The network effect would be fairly strong within a regions/city. Though there's nothing natural about it, there are pragmatic barriers to this that would give a deployed service provider a quasi monopoly in a city. You need to have enough of them out there, you can offer discounts to flush out competitors, brand recognition. Also things like sign ups: if someone is signed up with an incumbent, it would be easier for them to just take that Scooter as opposed to an opponent.
It's a crazy play, but if scooters 'become a thing' then it's a good deal.
There is no network effect like Uber/Lyft. Uber/Lyft traverse geographical boundaries, stitching together markets. Scooters don't. Uber/Lyft have network effect on the driver side. Scooters don't.
Installing and signing up for an app is high friction, and integrating with every country's payment providers is a pain in the ass.
Basically, it's the Uber effect -- I want to get off the plane anywhere in the world, take an Uber downtown, and then ride a scooter inside the downtown itself, and it should take less than five seconds to open my phone and start riding.
“I think moats are lame,” Musk told analysts on Tesla’s first-quarter earnings call Wednesday. “They are like nice in a sort of quaint, vestigial way. If your only defense against invading armies is a moat, you will not last long. What matters is the pace of innovation, that is the fundamental determinant of competitiveness.”
I agree there isn't a great one, but there are some small ones.
You could get to scale quickly and become the default to check. So just habit.
Regulation, as cities clamp down on scooters they will probably entrench the first entrants.
Stable oligopolies have very nice margins, you don't have to be a pure monopoly.
Also at scale you can experiment until you actually find a moat. For example Uber/Lyft don't really have that big a moat, you'd just need a couple thousand drivers to compete in a city.
But with a big market share they get to figure out Lyft line (multiple pickup for shared rides), Lyft shuttle (fixed route, shared rides), Uber express pool (gather for shared rides), Uber pool (multiple pickup for shared rides). These each need a lot of existing customers to work, so to compete you'd need 2000 drivers + 50,000 customers.
Human behavior maybe? I know it's almost no effort to install a new app, but Ofo and Lime were the first rideshare bikes in my town and since there are plenty of their bikes around I haven't bothered to install any of their newer competitors' apps.
They have a network of independent contractors (regular people) that collect scooters off the street at night, charge them, and reposition/place them in the morning. The companies that win in the dockless electric space will be the ones that can most efficiently externalize these costs, not the ones who arrive first or buy the most scooters.
1. the cost of having and maintaining a fleet of scooters
2. the network of flexible staff charging scooters
3. proprietary battery packs
4. the network of flexible staff moving the scooters to better locations
5. exclusive access to a scooter with a performance profile that the rest of the market cannot match (think tesla).
x. contractual moat
1) will not stop startups with access to funding from entering the market. Providing service will require a fleet of these lite EVs and as the economics becomes obvious, the companies will merge (so they share overhead costs) until there are only one or two fleets.
2) Is very short term, because eventually the companies will figure out that they can get their users to charge the scooters themselves - by literally bringing their own battery pack (it's pretty portable - see https://electricscooterparts.com/batteries.html) to the scooter and plugging their battery in. The scooters will validate the powersource to ensure it's safe and that will be the end of the "paying random people to charge scooters" business.
3) They can't even charge for proprietary battery packs and use that sunk cost as a moat, because with VC money, competitors will just give away their own proprietary battery packs. Maybe the switching cost will be the time it takes to receive your free battery pack in the mail, but you'd just order a free one from each competitor in your area, so this is an insignificant moat.
4) Is also relatively short term: They will also eventually tell users where they are allowed to leave the scooters, and charge people who don't comply. They may frame it as a discount, but.... In the end the hard work will be outsourced to customers, which means there will really not be lock in. Any leftover work will eventually be done by professionals, or maybe by a smaller network of people moving scooters, if they are cheaper.
5) This is the best moat, but it's similar to the moat iphone used to have. They will need patents and to basically be on the forefront of the industry, forever. Boosted Boards is likely to wind up occupying this position, though they are likely to not directly operate their scooter rental product, but instead sell the scooters in an exclusive agreement to a particular company that turns around and wins the market with lower costs and higher reliability. Boosted would use their monopoly position to extract as much profit from that partner as is possible while allowing the partner to still be cheaper than getting and maintaining other scooters. Eventually their partner will try to clone their product and get it cheaper elsewhere, unless Boosted's patent game is very strong.
x) I think there's another possible moat. A particular service provider may be able to force users to agree that they only use their own boards in order to have access to lower marginal cost. Users may get a discount for not having the competitor's app on their phone. Alternatively, a provider might allow users to buy like $500 credit up front for a significant discount to achieve similar impact.
Scooters have actually been getting slower, not faster. Bird has been replacing 15mph models with 12mph in Santa Monica. These are no doubt cheaper, but also elicit less complaints from pedestrians and helps please the city council - who already hates them and is ordering them to remove 2/3 of their scooters.
As for battery packs. There is no way that will happen. Riding a short term over-priced rental scooter instead of walking or taking a bus or owning a cheap crappy bike is a luxury. The only people you could convince to charge the scooters for you carrying around battery packs is poor people and they aren't the target market. People here say they are into "Birding" meaning they go around bars on birds at night socializing. That's the sort of customer they have. They aren't going to carry battery packs around for the company.
The startup I would build with these is to cater to companies - provide these as an amenity in offices where you will service and support them and the company can let employees take them to and from the office.
FB did this with their bike shop - I was able to checkout really nice bikes for weeks at a time from the shop to ride to and from commuter vans...
