Let’s Talk About All Those Electric Scooters

(Bloomberg Opinion) -- In less than a year, a group of fast-growing electric scooter and electric bicycle companies have stocked U.S. city streets with lightweight, dockless, connected vehicles. To some, they’re a tech bro nuisance and yet another manifestation of Silicon Valley overreach; to others, a brand-new method of urban transit for the first, last or only miles of daily travel. Bloomberg Opinion’s Virginia Postrel and Nathaniel Bullard corresponded via email on the electric scooter craze; this is a lightly edited version of that conversation.

NB: Since you’re in Los Angeles: Given that the scooter business in the U.S. kicked off in Santa Monica, and that the city recently passed a pretty forward-looking pilot program, is there something uniquely SoCal about scooters? As opposed to, say, uniquely San Francisco (where Uber began)?

VP: Starting with the riders, Southern California has several advantages for a dockless scooter business. The traffic is awful, so people are looking for ways around it, especially on short trips. The weather is good, without much rain. On major arteries, the sidewalks tend to be wide and not jammed with pedestrians or, thanks to rather absurd regulations, with outside café seating or street vendors. Although you’re supposed to ride the scooters in the street, people do so only rarely. It’s much safer to ride on the sidewalk. As a major pedestrian, I don’t find scooter riders to be a problem. Also, many Southern California beaches already have boardwalks with separate lanes for bicyclists and roller skaters, so it’s easy to add scooters to that mix.

The first place I saw scooters in heavy use was around UCLA, and the area’s many sprawling college campuses are another plus. They offer an easy early market. As the skateboard racks at Cal State-Northridge attest, scooters are also an easier-to-use version of a well-established form of sidewalk transportation. (You may have seen that California is debating whether surfing should be the state sport and getting pushback from skateboarding advocates. I’m with the skateboard faction.)

The other half of the equation is important, too, possibly more so. It isn’t enough to find people to use the scooters. You also need people who’ll pick them up and recharge them. (This Atlantic article on “Bird hunters” is terrific.) For that, you need people with cars, preferably larger ones, and space to store the scooters overnight.

In your column on scooters, you introduced the powerful concept of a “desire path,” the previously unarticulated consumer need that they serve. You wrote:

That desire path isn’t “I like to ride on the sidewalk.” Rather, it is “I want a service that isn’t a car, can travel a few miles in a personalized fashion, and can be parked off the street.” I doubt that any city could have clearly articulated, much less quantified, this “last mile” demand prior to the introduction of vehicles that could meet it. Scooter users might not have been able to quantify that need, either, until there was an opportunity.

How do you see this concept interacting with regulation and permissionless innovation, especially in the transportation arena, which tends to be highly regulated?

NB: It’s a very good question, because if we think of these scooters (or little vehicles in general) as part of a transportation system and not toys, then they exist in an established, fairly rigid environment. They’re part of a transport system just like a subway — the difference being that no one can raise venture money, contract with a Chinese manufacturer and flood a city with subways overnight!

The only thing that’s faster to deploy than scooters and bikes are ride-hailing companies, because they needn’t provide any hardware at all.

I lived in San Francisco when Uber launched. It felt like magic to me — an act of divination to bring a previously hard-to-arrange service right to me. I don’t think that Uber could have launched with permission, rather than forgiveness. It would have taken too long, it would have involved even more resistance from incumbent oligopoly taxi and livery companies, and it wouldn’t have been able to iterate rapidly.

That’s why I’m so interested to see how quickly, and willingly, scooter companies are engaging with regulators and being quite transparent about use patterns and growth intentions. Bird’s Save Our Sidewalks pledge is a good example of trying to get ahead of regulators. E-bike startup Jump — which is now owned by Uber — said the following in its filing to the San Francisco Municipal Transportation Agency:

We believe it is best to coordinate efforts through official City agency channels to ensure outcomes are aligned with the public interest. We are excited that the SFMTA permit process is now published, and commend the agency for taking a bold step toward increasing shared electric vehicles across the city.

That’s about the least Uber-like sentiment ever, for those of us who remember how Uber began!

Last thought here: Big transportation infrastructure is regulated out of necessity because of the number of counterparties involved. You couldn’t do an unpermitted subway because it requires infrastructure. You can do an unpermitted ride-hailing or dockless “little vehicle” business because the roads and rights of way already exist. You can do an unpermitted ride-hailing company without even buying any hardware, when people drive their own cars. But — and this is big distinction between ride-hailing and little vehicles — little vehicles are fleets, owned by a company. They can be confiscated or impounded, and then there’s no business to be had at all. Perhaps that’s why we see this move from permissionless innovation (or initiation) to seeking smart regulation happening so rapidly.

