The Rise and Reckoning of Scooter-Sharing: Economics, Operations, and Viability

This Week’s Focus: Micromobility’s Rise and Fall … and Rise.

Electric scooters hit the urban scene in 2017, quickly becoming a venture capital favorite with a projected global market value of $40–50 billion by 2025. Early excitement, fueled by rapid expansion and bold environmental claims, soon faced reality checks. Issues like scooter clutter, maintenance challenges, and regulatory hurdles surfaced, shaking the industry. Nevertheless, and despite setbacks, some companies have managed to make a comeback by focusing on financial and operational discipline, durable designs, and city collaboration. As scooter-sharing firms adapt and the market continues to evolve, will this form of micro-mobility find a sustainable path forward in urban landscapes?

People often ask how I write my weekly newsletter, which I’ve been publishing consistently every week since I started on March 3rd, 2021.

I maintain an “idea farm,” where I gather ideas over weeks, months, or sometimes even years, waiting for a trigger event to write a full article. This process involves collecting articles from academic and popular news sources, as well as writing my own thoughts. I usually write the full article on Saturday morning, edit on Sunday with my trusted editor, Anna, and publish on Monday morning.

Same is the story for this article.

I’ve been following the shared electric scooter market for years, initially with amazement at its fast growth, later with mild disappointment when they faced complexity, and around 2023, I started collecting articles on the “End of the e-scooter era” (the tentative name I gave this article). Scooter demand and use have been on the decline in major cities, which led me to believe they were a victim of their own success—a bubble fueled by cheap capital and high valuation that hit reality and crumbled under its own weight.

However, I was surprised to learn that both Lime and Voi are considering an IPO.

Why were scooters such a big promise? What are their complexities and can they be a long term viable solution?

Let’s drive deeper.

Scooters: On Hype and Growth

Shared electric scooters burst onto city streets in 2017 with promises of revolutionizing urban transit.

The model was simple: scatter dockless e-scooters around cities, charge $1+ per-minute fees, and let users unlock rides via smartphones.

Enthusiasts saw a last-mile solution to complement transit, while investors saw network effects and winner-take-all potential (narrator: neither is true).

Early startups like Bird and Lime led a rapid expansion—by 2021, shared e-scooters were operating in 270 U.S. cities and 97 European. Venture capital poured in, making Bird one of the fastest-ever “unicorns” at the time (reaching a $2.5 billion valuation in under a year).

Other entrants quickly followed: Spin (bought by Ford in 2018), Jump (acquired by Uber, offering scooters alongside bikes), and European startups like Tier (Germany), Voi (Sweden), and Dott (Netherlands).

Major milestones came in quick succession: millions of rides logged within months, nine-figure funding rounds, and aggressive global deployments. By 2018-2019, micro mobility had become a $2 billion+ VC darling with lofty claims of reducing congestion and emissions. Lime reported 6X growth in rides from 2017 to 2018, and by 2019 companies were touting international expansions. In 2019, Boston Consulting Group (BCG) estimated a potential $40–50 billion global market by 2025.

This breakneck growth often outpaced regulation—many cities were caught off-guard as thousands of scooters appeared overnight.

The initial promise of scooter-sharing was clear: convenient, affordable, and fun mobility for short trips, with bold claims of cutting car usage.

But as the industry raced ahead, cracks began to show.

Challenges and Disappointments: Crash of the Early Leaders

Despite the early optimism, many scooter startups encountered hard realities and operational and economic challenges that led to high-profile failures—notably Bird and Superpedestrian—tarnishing the industry’s luster and revealing pitfalls in the model that the initial hype had glossed over.

Bird (once the industry poster child) became a cautionary tale.

The company spent lavishly, flooding cities with scooters and outcompeting rivals, but never achieved profitable unit economics. Bird burned through over $650 million from 2020–2022 and amassed more than $1.1 billion in venture funding.

In late 2021, it went public via SPAC (always a sign of confidence and wise financial thinking…) only to see its shares plummet over 90% within six months. By late 2023 Bird was delisted from the NYSE and filed for bankruptcy. Ultimately Bird was sold for just $145 million—a tiny fraction of its former $2.5 B valuation. The company once leading the micromobility charge effectively collapsed, illustrating how growth-at-all-costs can backfire.

Other operators struggled as well. Superpedestrian—an MIT spin-off known for its LINK scooters and “smart” self-diagnosing technology—shut down its U.S. operations in December 2023 after running out of money. This came less than two years after it raised a $125 million round of debt and equity. Superpedestrian had expanded to 60+ cities in 11 countries, but high operating costs and capital intensity proved unsustainable. As one industry observer noted, micromobility startups were “very successful in raising capital” but ultimately faced unforgiving markets once investor exuberance cooled.

