E-scooter businesses may suffer losses of up to $1.5 million, retrenchment and closure with footpath ban
PUBLISHED ONNovember 10, 2019 2:28 AMByToh Ting Wei
SINGAPORE - A $7-million package that has been rolled out will help food delivery riders with electric scooters switch to bicycles, electric bicycles or personal mobility aids, but e-scooter retailers are still left high and dry.
One such retailer told The Sunday Times he has $1.5 million worth of e-scooters that he suddenly cannot sell.
Another company has been hit so hard, it is closing its three sales outlets, while yet another retailer said he may have to retrench staff.
They told of their surprise at the ban on e-scooters being ridden on footpaths that was announced last Monday (Nov 4) and took effect the next day.
"This is all very sudden, we are in shock," said Mr Ifrey Lai, managing director of retailer Mobot, one of the major e-scooter retailers here.
About 3,000 e-scooters, worth $1.5 million, now languish in Mobot's warehouse in Ubi.
They have been paid for and cannot be returned to the manufacturer.
Overseas export options are limited and costly, retailers said.
The new $7 million trade-in scheme announced by the Government, which could see the likes of Grab and other delivery companies working with retailers to purchase e-bikes or power-assisted bicycles (PABs) and other alternatives, is also unlikely to help, they said.
This is especially so as the scheme will last only until the end of the year, giving retailers little time to react.
Mr Lai said stringent regulatory checks required for the devices, in which retailers have to send individual e-bikes for inspection, and the lack of demand for them relative to e-scooters, had meant that retailers have not stockpiled such devices.
The general manager of Kernel Scooter, Mr Jay Jin, said: "The main reason why retailers are suffering is due to existing inventories and money invested in getting devices the UL2272 certification.
"With most of our money stuck in our inventories and spent on UL2272, many of the retailers can go bankrupt very soon," he lamented.
Many had gone out to stockpile e-scooters that meet the UL2272 safety standard, confident that demand would surge.
This was after the authorities announced that only certified e-scooters that are registered can be used in Singapore from July 1 next year.
There are about 100,000 registered e-scooters in Singapore and the majority are not UL2272 certified.
The certified devices are preferred because they pose a much lower risk of fire, but they are also more expensive to make, which makes them less attractive in many markets.
Mobot's Mr Lai said around 20 to 30 customers brought their e-scooters back in the last week, trying to ask for refunds.
"It is unlikely that demand will rise in the near future. It may rise only three to five years later when the (cycling network) infrastructure grows" he said.
A retailer, who wanted to be known only as Dannis, 45, said he plans to shut down all three of his e-scooter shops as the business is no longer viable.
He expects to lose around $100,000.
Mr Jin said Kernel Scooter, which has about 400 e-scooters in its inventory, had zero sales last week.
"The announcement caught us off-guard, and it comes right before the Singles' Days sales (Nov 11) for which we had brought in so many extra e-scooters."
Mr Wilson Seng, president of the PMD Retailers Association of Singapore, said: "There was no consultation and no warning given to us (by the LTA).
"This week has been a nightmare."
This article was first published in The Straits Times. Permission required for reproduction.
