E-scooter market charges ahead but faces bumpy road

E-scooters are lined up during a presentation at the DESY campus in Hamburg, Germany, April 16, 2019. (File/Reuters/Fabian Bimmer)
Updated 05 July 2019
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E-scooter market charges ahead but faces bumpy road

  • Among the best known companies having joined the two-wheel party are US firm Lime, Mexico’s Grow Mobility and Germany’s Flash, who have between them raised $1.5 billion in funding
  • Self-service E-scooter providers do not publish financial data but it is widely accepted that they are still a long way off turning a profit

PARIS: The E-scooter market has exploded over the past two years but operators are by no means assured of finding a long-term niche in the urban transport sector.
Participants, jumping on a bandwagon which saw US firm Bird first out of the blocks in 2017, must above all ensure their own survival as they confront the thorny issue of longevity of gear mostly made in China.
Among the best known companies having joined the two-wheel party are US firm Lime, Mexico’s Grow Mobility and Germany’s Flash, who have between them raised $1.5 billion in funding according to The Boston Consulting Group (BCG).
Last year alone saw global growth in the market of 76 percent according to a report by France’s Federation of Micro Mobility Professionals (FP2M) and the Smart Mobility Lab.
Bird and Lime have both muscled in on more than 120 cities worldwide and claim a combined 10 million users to date.
The BCG calculates that by 2025, the global market will be worth $40 to $50 billion.
Self-service E-scooter providers do not publish financial data but it is widely accepted that they are still a long way off turning a profit.
The BCG study calculates that four months of use covers the cost of making a scooter but rented ones tend to last for only three.
“As of today, the economy of the E-scooter does not work,” says Tyler Barrack, one of the authors of the BCG report.
“We are above the four months put forward by the BCG,” insists, however, Arthur-Louis Jacquier, director general of Lime France.
He highlights efforts by Lime to extend the life of their machines, a crucial issue given the environmental footprint of the scooters.
“We are capable of repairing an E-scooter in 25-30 minutes and we are going to throw almost nothing away,” say Jacquier.
The Quartz website carried out an enquiry last year into the use of scooters in Louisville, Kentucky, which showed that they last — on average — 28.8 days.
Bird, whose scooters are used there, contests the figures.
So far, the only clear winner from the explosion of scooter use looks to be Chinese manufacturer Ninebot, which notably is the main supplier in US rental markets.
According to Bloomberg, Ninebot estimated late last year that four of every five scooters in circulation globally came from its factories.
The spectacular growth in E-scooter use is down to a swift evolution in modes of transport.
“There has been a real move toward the electrical and toward urban mobility which has been overtaking leisure mobility,” Jean Ambert, director general of Smart Mobility Lab, told AFP recently.
Yet uncertainty persists over the market’s long-term prospects.
“How many problems are remaining, especially with regulators? Where do we park? How do we protect customers?” asks Barrack, as city and state authorities roll out legislation to cover existing legal loopholes surrounding use of such machines.
There is also the issue of how many E-scooter start-ups will manage to survive cut-throat competition which is a hallmark of the market.
“Consolidation is inevitable,” says Barrack.
Even so, Patrick Studener, Bird vice president observes: “We’ve seen many companies pivoting to get into the E-scooter business. It proves the market’s right.”
Bird recently bought out rival and compatriot Scoot for, the Wall Street Journal reported citing people familiar with the matter, $25 million.
There has furthermore been media speculation of a Lime buyout by Uber, which has already invested in the firm to add E-scooters to its car app.


Funds managing $2 trillion urge cement makers to act on climate impact

A general view of Gulf Cement Company in Ghalilah, Ras al Khaimah, United Arab Emirates July 16, 2019. (REUTERS)
Updated 25 min 52 sec ago
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Funds managing $2 trillion urge cement makers to act on climate impact

  • The cement industry produces 7 percent of the world’s carbon dioxide emissions, according to the International Energy Agency, meaning that if it were a country, it would be the third largest emitter, behind the US and China

LONDON: European funds managing $2 trillion in assets called on cement companies to slash their greenhouse gas emissions on Monday, warning that a failure to do so could put their business models at risk.
Some asset managers are ramping up engagement with heavy polluters to demand a faster transition to a cleaner economy.
“The cement sector needs to dramatically reduce the contribution it makes to climate change,” said Stephanie Pfeifer, CEO of the Institutional Investors Group on Climate Change, which has more than 170 members, mainly European pension funds and asset managers. “This is ultimately a business-critical issue for the sector,” Pfeifer said in a statement.
The group said investors had written to cement or construction materials companies including Ireland’s CRH, Franco-Swiss group LafargeHolcim and France’s St. Gobain to demand they achieve net zero carbon emissions by 2050.
They also noted that Germany’s HeidelbergCement had already adopted the target. The funds urged all cement companies to align themselves with the 2015 Paris agreement to combat global warming, engage with policymakers to ensure an orderly transition to a low carbon economy, and increase their reporting of climate risk.
“Construction materials companies may ultimately risk divestment and lack of access to capital as an increasing number of investors seek to exclude highly carbon-intensive sectors from their portfolios,” said Vincent Kaufmann, CEO of the Ethos Foundation.

FASTFACT

The cement industry produces 7 percent of the world’s carbon dioxide emissions, according to the International Energy Agency.

Signatories collectively manage assets worth $2 trillion and include Aberdeen Standard Investments, BNP Paribas Asset Management, Sarasin & Partners and Hermes EOS.
Although funds are increasingly engaging with companies from airlines to carmakers on emissions, few are calling for the systemic transformation of the global economic system that scientists increasingly argue is needed to prevent runaway climate breakdown.
The cement industry produces 7 percent of the world’s carbon dioxide emissions, according to the International Energy Agency, meaning that if it were a country, it would be the third largest emitter, behind the US and China.
With climate campaigners traditionally focused on fossil fuel companies, the European cement sector has received comparatively little scrutiny until recently.
On Tuesday, police arrested six climate activists from civil disobedience group Extinction Rebellion at a protest aimed at disrupting a site in east London belonging to London Concrete, a unit of LafargeHolcim.
In June last year, a report from think-tank Chatham House concluded that although there was no “silver bullet” to reduce emissions from cement, it should be possible to deploy a range of policies and technologies to achieve deep decarbonization.