Beyond individual failures, broader operational challenges plagued these companies:

Scooter clutter and vandalism: Cities saw sidewalks littered with knocked-over scooters, many of which were vandalized or lost. The image below (Austin, 2019) shows scooters strewn on a sidewalk—a common sight in early deployments. Such scenes hurt public perception and spurred city crackdowns on “scooter blight.” Operators had to retrieve, rebalance, and repair scooters daily, adding to the costs.

Maintenance and safety issues: Early models were consumer-grade e-scooters, not designed for shared use, and often broke down. Hardware failures (e.g., battery fires, brake malfunctions), led to safety incidents, forcing recalls and eroding trust.

Regulatory pushback: Cities imposed speed limits, curfews, and fleet caps in response to safety and sidewalk-blocking complaints. In extreme cases, cities completely banned them—in a 2023 referendum in Paris, 89% voted to ban rental e-scooters, and the city shut all services down.

COVID-19: The pandemic in 2020 shattered economies and emptied streets, forcing scooter companies to pause or scale back. Companies laid off staff (Bird cut ~30% in March 2020) and exited weaker markets.

In short, the scooter-sharing boom led to growing pains: highly visible operational snafus and an implosion of key players.

Bird’s bankruptcy and Superpedestrian’s failure demonstrate how initial momentum can result in aggressive growth before examining whether the model actually works at scale, and lead to collapse when unit economics and execution don’t pan out. These stumbles have reset expectations and prompted the remaining companies to rethink their strategies.

Over-Supply, Competition, and Market Dynamics

One of the effects of all the venture capital flowing to this industry with the (false) belief of winner-takes-all was the unfettered competition that led to scooter over-supply, equally hurting companies and cities.

Hale Erkan, Ashish Agarwal, Kumar Muthuraman, and Ioannis Stamatopoulos analyze this phenomenon in their paper “Why So Many Scooters? A Policy Analysis.” They present analytical and empirical evidence that when multiple operators compete in a city with a homogenous service, each firm deploys more scooters than the socially optimal level in an effort to grab market share. In essence, a scooter company prefers to put an extra scooter on the street (even with low utilization) rather than leave a spot for a rival—a form of business-stealing competition. This leads to an over-supply equilibrium: too many scooters chasing the same pool of riders.

The authors employ a mixed-method approach, but first develop a parsimonious game-theoretic model to explain how competition leads to over-supply. The model assumes that consumers choose scooters randomly among available options, leading firms to inflate their fleet sizes to maintain market share. The model is estimated using granular consumer choice data from Kansas City, MO, and validated through counterfactual simulations.

The analysis confirms that scooters are indeed in over-supply in urban areas, with a 95.6% probability of finding any given scooter idle. The game-theoretic model and empirical evidence indicate that over-supply is driven by the interaction between consumer choice behavior and competition among firms.

This is because when consumers, who view scooters as homogeneous (i.e., interchangeable), choose randomly (i.e., the nearest available scooter, regardless of brand), firms have an incentive to deploy more scooters than necessary—not primarily to serve existing demand, but rather to capture a higher market share from competitors.

The data confirmed that consumers indeed tend to select scooters randomly rather than demonstrating brand loyalty, resulting in a substantial over-supply.

The simulations showed that market entry exacerbates over-supply (e.g., adding another firm in Kansas City would increase the aggregate fleet size by 30%).

Over-supply has several negative effects:

First, it diminishes per-scooter utilization and revenue, which is one reason Bird and others found their fleets averaging only a few rides per day.

Second, it exacerbates the street clutter and nuisance issues, prompting stricter regulations (which then raise costs or limit operations). Erkan et al. note that firms treating scooters as a commodity service (undifferentiated in consumers’ eyes) end up in a race to saturate valuable areas, which drives margins to essentially zero as they incur costs on many idle or underused scooters.

This dynamic explains why early market leaders still struggled to profit despite their ample funding.

Unit Economics: The Hard Road to Profit per Ride

Many of the industry’s struggles boil down to unit economics—the cost and revenue per ride.

In early operations, scooter companies’ costs per mile were higher than the revenues from riders.

Bird’s average revenue was about $2.43 per mile ridden, but total costs stood at approximately $2.55 per mile. This negative margin had to be subsidized by venture capital (for comparison, private car travel costs $0.50/mi and taxi rides cost $3+ per mile.)

