Electric scooters may not be around for long

Seemingly overnight, electric scooters went from being a fun — if niche — recreational gadget to suddenly appearing on every street corner in almost every city in the US. The unexpected success of shareable dockless e-scooter companies, as encapsulated by Bird and Lime, is undoubtedly one of the biggest tech crazes of the last year.

But there’s a dark side to scooter-sharing (and I’m not talking about the vandalism or the sidewalk clutter or even all those injured riders). The fundamental numbers don’t really add up because scooters don’t bring in enough money to cover their cost. Ride-sharing is wildly unsustainable, and if the business continues on its current path, it’s entirely possible that these scooters will end up in a mass graveyard like those viral photos from China.

It all comes down to unit economics — how much revenue each individual scooter brings in for the company — and the most important number to consider is the lifespan of each scooter. The more trips and miles a single scooter can cover, the better it is for scooter companies that have to recoup the cost of each vehicle before they can start making money.

Recent research by ARK and some savvy number crunchers at Quartz and The Information provides a closer look at how much money scooter companies are losing. But to understand the nuts and bolts of scooter-sharing, we really need to look at the big picture.