Griffin on Tech: An e-scooter scandal and a CIO with billion-dollar ambition
If like me you shake your head in wonder at the terrible parking etiquette of electric scooter riders, you’ll be having a chuckle at the woes of shared scooter operator Beam.
The Singapore-based company this week had its licence to operate in Auckland revoked after revelations based on leaked messages and documents from the company showing it had put more scooters on the streets of Auckland than it was allowed to.
The Australian broke the story over the weekend, suggesting the alleged breaches were occurring across Australia and New Zealand in cities where Beam operates.
Councils limit the number of scooters licensed operators are allowed to deploy to avoid the footpaths becoming an obstacle course of scooters. But the scooter operators also pay fees to councils, based either on the number of scooters deployed, a per-ride fee, or both.
In Auckland, Beam’s licence permitted it to deploy 1,400 scooters, 450 in the CBD, a further 450 in the inner city, and 500 in the suburbs. It agreed to report e-scooter deployment numbers through the dashboard of Ride Report, a third-party data sharing platform which currently shows there are 6,164 scooters active in this schemes across New Zealand.
The allegation is that Beam “exceeded their device allowance by almost 40% of its Tier 1 and Tier 2 allocations”, underreporting the number of scooters in operation to Ride Report. Beam denies that and suggested it had put additional scooters onto Auckland streets to replace inoperable or misplaced units.
A whistleblower’s concerns
But Auckland Council, after examining the evidence of “a concerned private individual” (ie: whistleblower), wasn’t buying that explanation. It cited evidence that the breaches were intentional and has reported Beam to the Police.
“It appears that Beam found a way to sidestep these requirements, which is very disappointing and has resulted in a loss of trust and confidence in the operator,” said Mervyn Chetty, Auckland Council’s Manager of Licensing and Environmental Health.
“Beam has not provided a satisfactory response to our concerns, as such we have made the decision to cancel their licence, effective immediately.”
According to the Weekend Australian, some of the messages leaked from the company are very problematic for Beam, suggesting it cooked up a plan to exceed the scooter caps to boost its revenue.
Leaked emails allegedly record Beam president and co-founder Deb Gangopadhyay suggesting an initiative to increase the number of scooters on streets in cities by “adjusting” the definitions used to deliver data to Ride Report.
Several councils, Wellington City Council, are now investigating. It’s a major blow for Beam which has said it is open to striking a financial settlement with Auckland Council. But the erosion of trust will be hard to get past.
Shared scooter startups operate in a cut-throat low-margin industry where the path to profitability relies on getting as many people onto scooters as possible. Councils share that goal to some extent as it gets people out of cars, reducing carbon emissions in the process.
But there are ongoing safety concerns around scooter use and a deep vein of anti-scooter sentiment. If the allegations are true, Beam’s founders invented a way to boost the revenue of their startup in a bid to spur growth. Active in 60 cities across Asia Pacific, Beam reported US$53 million in revenue last year and said it was on track for double-digit profitability this year.
Is it another example of ambitious startup founders under pressure to deliver cutting corners to meet their targets? The Beam scandal will require some further investigating but again highlights the culture that can pervade high-growth tech startups that are expected to scale-up fast with a big exit being the ultimate goal.
The CIO of the Year
Hamish Rumbold
CIO of the Year winner 2024
I had a great chat on this week’s episode of The Business of Tech with Hamish Rumbold, who picked up the CIO of the Year gong at last week’s CIO Awards, beating some strong competition.
Hamish won for his leadership during five years in the CIO role at Kiwibank. He stepped down in June with a view to taking on some governance roles. But Hamish told me he’s still up for another big CIO role and outlined his ambition to help generate “$10 billion in additional market valuation for the companies he works for”.
I’d never heard a professional goal expressed in such terms, especially not by a CIO, but it makes perfect sense. With digital platforms and technology so integral to every business, the leadership and management of senior tech leadership in an organisation has a tangible impact on the bottom line. Indeed, without solid leadership in this area, a business is at risk of losing value.
It’s about people
Tech-related issues like cybersecurity and adopting AI are key themes I explored with Hamish and which are top of mind for any CIO. But its clear he places as more importance on developing his team and helping it achieve its potential.
Last year EY and the University of Oxford did some research on what makes CIO’s effective. They identified “six key levers rooted in human behaviour that, when pulled at the right times and in the right ways, can increase the likelihood of a successful transformation outcome by 2.6 times, to 73%”.
Those six levers include:
Lead - become the maestro of connection: Take the lead in fostering key connections through collaboration. Be open to new ideas, from all levels of the organization and from external networks of clients, partners and suppliers.
Inspire - support a shared vision of transformation that everyone can believe in: Co-create and effectively communicate a shared vision and take the lead on translating the vision into desired technology outcomes.
Care - take a step back and listen: Listen intently to what your people have to say and seek to tackle issues in a constructive and emotionally supportive way.
Empower: unleash the experts: Focus on the big picture. Give tech teams the freedom to meet the outcome rather than simply telling them what to do.
Build - see the humans beyond the technology: Prove the value of new, technology-enabled approaches early and enlist early adopters to bring customers and employees along in terms of realizing the vision.
Collaborate - create a culture of communication and co-creation: Work closely with the business to build interdependency across teams to manage both the emotional and rational elements of change.
Hamish Rumbold has clearly been successful in pulling some of those levers at Kiwibank. I look forward to seeing what this high-flying CIO does next.
