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Case Study on Sustainability and Business Ethics - Inner City Scooters

Case Study on Sustainability and Business Ethics - Inner City Scooters

1.Describe the organisation you have chosen. 

The organisation I have chosen for the purpose of this case study is Inner City Scooters (ICS). ICS is a micromobility company based in Dublin. We sell electric bikes, electric scooters (personal electric vehicle (PEV), accessories, parts and also repair PEVs. ICS was founded over 4 years ago on June 2020 by Daniel Adigun (myself). I am the sole director and shareholder. 


We have grown a lot since 2020. Prior to starting this business, I worked in AXA insurance company as a claims handler for 2 years. In 2020, the Covid pandemic hit and the whole company had to work from home and everywhere was closed. This meant I had to stay at home and work. Personally, working from home didn’t suit me as I’m an active person. I had a lot of free time so I started buying random items, mostly electronics and selling online, mainly from the social media platform snapchat. One day, I bought an electric scooter for €200 and posted it on snapchat and around 20 people messaged me instantly. On my drive home from buying the scooter, I found a buyer and instantly sold the scooter for €300. I immediately made 50% profit. This point was a eureka moment for me. I had noticed that there was already a strong interest and demand for electric scooters and immediately I identified a gap in the Irish market for electric scooters. According to statista there was only 10 million e scooter users worldwide and by 2022 there were 77 million. This figure has grown since and it is expected that there will be more than 110 million users worldwide (IAA, 2024). 



 

In February 2021, I opened up our first physical store in Inchicore selling PEVs. Some of the scooters had issues and it wasn’t sustainable to send them back to manufacturers in China so we had to learn more about the inner workings of the PEVs. This is how we started doing repairs and selling spare parts. By February 2022, we had an annual turnover of just over €350 thousand and our net profit was €47 thousand. This is excellent for our first year as a store considering we made a lot of mistakes and spent a lot of money running the store and buying stock that didn’t sell i.e. poorly built scooters, parts that were not required, and getting scammed. 

In 2021 I hired and fired around 8 people, at one point, staff were coming in and out like a revolving door. Eventually I hired a serious man who was also very interested in the electric scooter industry. 3 years later, he still works for me. Since 2020, my staff had grown from 1 reliable employee to 7 reliable employees. This growth is due to the demand for our products and services.

In 2023, we had an annual turnover of over €800,000. I would consider ICS a global company due to our website sales coming from all over Europe. Also, we do a lot of purchasing oversees, we have a warehouse and team in China. However, based on information from the European commission, we are defined as an SME due to having less than 10 employees and no more than €2 million in annual turnover (BITC, 2017).

I have selected to write about Inner City Scooters because I own this company. This case study will give me an opportunity to investigate our sustainability practices and development in detail. This will populate ideas on ways we could improve for the foreseeable future. 
 

2.What are the current sustainable pressures facing your chosen company and its industry? 

New E scooter and E bike laws
As of 20th of May 2024, regulations surrounding the use and specifications of electric bikes have been officially put in to law in Ireland. This statute is called the ROAD TRAFFIC (ELECTRIC SCOOTERS) REGULATIONS 2024.

This new law states that users must be 16 years or older and obey a speed limit of 20km/h in order to legally operate an electric scooter. As for electric bikes, bikes with a motor not exceeding 250 watts of power and 25km/h are treated as normal bicycles. Anything with more power and speed is considered an e moped which is required to be registered and taxed. 

This new regulation has caused some pressure for the consumers, our company  and environment alike. According to research conducted by Allison Sylte from the Colorado State University, PEV’s are the most environmentally friendly mode of transport. E bikes & E scooters only omit 8 grams of carbon oxide per mile as opposed to other modes of transport thought to be as eco-friendly, I.e. a bus omits 88 grams of carbon oxide per mile, train- 88 grams of carbon oxide per mile, normal bicycle- 33 grams of Co2 per mile (human is breathing in oxygen and omitting carbon dioxide) (Sylte, 2024).

