Peter Lyons: Subsidising Lime scooters is bad economics

Lime scooters at a warehouse in Kingsland, being prepared for roll out onto Auckland streets. File photo / Jason Oxenham

COMMENT

I was overseas last year for several months. When I arrived back, I was bemused by a neat row of scooters parked down the end of my street. I managed to resist a boyish urge to play dominoes by toppling the first one. I get a lot of boyish urges these days, as I appreciate my mortality.

Lime had arrived.

I really like the concept. It's innovative, free enterprise, possibly reducing the congestion on our roads and providing easy mobility. It also provides casual employment for young juicers, who pick the scooters up and recharge and re-deliver for use the next day. It's smart business use of their parents' electricity.

I suspect Lime scooters may be an example of a smart business model, but bad economics.

I am partially sighted. I walk the 6km to work each day in the city. I then teach bad economics to good kids. On my way, I listen to loud punk music on my iPod. On less energetic days, I listen to reggae. I pass many pods of scooters along the way. They whiz by on the footpath.

One caught my elbow recently. I have big, meaty elbows so it was the rider who lost out. I helped pick her up to the sounds of "No Woman, No Cry" on my device. It seemed slightly ironic. She was fortunately unharmed and very apologetic. There are some advantages to having a bog Irish, fuller figure. I hope she wasn't too shaken.

I don't use Lime myself. The last time I got on a device that required sight and balance, I did a face plant. It was on the Otago rail trail many years ago. I was passing a fully sighted friend on my bike. I very rudely informed him of his larger girth and lesser fitness. I then hit a closed gate. I landed on my face. It was a strange slow-motion facial reconstruction. The lovely ex-nurse in Lauder who snipped my hanging lip off suggested the resulting scar tissue would give me greater character. I would have preferred less character and more lip and teeth.

Lime scooters have resulted in many similar incidents plus several deaths since their introduction. They seem particularly attractive to middle-aged males who have consumed excessive alcohol. Emergency department staff have been vocal in their concerns at the impact on their workload. They now have a new breed of patients.

I am a firm believer in freedom of choice, and free enterprise. I tend to like new innovations. But I don't like subsidising a private business in my taxes or ACC levies. I don't like our hospital emergency rooms being put under additional pressure from a profit-driven enterprise.

Peter Lyons. Photo / Supplied

But banning Lime scooters may be a knee-jerk response. An alternative, market-based solution could be to require customers to take private insurance as part of signing up to the service. Another option may be for ACC to properly assess the potential liability for the company to ensure the taxpayer is not picking up the tab. I suspect the lack of historical data means the current ACC levies on the business do not reflect the true costs to society.

Uber, Amazon, Facebook, Lime are examples of disruptive new technologies. We are living in very interesting times of rapid change. But we need to ensure that the real costs of these new business models are identified and the business is required to pay these costs, such as medical care as a result of use of their product. Not the taxpayer.

• Peter Lyons teaches Economics at Saint Peter's College in Epsom and has written several economics texts.