The figure below illustrates the gap between revenue and cost per mile in the early model, as well as the potential for cost reduction with scale.

Several factors drove these unfavorable unit economics:

Short vehicle lifespan: Early shared scooters were not durable. In 2019, BCG reported that the average e-scooter only lasted three months in service, while it took almost four months of rides to break even on its upfront cost (at the then-average revenue per ride). In other words, most scooters died before even turning a profit.

High operating costs: Collecting, charging, and redistributing scooters daily is labor-intensive. In the early model, companies paid gig “chargers” to collect scooters nightly, charge them at home, and redeploy them by morning. BCG found operations & charging made up nearly 60% of per-ride costs (about $1.70 of a ~$2.85 cost per ride). Maintenance and repairs added another ~$0.50 per ride. All told, variable costs were so high that even a busy scooter (5+ rides a day) generated a slim daily profit—roughly $3.25 contribution margin per scooter per day—that could be diminished by any uptick in repairs, loss, or low-utilization.

Utilization rates: Profitability relies on frequent scooter usage. However, many sat idle or were out of service, and the industry averages hovered around 3–5 rides per scooter per day. While popular scooters often saw higher usage, oversupply in certain markets led to underperformance. Companies initially assumed that flooding streets with scooters would spur more ridership, but evidence suggested otherwise—New York’s Citi Bike system doubled its bike fleet, yet bike trips barely increased.

Pricing and fees: The standard pricing ($1 to unlock + ~$0.15 per minute) yields about $3–$4 for a typical 15-minute, 1- to 2-mile trip. This is relatively low, and companies have been hesitant to raise prices due to competition and affordability concerns. Additionally, some cities impose per-ride fees or permitting costs (e.g., $0.15 per ride in LA) and require operators to rebalance to underserved areas, adding cost without direct revenue. Insurance and payment processing fees also take a cut (roughly $0.40 per ride).

Given these economics, it’s not surprising that early scooter services lost money on every ride. However, the outlook isn’t all grim; operators learned from initial missteps and implemented changes.

An industry analysis estimated an average 30% gross profit margin on each scooter ride (i.e., after direct costs) by 2022. That means a $3 ride might yield around $0.90 gross profit to contribute toward corporate overhead and profit—a much healthier position than the near-zero margins of 2018. While exact figures vary by city and operator, the trend is clear: the surviving scooter companies have slowly turned many cities “unit economic positive.” Achieving full profitability remains challenging in some markets, but per-ride profitability is no longer a unicorn myth.

Scalability and IPO Readiness: Lime & Voi’s Playbook

With the era of easy money over (not just for scooters), scooter companies must now prove they can scale sustainably. Lime and Voi have emerged as examples of the pivot from growth to profitability, and their strategies (and recent financials) shed light on what it takes to be IPO-ready in micromobility.

Lime (the San Francisco-based global leader) aggressively expanded in the early years, but then made tough decisions to achieve financial discipline. Lime retrenched from unprofitable markets, doubled down on high-demand cities, and invested in more efficient hardware (including a large e-bike fleet to complement scooters). The payoff is evident: in 2024 Lime reported $686 million in net revenue (up 32% YoY) with adjusted EBITDA over $140 million – a >20% EBITDA margin.

It was Lime’s second straight year of positive free cash flow, a remarkable turnaround from the heavy losses of 2018–2019. Lime provided over 200 million rides in 2024 and has now surpassed 750 million total rides since launch. By focusing on core markets and operational excellence, Lime achieved scale with sustainable economics, making it a strong candidate for a public offering.

Lime focused on operational rigor and city partnerships, winning 90% of the competitive city permits it pursued in 2024—an indication of good relationships with regulators and communities. It complied with (and even encouraged) sensible rules on parking, rider education, and data sharing, which helped it avoid bans and PR disasters that hit others. Lime’s global scale (operating in 30+ countries) also allows it to balance seasonal demand—booming summer usage in North America and Europe, plus winter usage in milder climates like Australia and South America. This geographic breadth smooths revenue and helps year-round asset utilization. Financially, Lime has been cautious about expansion funding, relying less on subsidy per ride and more on improving margins. Its backing by Uber (which participated in funding rounds) also gives it strategic cover and potential integration with Uber’s app for user acquisition.

