Brisbane follows Auckland in cancelling contract of Singapore-based e-scooter company Beam Mobility over alleged scam
One of the world’s fastest growing e-scooter companies, Beam Mobility, has now been kicked-out of Brisbane and Auckland over an alleged scheme to raise more revenue while cheating councils.
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Brisbane has become the first Australian city to cancel the scooter licence of global e-vehicle company Beam Mobility amid a widening scandal over the tech firm’s alleged scam cheating local governments out of revenue and subverting safety caps.
The Singapore-based company is under investigation for secretly putting “phantom” scooters on streets across Australia and New Zealand in excess of contracted caps on the number of licensed e-vehicles allowed in each city.
The Brisbane City Council will now refer Beam to the corporate watchdog, and possibly police, after an internal audit found it had deployed an average of 500 extra scooters every day into the city, about 27 per cent over its cap of 1800, during a 12-month period to July.
It’s estimated Beam owes Brisbane ratepayers $330,000 in fees and will face a damages claim that the council will demand initially in negotiations with the company or through legal action.
Brisbane cancelled Beam’s contract on Friday, just two months after signing a new contract with the company that boosted its contracted cap to 3000 under an expansion of the city’s licenced number of scooters to 6000, from the previous limit of 4180.
It followed moves last week by Auckland City Council to refer Beam Mobility to New Zealand police and cancel its scooter contract with the company after it found the licenced cap had been exceeded daily by an average of 40 per cent.
The Wellington City Council also suspended its contract with Beam on Friday.
In August, The Australian revealed that executives of Beam – one of the world’s fastest growing scooter providers – was facing allegations they had “cooked up” a scheme to put an “additional 1500 scooters over cap” in cities across Australia and New Zealand to generate extra revenue and deprive local governments of fees.
Beam operates in 37 locations in the two countries, as well as in cities in Asia and Europe.
A cache of emails and messages from the company’s “War-Room” Slack chat, leaked to The Australian, showed internal planning for the scheme – dubbed the “Running Hot Project” – that was projected to increase company revenues by up to $150,000 a month.
For the right to be licensed in a city, e-scooter companies are supposed to pay registration fees on each vehicle and/or a percentage of a fare paid by riders.
It is alleged Beam provided misleading information about the number and operational status of its deployed scooters to independent monitoring app Ride Report, which tracks numbers of e-vehicles and trips for local governments.
Beam Mobility chief executive Alan Jiang in August said the company was “deeply apologetic” for exceeding vehicle allocations but insisted it was unintentional and “emphatically reject(ed) any suggestion this was a ‘scheme’ to deprive councils of revenue”
In a new statement, Mr Jiang said the company had now appointed a “top-tier Australian legal firm” to head an audit of the company’s operations. “We are working to take steps to remedy the issues with the limited number of affected councils and want to reaffirm our commitment to working with local governments through this process,’’ he said.
Brisbane City Council transport chair Ryan Murphy said a month-long internal investigation had found consistent breaches of Beam’s licence, with more than 220,000 unlicensed trips taken on phantom scooters.
He said the matter would initially be referred to the Australian Competition & Consumer Commission and, given material obtained by The Australian, possibly to the police.
“The investigation concluded Beam systematically exceeded its device cap and as a result council has terminated its contract with Beam,’’ he said. “Beam devices will progressively be removed and council will now seek to replace Beam with a new e-mobility operator as soon as practical.
“I want to reassure the public there are no operational or safety issues with the scheme and while these matters are disappointing, we remain confident e-mobility has a strong place in the transport future of our city.”
Last Monday, The Australian reported on internal correspondence between Beam executives that purportedly discussed a cover-up strategy if the alleged scheme was discovered by local governments.
On Friday, the Wellington council said a report from platform Ride Report showed Beam had operated on average 100 e-scooters more than it was meant to between July 26, 2023, and June 21 this year, which was a breach of its licence.
That licence has been suspended as of midnight on Friday and the company was told to remove its e-scooter and e-bikes fleet from the city by September 1.
Council chief planning officer Liam Hodgetts said the company would stop operating in Wellington until the investigation was completed.
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