 per minute to ride). Their gain per ride was lower than the cost associated. As a result, the more the company grew, the more money it lost. The situation is improving, however, with the companies rising the price per minute and building more durable scooters.

If they can tap into the UK’s potential market, there is no doubt that their revenue will greatly improve. Paris has become Bird`s most lucrative market in less than 6 months. London, an even busier capital, could take its place. For Londoners, that would be a reason to rejoice: more scooters means less cars.

The Department’s proposal and its underlying consultation are welcome. Preparing to bring up-to-date transport laws is a necessary step for the UK to become a leader in the sector. With autonomous vehicles already legal, it seems that we are in for a ride towards the future of mobility.

Report written by Bogdan Ciacli

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