Or, am I not being cynical enough? Do you think companies would much rather ask forgiveness forever than get permission early on?

VP: You got me thinking about the big difference between rail and other forms of transportation. Little vehicles are the norm. Rail is the exception. The usual pattern is that a method of transportation exists and whatever comes along next starts by using the infrastructure that’s already there. People walk. Then they start to use animals or sledges along the paths they’re already taking. Then maybe they develop wheeled vehicles. They first use the old paths, then start to widen and improve them to make wheeled travel easier. Bicycles and automobiles didn’t use new infrastructure in the beginning. They simply rode on the existing roads and pathways. You could tell a similar story about waterways. People didn't build canals before they started using boats. The infrastructure improvements, coordination, informal habits and formal rules of the road come over time, as people discover what’s needed.

Rail is different because the technology demands a particular infrastructure that doesn’t already exist. It’s less adaptable, and you have to do a lot of coordination and advance planning. Indeed, up until the Civil War, different jurisdictions regularly adopted their own rail gauges as a way of forcing railroads to “break bulk,” then load everything onto new railcars. It was horribly inefficient but created local jobs.

As I wrote back in 2013, the Silicon Valley model of self-driving cars is more promising than earlier visions because it doesn’t require starting with new infrastructure. It allows trial-and-error experimentation and competing ideas rather than forcing everyone to agree in advance on just how we’ll use such cars. With cars, of course, there’s more coordination and regulation than with little vehicles, but it’s the same general pattern.

As for Save Our Sidewalks and the Jump filing, I think it’s as much about business profitability as it is about staving off regulation. They don’t want to repeat the mess that dockless bikes went through in China, which would be a quick trip to business disaster even without regulatory threats.

One of the interesting aspects of all this is that it involves Silicon Valley in negotiating what the cyberpunks called "meatspace": not just code but the physical world. Startups have to invest in — and maintain — inventories of scooters and bikes or whatever. Maybe "sharing economy" companies like Uber and Airbnb marked a transitional phase, and going forward we’ll see the Silicon Valley ecosystem creating businesses that themselves need more infrastructure.

NB: Ah, meatspace. That meatspace issue — spending much, if not most, of your time working in an abstract way with code but having it manifest itself in physical space with human interaction and implication — is very important for these companies. People do all kinds of things in meatspace, such as fall in love, get into deadly accidents and commit acts of violence (even if they might initiate them online), that have serious implications for human lives. They’re also not things that are automatic first-order effects of digital technology, but which a cynic might predict — such as using Pokemon Go to mug game players.

Is that something that transportation companies should be considering? I’d argue that they should be discussing them, at the board level: When will someone use this to fall in love? To commit a crime? What will be the first accident caused by it, and which is the first accident that that involves it but isn’t its fault? What will be the first fatality? And what response should we be prepared to give, having thought ahead about our role as facilitator or agent … or are we going to deny responsibility or involvement?

I think that many technology companies want it both ways. They want to be instrumental in change, but they also don’t want to be responsible for ill effects even if those effects are third-order and completely unintended. They want to be positive but neutral in making connections, but as this fantastic 2014 essay from Jan Chipchase states, “Connectivity is not binary. The network is never neutral.” Code and business models are ethereal; the promises they make can be utopian. The streets are the streets, hard physical edges full of things that you might not expect but that you have to deal with nonetheless.

There’s this meme that tech culture is solving one problem: “What is my mother no longer doing for me?” Or, as George Packer put it in 2013,It suddenly occurred to me that the hottest tech start-ups are solving all the problems of being twenty years old, with cash on hand, because that’s who thinks them up.” I thought of these ideas when reading this series of interviews with European venture capital investors who have looked at scooter companies, who came away mostly nonplussed. Why? Because they solved problems that were far less prevalent in better-planned cities with abundant public transportation options. For some Europeans, scooters are a solution searching for a problem, because the cities they operate in don’t have the last-mile problems of the U.S. Mom, in this case, is public planning, policy, budgeting and infrastructure spending, and societal priorities — and I guess she’s not doing them anymore for the U.S.

VP: I think you underestimate the appeal of personalized transportation, whatever the type. There’s a reason I prefer to walk rather than take the bus. But we can leave it at that.

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