Ford’s e-scooter company Spin has decided to restructure and leave some U.S. cities and European countries where there are apparently just too many scooters, which makes it difficult to make a profit. The move means the company will part ways with a significant number of its employees.
In an announcement on Friday, Spin CEO Ben Bear said the company was beginning to exit nearly all open permit markets, or those where multiple companies are allowed to operate, for e-scooters to accelerate its “path to profitability.” As a result, it has begun to shut down operations in Germany and Portugal and anticipates that it will pull out of Spain as early as February. Bear said Spin will also leave a few U.S. markets but didn’t provide specifics.
The CEO said that the markets in these areas “lack sensible regulations,” which ultimately affects its ability to provide a high-quality service to riders and cities.
“These places have permit market dynamics that make it difficult to identify a clear path to profitability,” Bear said. “We found that these free-for-all markets create an uncertain operating environment — marked by frequent changes in competitive landscape, no caps on fleet sizes, and race to the bottom pricing.”
Approximately 25% of Spin’s employees will be laid off in the company’s restructuring. They will be offered severance packages, an additional stipend for outplacement services, and be allowed to keep their company-issued laptops.
After the company’s restructuring, Spin will focus entirely on limited vendor markets, where cities or campuses select the e-scooters that can operate in an area through a bidding process. Bear said the company obtains twice the revenue per vehicle in these markets when compared to open permit markets.
Over the last two years, Spin has made significant changes. It shifted its focus to limited vendor markets, which now represent more than 75% of its portfolio, up from 35%. Last June, it removed the company’s co-founder CEO and installed Bear as the head. At the time, Bear told TechCrunch that Spin was hiring at “full speed” and had “ambitious growth plans.” Those plans have obviously screeched to a halt for now.