Will Uber disrupt itself with its Jump scooters?by Peter Griffin
Tuesday night in Wellington arrived with a sight unfamiliar to the capital – red and pink electric scooters dotting the city’s footpaths.
Around 800 electric scooters arrived in Wellington this week, with local start-up Flamingo and Uber-owned Jump launching at virtually the same time, in a trial supported by the Wellington City Council. Both companies rely on the user’s smartphone to unlock the scooter which costs $1 then $0.30 per minute of riding thereafter.
Wellington could have introduced Lime scooters, which are available in the Hutt Valley, before Christmas, says mayor Justin Lester. So why didn’t it?
“Good planning,” he laughs. Lime had applied to be part of the Wellington trial but a shaky start in Auckland that produced a series of accidents, hundreds of ACC claims and then a dangerous firmware glitch that caused some Lime scooters to unexpectedly lock up mid-ride, gave Wellington councillors pause for thought. There were also plenty of rivals wanting to launch in the capital, which was also the first city in Asia Pacific to see Jump scooters appear.
“We said we'd take our time,” says Lester, whose own daughter “came a cropper” while riding along the waterfront on a regular scooter, grazing her legs.
“There will be accidents,” he admits.
“We are just asking people to be responsible, to use common sense.”
The Jump scooters come with a number of built-in functions that are aimed at avoiding the high-profile injuries that accompanied the Lime launch. The top speed of the scooter is limited to 19km/hr, less than Lime’s 27km/hr (on the flat) and GPS-based “geo fencing” limits the areas the scooters can be used.
Revellers hoping to hop on a Jump on the way home from a bar on Courtenay Place will be out of luck – the scooters can’t be used on the street after 9pm each night. Likewise, Wellington’s pedestrian-heavy Golden Mile is off limits as well as the Botanical Gardens.
“Our preference is for people to use them on the road,” says Lester.
“If you don't feel safe on the road because it is too busy, then go on the footpath.”
Helmets are being made available for scooter riders, but if other scooter companies’ experiences are anything to go by, few riders will wear them.
Wellington’s narrow footpaths and numerous one-way streets would seem to pose some additional safety hazards for scooter riders, but Jump’s general manager Henry Greenacre says there was “good general bike usage and culture” in Wellington, which put the city in a good position to adopt scooters.
“I don't think Wellington has anything in particular to fear,” says Greenacre, who oversees 30 staff based at Jump’s operations centre and warehouse in Petone.
Researchers say it is too early to determine whether scooters are likely to pose an unacceptable public health hazard over time.
“Taxpayers meet the costs of these injuries and ACC claims, which are an added burden to the already over-stretched public health system,” wrote University of Otago public health researchers in a piece published on Sciblogs.
“In an optimistic scenario, the number of e-scooter crashes reported in New Zealand may decline as users become more experienced riding these devices and safer usage practices evolve (e.g., regular helmet use),” the researchers suggested.
But they also pointed to one of the largest studies so far of scooter accidents, which looked at 249 injuries sustained by e-scooter riders and non-riders who reported to emergency departments. Head injuries (41 per cent), followed by fractures and soft tissue injuries were the most common injury types.
Around 11 per cent were sustained by underage riders – e-scooter companies require riders to be over the age of 18. Around five per cent had a blood alcohol level greater than 0.05 per cent or were considered by a doctor to be intoxicated.
Only four per cent of injured riders wore a helmet. Helmet use is patchy at best when it comes to e-scooter use, despite efforts by some scooter companies to make helmets available.
“It is the law but at the same time, it isn't the highest priority for the police,” says Lester, who got around on a bike without a helmet while living in Germany and Japan, but felt no less safe without wearing one. He suggested the law needed revisiting.
“If people are being silly, then [police] clamp down on it,” he adds.
A code of practice will cover the operation of the scooters with the 18-month trial to be evaluated at the six-month mark. The Council will raise some money through licence fees, with Jump and Flamingo having to pay $615 plus $12.50 per scooter to support a public education campaign.
With the scooters virtually the same technically – both are Segway NineBot models – what is there other than marketing to separate Flamingo and Jump in the minds of would-be scooter riders?
Uber’s multi-mode transport play
It is here that Jump is likely to have an edge, with its scooters available in Uber, the country’s most popular ride-hailing app. A simple tap in the app changes transport modes from cars to scooters.
“What we have seen in places like San Francisco, is where traffic congestion is really bad, people will look at the app, see how long it takes for a car to get to them and then for them to get from A to B, and then decide it may be easier to jump on a bike or scooter,” says Greenacre.
It’s a winning combination for Uber, which acquired Jump last April. If Uber’s surge pricing for car rides or lack of available Uber drivers puts off users, they may be inclined to hire a Jump scooter instead, with Uber clipping the ticket.
That’s certainly been the case for Jump’s electric bikes, which are available in US cities. An analysis by Uber of early electric bike uptake showed that many Uber customers were opting for a Jump bike, particularly between 8am and 6pm, when roads were most congested. That led to 15 per cent fewer Uber trips taken during the day. But Uber use was higher during the nights, when riders might be less likely to get an e-bike.
The data shows Uber need not be worried about bike and scooter usage eating into its car revenue. Overall, combined Uber and Jump usage was up 15 per cent in that cohort studied. Uber’s efforts to cover numerous modes of transport is integral to its business model, which also included food delivery through Uber Eats and development of driverless cars, which it hopes will one day replace the thousands of human drivers it currently matches with customers all over the world.
Newly listed, but still losing billions of dollars each year, Uber is under pressure to makes its vast shared transport network finally produce profits. Greenacre says there are no plans at present to apply surge pricing to Jump scooter use in peak times.
“If you look at uptake of Uber and Uber Eats, two new ways of getting around and ordering food, Wellington has had some of the fastest and best adoption. I don't see why scooters are going to be any different to that,” he says.
“I think we are going to find very quickly, that 800 scooters is not enough.”
For Lester, facilitating e-scooter and bike and car sharing schemes is about getting people out of cars and reducing pressure on the city’s transport infrastructure.
“We want this to be a legitimate transport means. We want to have them at the railway station, the bus hubs, so people can get on and off and park and ride. Because it is such a compact space, you can ride one from Newtown or Mt. Cook,” he says.
“We don't want people to be in a car unless they really need to be.”
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