June 2018, London
Travel tech takes a tumble
Cities are starting to clamp down on travel disruptors like Airbnb and Uber and electric-scooter start-ups are now feeling the heat. Sally White reports
Has the shine begun to come off tech as far as travel is concerned? You have to think so if the dusty reception given by cities to the latest - fleets of motorised scooters - is anything to go by. Already hassled by the floods of traveller numbers drawn by Airbnb and creating ‘over-tourism’ and underwhelmed by Uber’s expansion, city authorities are digging in their heels at the prospect of another influx of ‘disruption’.
A wave of electric scooter rental start-ups are facing legal barriers as city authorities across the US have raced to bring a halt to the ‘dockless’ two-wheelers that have taken over their streets. New laws proposed in several cities could place a cap on the number of scooters a single company can operate. Fast-growing start-ups, such as Limebike, Bird and Spin are facing demands that they do more to educate and police their customers about safety.
These companies and others have launched thousands of app-controlled, GPS-tracked electric scooters in Los Angles, Austin, San Francisco and other cities where riders can pick them up and drop them off wherever they like. Backed by hundreds of millions of dollars from venture capitalists, the start-ups are racing to launch in as many cities and as fast as they possibly can.
What has created the revolt of the regulators is that too many riders are speeding along pavements instead of using roads or bike lanes…
What has created the revolt of the regulators is that too many riders are speeding along pavements instead of using roads or bike lanes and are just dumping their scooters anywhere when they finished with them. Apart from the safety aspects, the cities are having to spend hundreds of thousands of dollars removing them, to avoid pedestrians tripping and the creation of driving hazards.
“There is a very strong first-mover advantage,” Brad Bao, who co-founded California-based Limebike, told the Financial Times. That, of course, is just the tactic employed by Airbnb and Uber when they started – charging into cities, leaving the local authorities scrambling to work out how to handle them.
Even their own tech community has been up in arms. “The simply ‘ask forgiveness’ playbook sure feels very 2014 and out of step with where we want our tech values to settle post-‘bro’,” said early-stage venture fund manager Hunter Walk of Homebrew in his blog. (He was referring to the ‘tech bro’ label given to aggressive geeks.)
The Airbnb-Uber factor
Airbnb’s rapid growth caused a furore of complaints from hotel groups, taxi companies and in neighbourhoods in North America, Europe and Asia where homes are hard to find. The result has been a wave of regulations forcing home-sharing sites to eject certain types of rentals across all platforms. In addition, residents in many cities must register to be a host.
San Francisco, for example, only allows people who actually live in their home to rent out rooms short-term. Whole home rentals are restricted to 90 nights per year and second home owners can only rent out their homes for a month or more at a time. While new national laws in Japan may seem to encourage Airbnb-type rentals, cities there are now racing to curb them too, either making them illegal or restricting the times to winter months or weekends. Berlin has one of the strictest regulations against short-term rentals in the world – it has banned hosts from renting out their homes to short-term visitors unless they occupied at least 50% of the homes themselves.
A wave of regulations are forcing home-sharing sites to eject certain types of rentals across all platforms
Uber has been curbed in Europe following the European Court of Justice (and heavy taxi-firm lobbying) decision that it is a transport company. Uber said that: “This ruling will not change things in most EU countries, where we already operate under transportation law. However, millions of Europeans are still prevented from using apps like ours.”
What gets up the noses of many when looking at the growth of these travel disruptors is the amount of money they make. “It is clear that many of these companies continue to build their corporate empires off a basic premise of making massive profits and innovation is only possible by cutting corners,” San Francisco supervisor Aaron Peskin was quoted as saying by the Financial Times.
So, from this month most US cities are insisting on permits for the scooters, limits per operator and sharing of data with local authorities. They are also dishing out heavy fines for companies operating without licences and to riders found on pavements.
At this stage the scooter companies have not said much more than that they are seeking ways to make their customers behave. Bird has just unveiled a campaign ‘Save Our Sidewalks, or S.O.S’ and has challenged its competitors to sign on. The three-part covenant is an attempt to make the emerging industry ‘a better neighbour’.