The e-scooter and e-bike rental industry is grappling with significant ESG risks, driven by regulatory challenges, financial instability, and safety concerns.
Lime, Bird, and Voi face challenges in environmental sustainability, particularly regarding waste management and scooter lifecycles. They also deal with social risks, such as accidents and legal issues related to safety, prompting cities like Madrid and Paris to impose bans or regulations. Regulatory compliance remains difficult, as seen with Voi's license revocations in Brussels. Additionally, Bird filed for bankruptcy in 2024 amid financial struggles, reflecting broader industry issues.
To top it off, the industry is also under pressure to adopt more responsible governance practices, including addressing labor conditions, consumer rights, and transparency in operations.
What are the most pressing ESG challenges currently facing the electric scooter rental sector?
Read to find out.
Lime: Confronting Safety, Legal, and Environmental Challenges
Lime has faced significant ESG risks, including scrutiny over safety and maintenance issues related to its scooters, which have resulted in lawsuits and fines from local authorities like TfL and Brent Council. Environmental concerns arise from accusations of e-bikes being dumped in rivers. The company also struggles with legal troubles, facing sanctions in Andalucía and disputes over permits in Brussels and Madrid. Financially, Lime has exited several markets and laid off 14% of its staff, highlighting its vulnerabilities in governance, environmental, and social responsibilities.
Key Controversies:
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- Lime faces fines in London
- Lime bikes face expulsion from Brent over unresolved public disruption
- Lime pulls its scooters out of 12 markets and lays off staff
- Lime Bikes Banned in Brussels
- Lime bikes dumped in canals and rivers 'posing pollution risk'
- Lime withdraws bikes from Madrid as city revokes permits
- Paris to bans electric scooters amid road safety concerns
- Lime faces class action over defective scooters and customer injuries
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Bird: Governance, Safety, and Market Challenges
Bird has been facing significant ESG risks following its 2024 Chapter 11 bankruptcy due to severe financial issues, resulting in market exits, layoffs, and scooter scrapping. Legal challenges include lawsuits over scooter misuse in Denver and a class action in Austria over unfair liability clauses. Safety concerns in cities like Zaragoza and Málaga have led to revoked operating licenses, while maintenance issues and parking violations in Freeport and Appleton have harmed their reputation. Despite restructuring efforts, Bird’s recovery path is uncertain, exposing it to long-term governance, operational, and environmental risks.
Key Controversies:
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- Scooter sharing company Bird files for bankruptcy
- Securities Class Action lawsuit
- Bird exits multiple markets due to financial struggles
- Bird plans to layoff 23% of staff
- Bird on the hook for bad scooter and e-bike behavior in Denver
- Freeport City Council ends Bird scooter agreement over safety and maintenance issues
- Bird Austria faces lawsuit over unfair liability clauses
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Voi: Regulatory Struggles and Public Backlash
Voi Technology faces significant ESG risks linked to financial issues and regulatory challenges. In 2024, the company laid off 120 employees to improve profitability. It is disputing the termination of its scooter service in Seville and license revocations in Brussels and Bremen. Ties to sanctioned Russian oligarch Alexei Mordashov have raised scrutiny in cities like Liverpool and Bristol. Additionally, the company is facing consumer complaints about misleading advertising and safety issues, including a scooter fire in Bristol.
Key Controversies:
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- Sevilla ends scooter service; Voi disputes decision
- Voi lays off 120 people; around 12% of its workforce
- Voi faces scrutiny over Russian ties and potential license revocations
- Voi loses Brussels appeal, and must remove 3,000 scooters
- Voi leaving London over regulatory challenges and financial struggles
- Voi in court over approval dispute in Bremen
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Conclusion
The electric scooter and e-bike rental industry faces significant ESG challenges that place its future sustainability and growth on shaky ground. Companies like Lime, Bird, and Voi must address regulatory compliance, safety concerns, and financial instability to regain public trust. By prioritizing responsible governance, enhancing safety measures, and demonstrating commitment to environmental stewardship, these firms can pave the way for a future where micromobility thrives as a safe and sustainable transportation option.
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