San Francisco resident Michael Keating says he has the answer to getting around slow buses, expensive cab rides and parking nightmares. Keating has crossed the smartphone with the electric scooter to create what he says is a greener, faster, and much cooler way to get around town. His start-up is called Scoot Networks.
“Scoot’s the only form of transportation in cities that is both fast like a taxi and affordable like mass transit,” said Keating. “It’s also really fun.”
Keating thinks his idea could change how YOU get around town, so CNBC gave him 60 seconds to prove it. Can he persuade you and a panel of experts to go along for the ride? Click the video to see his pitch and the electric scooters at the heart of his big idea.
Are electric scooters the future?
Bike and car shares have hit cities like Seattle, New York, Paris and London, but Keating believes the next wave of shared wheels is the green scooter. He’s launched the first shared electric scooter network in San Francisco, where users pay a $5 monthly membership fee so they can scoot around town for 5 bucks an hour, and a dollar more for each additional hour (the company’s most popular rental plan).
“The big difference between scoot and mass transit is you get to drive yourself and you can stop whenever you want and you can go wherever you want to go,” Keating told CNBC.
Scoot Networks’ fleet are accessed by the start-up’s mobile app, which lets users know where scooters are available and the status of the vehicle’s battery life.
To unlock one of the company’s scooters, riders have to dock their smartphone (iOS (AAPL) or Android (GOOG)). The phone then acts as the vehicle’s dashboard, keeping track of battery level, cashless payments, maps and parking availability in all 12 scooter docking stations around San Fran.
While it’s similar to a bike share, this scooter share comes with a few more rules: Riders must be 21 years old, have a driver’s license and wear a helmet. In addition, the company requires all first-time riders to take an in-person driving lesson before taking off.
“Seventy-five percent of our riders have never been on a powered two-wheel before. We teach them to ride, they jump on, and they love it. And they ride repeatedly,” Keating said.
The safety lesson sounds like a good idea since these scooters can hit 30 mph.
Keating told CNBC that Scoot Networks has over 1,000 members with 36 scooters available in San Francisco. “We plan to double our scoot fleet in January,” he said.
Gaining traction on a growing trend
Navigant Research reports that sales of e-scooters and e-motorcycles will grow ten-fold in North America from 4,000 in 2012 to 36,000 in 2018.
According to a report by Pike Research, the number of electric scooters hitting roads in Asia where the Scoot Networks’ vehicles are made will increase nearly from 12 million in 2012 to 103 million in 2018.
Power Pitch panelist and Lightbank partner Paul Lee was apprehensive about scaling Scoot Networks outside of sunny San Francisco.
“In places like ... New York and … Boston, we have this thing called snow, and so I'm just wondering as you expand into these markets how do you see operating in those markets where weather is an inhibiting factor?”
Keating explained that most cities that have a winter also have a bike-share system. “We can see precedence for on-demand two-wheel transportation in these cities.”
Host Mandy Drury was concerned about costs of running the business.
While parking, insurance and maintenance play a major factor in the company’s expenses, Keating told CNBC, “we're actually making enough money from the scooters to support all those direct costs and generate a positive gross margin.” However, he would not reveal the exact amount of revenue of his company.
While Keating wouldn’t talk specifics, he said the company plans to expand to an East Coast city next. Keating also told CNBC he is interested in expanding into Europe. Scoot Networks raised $1.9 million from investors including Joanne Wilson, Rodney Aiglstorfer, Tom Dinwoodie, Jerry Fiddler, Lisa Gansky and venture capital firm Maveron.
Watch @ScootNetworks founder Michael Keating @mbkeating deliver his 60-second pitch to see if he can get three INs on his two-wheeler network from a panel that includes @Lightbank partner Paul Lee @iPaulLee, Founders Fund principal Geoff Lewis @justGlew and CNBC host Mandy Drury @MandyCNBC.
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--Additional Reporting by Joanna Weinstein
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