The Big Read

The Halifax e-scooter business that’s not waiting for regulations

Max Rastelli, owner of HFX e-Scooters Riley Smith for The Logic
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Every night, Max Rastelli follows his GPS up and down the hills of Halifax, scouring the city for discarded electric scooters in a sort of daily treasure hunt. Once found, the owner of HFX e-Scooters loads the devices into his van, takes them back to his shipping container on the harbour and charges them before redeploying them for the next morning’s commute. 

As e-scooter companies Bird and Lime fight for a foothold in Canada’s biggest cities, Rastelli has partnered with a Chinese scooter giant to launch his own business in the Maritime city. He’s been operating a fleet of about 30 e-scooters since July 2019. The business is a pilot project with Segway—now owned by Beijing-based vehicle manufacturer Ninebot—through which the company provides Rastelli with e-scooters and manages an app to arrange rentals and process payments. 

The business is small, but thriving. Rastelli said he turned a profit within four months of launching, thanks to Segway covering most of his capital costs, and he plans to double or triple his fleet this spring. “There’s money to be made,” said Rastelli. “It’s solving a problem and it’s fun as hell.” But hanging over his success is the possibility his fleet might not make it to its first full season on the roads. Neither the city nor province has passed regulations letting e-scooters in public spaces, and while Rastelli says the lack of legislation gives him a bye, his more patient prospective competitors suggest he risks being banned from the market. 

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Talking Point

A Halifax entrepreneur has launched a scrappy e-scooter business in the Maritime city. But hanging over its early success is a regulatory black box: neither the city nor province has legislation allowing e-scooters to operate in public spaces. While Rastelli says the lack of rules gives him a bye, his prospective competitors suggest he risks being banned from the market.

Cities across Canada are exploring how to integrate electric scooters into their transportation networks as a way to mitigate car traffic and solve the so-called first-mile, last-mile problem—reducing the time it takes commuters to get from their starting point to public transit, and from public transit to their destination. Calgary, Edmonton, Toronto and Montreal are among the cities that have launched e-scooter pilots, attracting Santa Monica-based Bird and its San Francisco-based rival Lime to their streets. In January, Ontario launched a five-year pilot clearing the way for cities to regulate e-scooters. 

The excitement around e-scooters has catapulted Bird’s and Lime’s valuations into the billions, with a rush of competitors, including Jump and Spin—owned by Uber and Ford, respectively—hot on their heels. In November, The Logic reported that Bird Canada was preparing a sweeping expansion in the country this spring, eyeing the Toronto, Ottawa and Vancouver markets. 

Nova Scotia is among other provinces now considering how to regulate the vehicles. But the scooter frenzy, which began in the U.S. over two years ago, has generated its share of criticism, particularly over safety and accessibility concerns about discarded scooters littering streets and sidewalks. Some jurisdictions have moved to ban the devices, including Toronto, where e-scooters are prohibited until the city enacts official regulations. 

In the meantime, HFX e-Scooters is operating in what Rastelli calls a legal “grey area”— e-scooters are neither outright prohibited, nor are they expressly permitted on the city’s streets or sidewalks. 

Rastelli, who began renting out Segways about eight years ago, has had ample experience navigating the region’s micro-mobility regulations. The “Mall Cop things,” as he described them, were illegal in Nova Scotia when he launched his business. “It took about four years to change the laws,” said Rastelli. “I spent a lot of time working with the province and the city to try and get them to understand this mode of transportation that was new to Nova Scotia, but we eventually got the Motor Vehicle Act changed.”

Max Rastelli, owner of HFX e-Scooters Riley Smith for The Logic

Rastelli’s previous partnership with Segway made him an obvious choice for the company’s Segway Discovery program—a package that sets entrepreneurs up with e-scooters and a customized app to operate their business. 

“Max and Segway Discovery President and CEO Tony Ho first began conversations about two years ago regarding, at the time, a very new and unique opportunity to add scooters to Max’s already successful business,” Sarah Hill, a spokesperson for Segway, told The Logic. “The partnership seemed like a natural next step.”

Before rolling out his e-scooters, Rastelli wrote letters to the city and the province pitching them on what he described as a pilot program. “Our desire is to work with Halifax and the province of Nova Scotia by operating under a ‘controlled’ model that will help stakeholders understand and eventually create regulations for usage,” he wrote to the city—not exactly asking permission, but informing them of his plans. Neither the city nor the province said he could proceed, but they didn’t stop him, either. Less than two months later, his scooters were on the roads. 

“You’re in that grey zone,” said David Hendsbee, a Halifax city councillor with a penchant for scooting to events across the region on Rastelli’s vehicles. “They’re the cat’s meow for getting from point A to point B,” he said. “These things are coming and we have to get our rules and regulations in place to allow them on our bike lanes and sidewalks.”

City staff are reviewing surveys from residents about how to integrate e-scooters in a broader micromobility plan in Halifax, said Hendsbee; the results of the survey are expected to be made public in a report this spring. The province, meanwhile, is in the process of replacing its century-old Motor Vehicle Act with the new Traffic Safety Act. It’s expected to include stricter penalties for distracted driving and rules for autonomous vehicles. Chris Schafer, senior director of strategic development for Canada at Lime, has lobbied the government to include e-scooters in the new law, The Logic has learned, but the province hasn’t said if it will. 

Stewart Lyons, CEO of Bird Canada, told The Logic the company is waiting for regulatory clarity before entering the market. “Initially, Bird in the U.S. started in some cities without regulations, but stopped doing that because, ultimately, it doesn’t create a healthy relationship long-term with the city,” said Lyons. “We haven’t ruled Halifax out; we just want to do things appropriately and responsibly to build a sustainable program, and it’s hard to do that without following the rules.”

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Lyons noted that Rastelli’s early foray into the e-scooter realm in Halifax won’t necessarily guarantee him a spot in the market when the industry is formalized. “When the city comes up with a plan, I don’t know if what he’s doing will fit in with it. He’ll probably need more scooters; he could need better-quality scooters.” (Bird and Lime used to use Ninebot Segway scooters, like Rastelli, but their propensity to malfunction and break down led them to find other manufacturers.) 

Despite the potential headwinds for Rastelli, Lyons said his presence could be a boon to his competition. “I’m happy for him, that he’s bringing transportation alternatives to the people of Halifax even before the city is ready,” he said. “It does probably encourage them to move more quickly with the regulations, given that there’s someone already operating.”

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