Voi Technology followed a similar path in Europe. After a hyper growth phase, spreading to 100+ cities, the Swedish company shifted in 2022 toward consolidation and efficiency. Voi’s CEO Fredrik Hjelm described it as moving from “growth at all costs” to “profitability first.” They cut costs, optimized operations with tech (e.g., machine learning to predict maintenance needs), and even reduced headcount. The result: in 2024 Voi achieved its first full-year profit. Unaudited results show €17.2 million EBITDA and even a small positive EBIT (€100k) for 2024—a huge improvement from their €39 million EBITDA loss in 2022. Revenue grew modestly to €133 million, which Voi attributes to measures like extending vehicle lifespan (they claim major gains there) and smart charging strategies, as well as terminating underperforming deployments.

Voi’s financial discipline has come at the cost of some scale—its valuation fell from over $1 billion in 2021 to about €340 million in 2024 in a down-round—but it has survived and now thrives where others haven’t.

Lime’s and Voi’s Successful Strategies:

Discipline in growth: Both pulled back from the “land grab” strategy once it proved unsustainable. They closed operations in cities that lacked ridership or where regulatory burdens made profitability unlikely. This focus on market quality over quantity was key.

Constant reconciliation of operational capabilities with market demand: Both pioneered improvements like swappable batteries, in-house scooter design for durability, and advanced fleet management software, reducing daily operating costs significantly.

Regulatory engagement: Instead of fighting cities, they partnered with them. For example, Voi embraced stringent safety requirements in Oslo and won the city’s trust; Lime agreed to caps and data sharing in many cities, helping secure long-term contracts. This cooperative approach both improves public perception and often limits the number of competitors in a city (benefiting incumbents like Lime/Voi who win permits).

Diversification: Lime invested heavily in e-bikes, tapping a broader user base and use-cases (longer trips, different rider demographics). Voi has begun adding adaptive vehicles and exploring transit integration. A mixed fleet can increase utilization and appeal to cities seeking comprehensive mobility options.

Path to profitability: Most importantly, the firms proved they can be profitable (at least on an adjusted basis). This credibility with investors is critical for IPO readiness. Lime’s four consecutive years of 30%+ revenue growth with improving margins show a scalable model. Voi demonstrating a full-year EBIT breakeven in 2024 is a strong signal that its business can be self-sustaining.

Mistakes They Made (and Corrected):

Hardware upgrades: Newer generations of scooters are more durable. Lime and Voi developed custom-designed models with more robust frames, better waterproofing, and swappable batteries, making them last 2–3 years or more with proper maintenance. Voi even claims some of its latest scooters have an 8-year lifespan. Greater durability spreads capital costs over more rides.

Operational efficiencies: The shift to swappable batteries eliminated the need to haul every scooter to a charging station. Now, staff (or contractors) simply swap in a fresh battery on the street, reducing downtime and labor. Companies have also optimized fleet management using data—Lime and Voi use predictive algorithms to deploy scooters only where demand is likely, and to service scooters proactively . These steps cut the daily redistribution and repair costs significantly. Lime reports that its “relocation” costs per mile have dropped as it stopped chasing unsustainable growth. Overall, the cost per ride has fallen closer to viability.

Economies of scale: Larger scale brings purchasing power (bulk orders lead to lower unit costs) and spreads fixed costs. Leading operators negotiate better city permit terms and bulk charging arrangements. Overhead (software development, corporate costs) gets diluted as the number of rides grows year-over-year.

Both firms are good examples of what I teach in my scaling class: testing whether the firm is ready to scale, focusing on alignment between operational capabilities and market demands (Alignment), scalability of the model (Scale), and whether there is a path to profitability (Efficiency).

In the first era of scooters, there was misalignment between operations and the value proposition, and no path to profitability, in which case all firms that grew for the sake of growth (remember the notion of winner-takes-all), just evaporated from the market.

Now, both are positioned for public offerings in the near future. Lime’s CEO Wayne Ting has hinted at IPO plans, and analysts speculate it could seek a multibillion-dollar valuation if markets remain favorable.

Voi is taking a slower approach, given the tougher European SPAC/IPO climate, but its profitable operations could attract strategic acquirers or public investors down the road.

Final Thoughts: Toward Sustainable Micromobility

The rapid rise and dramatic fall of certain scooter-sharing companies serve as critical lessons on sustainable growth.

The initial hype, driven by easy money and bold promises, collided with operational realities, causing the collapse of many early players. Survivors succeeded only by focusing on durability, operational discipline, and thoughtful city collaboration. Scooter-sharing can thrive—but only through careful management, realistic scaling, and close alignment with urban mobility needs.

The industry’s evolution demonstrates, yet again, the importance of aligning business strategies with genuine market demands and sustainable economics.

Yet, despite these lessons, venture capitalists will inevitably line up again, convinced once more that markets are winner-takes-all—until reality begs to differ.