Scooter Startups Are Ditching Gig Workers for Real Employees

In the earliest days of the new scooter-sharing wave, when a company called Bird, run by Uber veterans, showed up in southern California, working in the industry felt a bit like stumbling into the OK Corral. High school students scrapped for the chance to charge or fix scooters for between $10 and $20 a pop. “Mechanics” broke handlebars and wheels so they would be paid to patch them up. “Chargers” hid scooters in their garages until their owners ratcheted up the bounties awarded to catch the strays—then cashed in.

Now the startup Spin is taking a different approach to scooter operations, at least in Los Angeles: Instead of contract workers, it's hiring employees to collect, charge, fix, and redeploy its scooters every day. Those who work more than 30 hours a week are entitled to full benefits: paid time off, health and dental insurance, and commuter benefits. They’ll get a W-2 form come tax season. If the experiment works in LA, where the company has hired 45 people so far, Spin says it expects to hire more workers in other markets as well. It now operates in 12 cities and on eight college campuses in the US. In November, Ford acquired the company for a reported $100 million.

Spin is not the only one moving away from the gig economy. Bird is transitioning from using contractors to hiring salaried workers to fix its scooters in several cities, including San Diego, Dallas, and Austin. (“Bird watchers,” who help repark scooters on the street and manage the larger scoot fleet, are W-2 employees.) Lime hires mechanics as W-2 workers, while its “juicers,” who collect, charge, and then deploy scooters daily, are 1099 employees, paid per scooter.

Such evolution shouldn’t be surprising in an exploding and crowded market. Bird, Lime, Spin, Skip, Lyft, Uber, Wind, Bolt—hurl a four-letter word, and you’ll probably hit a scooter startup. As they compete for riders, they’re hunting for any possible edge in hardware and software, city relationships, and labor models. Scooter-share is a new business, and not yet a profitable one; this shift is a sign that the companies are still working out the kinks.

“Looking at this market, there has been a tendency for some companies to make it seem like everything is figured out, that the model works perfectly, that the ‘charger’ model, just like the Uber driver model, is the way forward and that’s just the way it is,” says Ben Bear, Spin’s chief business officer. Operations, he says, are at the heart of what Spin does, so it makes sense that the startup is playing with employment strategies while it seeks to expand—and catch up with bigger rivals like Bird and Lime.

Bear is still not sure Spin’s new employment strategy will scale. “It’s working well with 1,000 scooters, but up to 10,500? It’s going to be interesting whether that can hold up,” he says. If not, the company could go back to the contract-worker model. Some people who work as scooter chargers say they enjoy the opportunity to pick up extra cash in their spare time and don’t want a more permanent scooter job.

Spin also seems to think it can get better work from people who are actually on staff. It’s not the first startup to make the shift from contract to employment. Home care company Honor, delivery company Shyp, and parking startup Luxe Valet also switched from independent contractors to employees in the past five years. (Change, though, doesn’t guarantee success: Shyp and Luxe no longer exist.)

“Companies—whether they’re in the grocery delivery space or the package delivery space or the scooter space—started out thinking they would rely heavily on 1099 workers,” says Patrick Kallerman, who directs research at the Bay Area Council Economic Institute and has studied “gig economy” labor. “Then they realized that, to increase reliability, quality, customer service, certain parts of the model needed to be changed.” Of course, that comes at a cost: up to 30 percent more in payroll expense, no small line item for companies fighting to become profitable.

Another factor is safety. Consumer Reports found that more than 1,500 people have been injured in scooter crashes since late 2017, and riders have complained of shoddily repaired brakes and handlebars, and scoots that just won’t start. Spin believes it can better control the quality of scoots on the street if it requires mechanics, in its LA warehouse, to follow a list of safety checks every night. (Presumably, so do Lime and Bird, which now both have in-house mechanics.)

In LA, Spin scooter-electronics technician Rashard Wagner begins his shift at 11 or 11:30 in the morning, and leaves at 8 or 8:30 at night. He’s been working at the company for only a few weeks but says he’s enjoying it. The dental, vision, and health insurance certainly do not hurt. “I’m a technical person: I love to troubleshoot; I love to solve problems,” he says. Scooter companies are hoping there are plenty more people like him in every city.