Silicon Valley's fervent investor community is prone to manias, especially since the rise of Uber, and the latest seems to be focused on electric motorcycles and scooters. Behind the frenzy is a belief that in a world with a growing population, mass urbanisation and diminishing resources, electric scooters and bikes might well be the main form of transportation for lots of people around the world very soon. 

But will Silicon Valley necessarily come up with the solution to the problem of how people get around urban areas in the coming age of autonomous vehicles, especially what’s referred to as ‘last-mile transportation’?

There’s already plenty of money pouring into e-scooter hire startups like Bird and Lime, which operate services that rent out scooters to people for short rides, both are powered by apps that allow you to locate, hire and unlock the scooters. 

The proposition is simple. These are lightweight, easily operated, battery-charged vehicles designed to get you from Point A to Point B in congested and built up city areas. For example, instead of getting in the car to travel a couple of kilometres in heavy traffic, you use the app to find your nearest scooter and scoot your way to where you want to go. 

It’s a variation on the Uber rideshare model, scaled down from car to scooter. In fact, Bird’s founder and CEO, Travis VanderZanden, is a former executive at both Uber and its rideshare rival Lyft. Bird was launched in September 2017 and since then has raised $415 million, with valuations for the company now running between US$1.5 billion to $2 billion. It’s most recent funding round in June raised $300 million.

Similarly, Lime has attracted its share of dollars too, $467 million since launching in June 2017, as investors scramble to get on board. Lime has also partnered with Uber, which will integrate Lime scooters into its apps, and was a principal investor in Lime’s most recent funding round, which raised $335 million. 

Plenty of big-name VC firms have been effusive about both Bird and Lime, and the ‘last-mile’ urban transport space in general, with the likes of Sequoia Capital, Accel and CRV all backing Bird, while Andreessen Horowitz and GV have taken stakes in Lime.

Explaining his thinking behind investing in Bird, B Capital partner Raj Ganguly said: “Ultimately, Bird has the potential to completely change how we think about short-distance mobility.” 

However, there’s also a fair degree of scepticism about just how profitable or even viable these e-scooter companies will be.

“Doesn’t it feel like the Uber heyday all over again? On some level, I get it—but also, I want no part in it,” one investor told Vanity Fair. “There’s liability issues, regulatory issues.”

“If I’m being honest, it feels like a short-term trend,” another investor said. “It already feels like a lot of the FOMO-stricken players and firms who missed out on companies like Airbnb or Uber are diving in.”

The e-scooter companies also face hostility and opposition from local government and the general public. Some US local governments have tried to work with the scooter companies, but others have banned them outright.

Like the bike-share companies such as oBike that popped up around Australian capital cities recently and subsequently disappeared, many have accused the scooter companies of creating a public nuisance. The reasoning is mainly because of users leaving the scooters all over sidewalks, as well as zooming through crowds at (relatively) high speeds. So while some people might love the scooters, many others are not so fond.

The Uber business model has proved to be successful, but applying it to e-scooters might prove to be a novelty blip on the radar. There’s probably a real need for this type of transport solution in the high-density urban centres of the developing world, but the Silicon Valley mindset might not have the answer to this specific problem.