The fight for Australia’s e-scooter and e-bike rental market will heat up this year and one global startup believes the winner will be the business most in favour with councils and regulators.
“Having more players in the market is a great thing for the industry… but we went with quite a regulated approach. We look at city councils and say ‘Hey, we want to be part of the city’. We see them as partners,” co-founder of Neuron Mobility Zachary Wang says.
The company, which Wang runs with co-founder Harry Yu, has launched its e-scooters in Brisbane and will roll out in Adelaide and Darwin this year after raising $US18.5 million ($27 million) from Square Peg Capital and GSR Ventures at the end of 2019.
Australia’s scooter and bike rental market has been fraught, with operators quitting the local market over the past few years and abandoned bikes showing up in trees and rivers instead of their designated check points.
Neuron Mobility is looking to expand across the country at the same time that ride sharing giant Uber is working to bring its e-bike rental scheme to the local market.
Wang says while competition in the market is accelerating, the business will be able to fight the Uber brand name with well-placed scooters throughout cities and by building strong ties with councils.
“We feel even for a slightly newer brand, as long as we have the scooter at the right time in the right place we can [do this],” he says.
The growth of the business in Australia has come down to its relationship with regulators: it has been able to roll out in Brisbane after winning a tender to be the provider of scooters in the city and will launch in other states through similar partnerships.
The gradual approach to expansion is what piqued the interest of local investor Square Peg Capital, says partner Tushar Roy.
Square Peg is no stranger to the shared transportation space and was an early Australian investor in Uber.
Roy says unlike traditional car ride-sharing, bike and scooter startups have to operate more like logistics operators with greater oversight over their vehicle fleets.
“The way to think about it is not like an Uber, more [like] a bus operator or a taxi operator,” he says.
“The only way to do it is to fully partner with cities.”
Neuron charges 38c per minute to rent a scooter plus a $1 fee, as well as passes that allow for unlimited individual trips of up to 90 minutes which cost $89 a month. Wang says 150,000 local users have used the system since it launched here last year.
The company believes it will generate revenue in the “tens of millions of dollars” when it is operating at scale in Australia, but declined to reveal early turnover figures.
National domination will have to come one step at a time, though: each state has different regulations for electric bikes and scooters and while keen to broker agreements with Sydney and Melbourne, Neuron Mobility has not yet set plans to launch in Australia’s two largest cities.
“We’ll use a number of other cities [first] to demonstrate the look of scooters being used the right way… that they’re something safe to use, and not a nuisance in the city,” Wang says.
Source: Thanks smh.com