E-scooter operators pull out of Yarra after council imposes drastic fee hike

Hundreds of e-scooters will be pulled out of the City of Yarra after the council voted to impose a “totally unsustainable” 400 per cent fee hike on operators.

Neuron Mobility on Friday morning announced it would cease operations in Yarra – which takes in parts of Richmond, Fitzroy and Collingwood – after councillors decided last week to increase the fee paid by operators from $1 to $5 per e-scooter each day.

E-scooter operator Neuron has decided to exit City of Yarra.Credit: Jason South

Lime quickly followed suit, declaring its e-scooters would be moved out of Yarra in April.

The council has criticised the companies – which each have 250 e-scooters for hire in the municipality – for their decision.

The exit of both companies from the municipality leaves only the City of Port Phillip with an e-scooter trial after the City of Melbourne banned e-scooters within its borders in August last year.

Yarra council officers proposed a fee hike to help cover its costs for managing e-scooters, including installation of parking bays, communication campaigns, an enforcement blitz and legal fees.

The council estimated it would spend $750,000 on managing the use of e-scooters this financial year, and claimed operator revenue was approximately $180,000.

“In order to achieve cost neutrality for council for the period of an extension, it is estimated that the fee would need to increase by $2.20 per day to $3.20 per day. If council wanted the e-scooter share to be revenue positive, then the daily fee would need to be higher,” council documents state.

Councillors then moved to raise the fee further to $5 per day, with only two voting against the motion.

A Neuron spokeswoman slammed the decision for being made without proper consultation and said that despite follow-up discussions in which the company shared trip and financial data to demonstrate the impacts, no solution was reached, leaving it no choice but to withdraw.

“Unfortunately, the figures just don’t add up,” the spokeswoman said.

“Each e-scooter in Yarra generates around $9.50 per day, but with the new $5 per e-scooter per day council fee, the remainder isn’t enough to cover staff wages, warehousing, recharging, maintenance, insurance, safety initiatives, rider education and ongoing technology upgrades.

“It wouldn’t be fair to pass such a steep cost onto riders. Our e-scooter programs are designed to provide a convenient, affordable alternative to cars, and a massive hike like this would significantly hurt rider adoption.”

Neuron’s spokeswoman said it was disappointing that some believed the company was making a profit in Yarra.

City of Yarra Mayor Stephen Jolly is confident other e-scooter companies will replace Neuron and Lime in the council area.Credit: Luis Enrique Ascui

“This is simply not the case. Since the City of Melbourne paused its e-scooter program for a reset, trip numbers have plummeted by around 85 per cent, and so has the revenue we generate from Greater Melbourne,” the spokesperson said.

“We hope to return in the future, potentially as part of a Greater Melbourne contract, but for now, the fees make it impossible to continue.”

The council’s increased fee was supposed to be in place until its contracts with the e-scooter operators ended in September.

However, because the companies have rejected the amended terms, their contracts now expire in early April.

Neuron will exit Yarra before its contract ends on April 4. Lime has decided to halt hiring out e-scooters in Yarra from next month and will attempt to negotiate a new contract this year.

Lime’s e-bikes will remain in the municipality. The council has not raised fees on e-bikes.

“Given the proposed changes to the shared e-scooter trial contract, Lime has decided to hold off on this extension,” Lime regional director William Peters said.

City of Yarra Mayor Stephen Jolly said it was not the council’s intention to force the companies out, and he said the new fee didn’t go too far.

“If very successful, profitable international companies are trying to, with a serious face, tell us they can only survive if they get a subsidy from a small council, they’re dreaming,” Jolly said.

“It’s a shame. They’ve just cracked the sooks.”

The procurement process for new e-scooter contracts will begin in coming weeks, with new arrangements expected to be finalised by September.

Jolly said some residents would be disappointed by the companies’ sudden exit, but he was confident that hire e-scooters would return to Yarra this year. He said other businesses had expressed interest.

E-scooters parked in Richmond.Credit: Wayne Taylor

“We’re not going down the City of Melbourne route of just banning them. We think they’re an important part of active transport,” he said.

“E-scooters will be back, whether it’s these companies or another.”

Yarra councillor Sophie Wade supported the original proposal of $3.20 a day, but not $5, and said the outcome was inevitable.

“It was obvious that jacking up fees by a completely random amount would lead to the e-scooter companies pulling out,” Wade said.

“Now people in Yarra are going to be denied a cheap and sustainable transport option in a cost-of-living crisis.”

Melbourne Lord Mayor Nick Reece said he stuck by his council’s decision to scrap the e-scooter trial.

“I still have people stop me in the street and thank me for bringing it to an end,” he said.

The Victorian government has been a supporter of e-scooter schemes to boost active transport, having initiated the trial of hire e-scooters in Melbourne, Yarra and Port Phillip councils in 2022.

New laws were introduced in October to allow such schemes to run permanently, as well as to introduce new penalties for any unsafe riding.

City of Port Phillip Mayor Louise Crawford said the previous council had agreed to proceed with a permanent shared e-scooter system and feedback would soon be sought from current councillors.

“We are continuing to monitor the situation,” Crawford said.

Councils including Merri-bek, Darebin and Moonee Valley have previously flagged interest in establishing an e-scooter hire scheme.

A spokesman for Public and Active Transport Minister Gabrielle Williams said while it was a matter for the City of Yarra, they encouraged the council to reconsider its decision.

“Melbourne’s scheme has been one of the most popular in the world, providing another option for thousands of Victorians to travel home safely,” she said.

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