The world of electric scooters has waves. At this moment we are looking at what may be the second, after the first of 2017-2018. With a pre-pandemic silent retreat in 2019, companies surviving the virus are returning to regions where they had already operated a few years ago in what is already the golden moment of shared and multimodal mobility – the new buzzwords. Tier, of German origin, announced a few days ago that he was returning to Spain. Where? That remains to be seen.
Tier operated in Spain, back in 2018, in Zaragoza, Malaga and Madrid – where it competed with the almost 22 companies that broke into the burgeoning electric scooter market. They also tried to talk to Barcelona –which never accepted, nor does it accept, the scooter model– and Valencia –the same one that declared war on Lime a few months before. Spain was the second country, after his native Germany, that Tier tried to conquer. He was also, and is, one of those who best reception has had regarding these mobility services. It was an interesting market that everyone wanted to reach earlier and with power.
In September 2019, Tier shut down all regions in complete silence. Overnight, the company stopped operating. She and many others. Lime and Jump –now integrated–, Bird and some stronghold of Bolt remained in the big cities. It seemed that the explosive business of electric scooters had lived the same survival curve as its predecessors, the bikes of Chinese companies. A large investment (118 million dollars in the case of Tier until 2019, according to Crunchbase) for a rapid expansion of a still immature business that did not finish convincing even users and municipalities.
The problem of regulation, or rather non-regulation
Tier announces its return to Spain because they affirm that “there has been a change in regulation at the national and local level regarding electric scooters,” explains Jinél Fourie, Tier Public Policy Director, to Hypertextual. Before that, “the cities they did not have a regulation at the national level to clarify their right to how to handle their skates, there was not a clear enough regulation to be able to manage our operations as we wanted. “But there could not be one either, and in fact it was something that most of the companies took advantage of to enter fast in hundreds of markets.
At the beginning of the year, the regulations of the General Directorate of Traffic announced measures on the use of scooters: speed limits, a ban on driving on sidewalks and now the inclusion of insurance for drivers. It was not a surprise: most of the city councils had already approved models similar to the one later announced by the DGT.
The management of the scooter companies remained, in any case, in the hands of the City Councils. Which means that each city has its own instructions. It is precisely this point that more damage has been done to private companies and that ended up wasting millions of euros of investors in this new business.
Valencia was one of the first to legislate to remove the huge number of units that arrived from the streets. Madrid, in 2018 and with Manuela Carmena at the helm, improvised a licensing and expansion system throughout the city.. It was the beginning of the end that opened up the chaos with hundreds of abandoned scooters operating in unprofitable areas. Also for a tacit breach of the regulations by many companies.
Overnight, countless companies colonized the streets of large cities, improvising models to get out of the way. Models that did not meet the interests of many of these international companies: having to limit the use of scooters to a specific number and having to distribute them throughout the city in a homogeneous way did not pay off.
The rules of the game for electric scooter companies are changing
Now regulation is the ABC of all these companies. Not just for Tier. If before there were dozens in the cities, now they only want a couple of competitors. Dott, an investment by WeWork founder Adam Newman, put out to tender for Malaga. The same as Voi, which was presented in Seville with the condition of no more than three operators per area. Spin, a subsidiary of Ford, in Madrid and Tarragona, wants a much stricter regulation and that it is complied with.
Tier does not confirm it, but his intentions to reach Madrid and Barcelona are not in the near future. Zaragoza, Malaga or Alicante are in their pools. The reasons are clear, it is the regulation model that best suits them. Madrid continues with its licenses, these regions have opted for a tender model. One, two or in some cases a maximum of three companies operating in those areas.
“It is better to have public tenders rather than a licensing system. We have seen that almost every country where there is a licensing system does not work in the way that has been thought.”
The electric scooter gets older and no longer wants to be a toy
The pandemic has triggered the use of alternative mobility options to public transport. Avoiding places where contact with strangers is unavoidable has been the maxim. Electric scooter companies, as well as shared bikes and motorcycles, know this. Its use has also exploded, generating this second wave of shared mobility. The problem? Along with these options, the use of the private car has skyrocketed far above any other transportation option.
That is to say, you are not experiencing that definitive change from the car to the scooter and public transport as a multimodal system; although it is seeing a greater use as a replacement for the car. And part of this problem comes from the agreements between municipalities and platforms.
Using a scooter every day, plus the journey by public transport is expensive. Tier, and practically all private companies, want to achieve the mobility gold: public association agreements. The stage of the most adult electric scooter companies has arrived, or at least is starting.
“In Helsinki we have an agreement to buy public transport tickets from Tier. Also Germany. The possibility of doing that depends on how advanced the public transport APIs are. In addition, we already have 30 integrations with MAS platforms and help people to change routes in a sustainable way, “says Jinel.
At the moment, and although there is interest, in Spain there is nothing concrete. Because, in addition, that implies managing the areas furthest from the center of cities – where mobility options are limited – and giving access to public transport to other private companies. And as with everything, things go very slowly here.