Lady Florence Norman is a name that most investors have forgotten. She was an English political activist who died in 1964.
Lady Norman campaigned for women’s right to vote. She wrote letters to the papers and organised protest marches. Her efforts finally bore fruit in 1928.
Today’s investors should honour her for different reasons. In 1916, she rode to work in a motor scooter, shocking English society at the time. It was rare for women to use motor transport. This act of bravery put motor scooters on the map.
Lady Norman’s scooter was called the Autoped. It was powered by gas and could travel at speeds of 25 miles an hour. As the photo shows, the Autoped looks similar to the e-scooters that are hitting Singapore’s pavements.
In those days, the motor scooter was in competition with cars, which were also a novelty. After a brief spell of popularity, these scooters were overtaken by cars. The Autoped has been in the scrap heap for the last century.
Now, e-scooters may finally be making a comeback. E-scooter usage has taken off in the last five years. The number of e-scooter users has risen from 0.5 million in 2017 to 77 million in 2022. This represents a CAGR of 173%, which is higher than the overall electric vehicle growth. E-scooter growth has whizzed past Tesla’s sales volume growth.
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A happy mix of technology and regulations powered this revival. E-scooters have improved since Lady Norman’s time when the Autoped was noisy and expensive. It cost about US$100, which was a fourth of the cost of a car. Today, an e-scooter costs less than 2% of the price of a car in Singapore.
While the Autopeds required the gas to be replenished, modern e-scooters are battery-powered. A single one-hour charge can power an e-scooter for 170 km. You could travel from Singapore to Kuala Lumpur on just two charges.
As they are battery-powered and do not require fossil fuel, e-scooters are positive for the environment.
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Local authorities ranging from San Francisco and Seoul are encouraging e-scooter use. Charging stations have been built in key locations in these cities.
More people are using e-scooters because they can be shared using an app. In the US, companies like Bird Global, Helbiz and Lime, which is listed as Neutron Holdings, allow sharing using an app. Unlike Grab Holdings or Uber Technologies, the e-scooters are shared between users. The e-scooter can be unlocked at a designated spot. Once the ride is finished, it can be left for collection.
The economics of the e-scooter favour scale. The largest capital expenditure items are the scooters. The rides are priced between US$0.25 and US$1. The e-scooter operator needs to hit an inflection point in the number of rides to be profitable. Bird is projected by the market to become ebitda-positive by FY23. Statista expects e-scooter users to double in three years. This suggests that e-scooter operators have a long distance to travel.
The sharing of bicycles using an app caused a glut in China. There was a deluge of abandoned bikes in Beijing and Shanghai in 2018. There were more bikes than people in some cities. They became a nuisance for the public. Bike-sharing companies like Ofo and Mobike had to halt operations.
Such a deluge is unlikely in the e-scooter boom. The e-scooters have tracking devices that de-mobilize it. E-scooters can be easily excluded from an area such as Raffles Place.
Although e-scooters usage has been rising, the stock prices have been faling. Helbiz and Bird have lost nearly 90% of their value since listing. The tech rout has unjustly claimed this sector. Cash flow positivity is imminent. Bird’s market cap of US$51 million ($69 million) is equal to the forecasted FY2023 gross profit.
Beam, the leader in Asian e-scooter operators, is headquartered in Singapore. It operates in South Korea, Australia, New Zealand and Malaysia. Beam sells e-scooters and operates a sharing platform. The company raised US$93 million in private equity funding from Affirma Capital. Affirma’s Asean co-head Thuy Dropsey was bullish about Beam’s “proprietary technology and advanced hardware”.
Lady Norman helped get women the vote. She may be about to make an impact in another field. The form of transport that she championed has arrived. Investors should grab a ride before it whizzes past.
Nirgunan Tiruchelvam is head of consumer and internet at Aletheia Capital and author of Investing in the Covid Era. He does not hold any position in the stocks mentioned in this column
