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Old Posted Jan 27, 2020, 4:12 AM
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Scooter Startups Take Steps to Curb Inefficiencies, Address Safety Concerns
By Marc Vartabedian
Updated Jan. 24, 2020 6:00 am ET

Shared-electric-scooter startups have blazed into cities across the world over the past two years. Fueled by roughly $1.5 billion in venture capital, industry leaders Bird Rides Inc. and Lime raced to set up sprawling networks of scooter fleets that users can rent with an app.

Over the past year, that breakneck pace of global growth—which has enabled users in more than 200 cities across the world to rent a scooter for a few hours and pay with their phones—has caught up with these companies.

Lime and Bird’s ambitious expansions outpaced operations set up essentially on the fly, according to more than a dozen current and former employees. The spotty logistics of their networks have weighed on the companies’ efforts to become profitable and led to safety concerns that this could endanger riders . . . .

Meanwhile, the U.S. Consumer Product Safety Commission is conducting two previously unreported probes into Lime’s scooters . . . .

Lime and Bird have spent much of the past year revamping global operations in a bid to cut costs. Lime, whose legal name is Neutron Holdings Inc., said earlier this month it would lay off 14% of its workforce and pull out of a dozen markets in the U.S. and overseas. In October, Bird said it would turn its focus from growth to shoring up losses . . . .

Parts and scooter shortages in the companies’ dozens of repair warehouses around the world have caused Bird and Lime to rush components and vehicles by air from manufacturers in China at roughly 10 times the cost of regular shipping, according to current and former employees . . . . (Lime) purchased more than 100 new vehicles at roughly $1,000 each last summer after a tool shortage prevented mechanics from repairing about 200 scooters that needed a simple fix involving the tightening of screws . . . .

Mechanics for both startups say parts shortages affected markets suddenly and would often force them to scavenge parts—including brakes, wheels and throttles—from other broken scooters to make fixes . . . . (they) routinely fixed scooters using old parts with unknown structural integrity . . . . mechanics to use their feet to bend several hundred bent scooter forks back into place . . . .
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