A small and recently set up startup of Sweden – VOI, is anticipating to hit a positive cash flow for its ride sharing business because of a growing numbers of young people who are making use of hired electric scooters in Europe even though that growth can be a source of irritation for some pedestrians and motorists.
While admitting that safety was a primary consideration, VOI co-founder and chief executive Fredrik Hjelm said that a code of conduct had been drawn up by the company with the authorities in Stockholm for all of its operations following a fatal accident in which an an e-scooter was involved.
“Accidents are always very tragic and sad but since we’re in transportation, unfortunately there’s always a risk of accident. We can do everything we can on product operations and education but ultimately we’re in the hands of the users,” he said.
There has however also been criticism of VOI and other sharing operators as critics have put forward the case of Asian bike operators GoBee and Mobike which had to leave the European market because of intensive price wars, vandalism and regulation.
Those mistakes have been a way of learning for this relatively new business sector, said Hjelm. He added that in order to eliminate transport costs and increase product life, VOI is currently using an upgraded model that has longer-range swappable batteries.
Thousands of e-scooters have been put on the roads of European cities by sharing companies which include European startups VOI, Dott and Tier and their US rivals Bird and Lime. The companies expect a large number of Europeans adopting use of hired electric two-wheelers because the ownership rate of cars in the regions is lower than that in the United States.
However, regulations limit the scope of business for these companies. For example, riding an e-scooter on sidewalks is has been banned in France while roads or pavements are not permitted ot be used by e-scooters in Britain.
Despite this VOI is already making a profit in several cities, Hjelm said, including cities like its hometown Stockholm – where about 70% to 80% of e-scooters on the roads of the city bvelong to the company.
“Our estimate is for VOI to be cashflow positive around late next year, but within three years for sure,” Hjelm said in an interview to Reuters in an interview at VOI’s headquarters.
“Price wars never end well for anyone. So what you see now in the market is the more experienced players like VOI and Lime have rather been able to increase our average price point,” Hjelm said.
Within a year, there would be lesser number of players in the segment, expects Hjelm. He also added that his company was open to negotiate on tie-ups. “Automotive companies understand their business model is threatened. This ‘sell one car to one customer’ won’t work in the future because it’s not sustainable from an environmental point of view and not what the consumers want anymore,” he said.
(Adapted from VOANews.com)