This new law is causing pressure for our company because it is now deterring people from purchasing PEVs in fear of being stopped, arrested and charged by police. Most people use PEV’s to commute to work (Nogueira, 2024). The main motivations for electric scooter use is significant reduced travel time, money savings and fun. With the new law, it may not be worth purchasing an electric bike due to the restraint on speed. A 20km/h limit on electric scooters is very limiting, leading to slow speeds, may result in a longer travel time causing consumers to opt for alternative less environmental friendly modes of transport i.e. public transport . 

From what I have seen, most consumers prefer electric scooters that drive to speeds of up to 50km/h, as it gets them to their destination quickly and efficiently.

This causes a salient pressure on my company and the wider industry. Whilst, our purchasing team at ICS is trying our best to import and stock e scooters that are compliant with regulations, we are also trying to import e scooters that have a market demand and will sell. The compliant electric scooters have a lower demand than faster ones- which are unsurprisingly in very high demand. This law has affected Inner City Scooters and other retailers in the same industry. 

As these laws are still fresh, its difficult to predict the future of electric scooters industry in Ireland. In 2021, France adopted a similar law. According to this report published in November 2022, France’s e scooter market continues to explode, with a 42% increase in sales between 2020 and 2021 (Razemon, 2022). From my personal experience as an e scooter company director, when the laws were first introduced there was a drop in sales. As time as passed, the level of sales has slowly resumed back to its normal level. 

 

3.How is the business leading or lagging in regards to sustainable development? 
Inner City Scooters is doing its best when it comes to sustainable development. However, in certain areas we are leading and falling behind as I will mention below:

Areas of sustainability lag:

Waste and lifecycle Management
The average e scooter/ e bike lifespan of approximately 4 years. Depending on the PEV owned by the consumer, the vehicle may not be suitable for continued use due to being beyond economical repair. This mostly applies to scooters that cost under €600 to replace. If an e scooter/ e bike battery becomes weak, it could cost up to 50% of the cost of the PEV to replace due to the time length and cost of shipping materials for a lithium-ion battery (Levy, 2023). This leaves us with abandoned e scooters and bikes as older models may need to be replaced instead of being repaired. These old and abandoned PEVS usually pile up and get scrapped. We have a guy who collects scrap scooters and further breaks them down to bare metals to be properly scrapped and eventually recycled. This process is costly and unsustainable as e bike/scooters frames (especially cheap ones) are composed of mixed metals such as cast iron, steel and/or aluminium, which is usually difficult and costly to separate at the recycling stage. Inner City Scooters is failing to address this lag due to a lack of knowledge on how to disperse metals. This is an industry lag, from my point of view, the best way to avoid this lag is to avoid cutting costs during the manufacturing stage and to build PEV frames with one solid metal so that they can be easily recycled and reused when they reach their lifespan in the future. 

 

Areas of leading sustainability


Increased marketing of electric bikes
Due to regulations being unfavourable towards e scooter users, we have adopted a new approach towards sales. We have eased on pushing the sale of e scooters, and instead promoted the use of electric bikes as an alternative method of transport. This push on electric bikes ensures that all age ranges (including under 16’s) are able to legally access an eco-friendly, sustainable and efficient mode of transport. Within the industry, proper advice and in depth knowledge of these new regulations are rare, so as a company we practice due care and diligence and take on the responsibility of advising consumers in the best steps to take in order to ensure their transport is undisrupted.

 

Battery recycling
At Inner City Scooters, we are Irelands leading company when it comes to recycling and refurbishing used batteries. Currently, we have a battery specialist from Ukraine named Vlad. Vlad is a fully qualified electrical engineer with a master’s degree in this field (a speciality that is heavy lacked in this industry. Many “professionals” in this field are self-thought engineers due to the lack of expert knowledge in this industry.).


Vlad’s job is to test reuseable cells from used batteries and build safe to use batteries from beyond economical repair damaged, old and unused batteries. The recycling of unused batteries ensures valuable resources such as capital i.e. cost of shipping from battery suppliers, the mining of lithium, cobalt and other valuable materials required for the manufacturing of batteries are not wasted. The recycling of batteries defeats a major environmental challenge. This ensures batteries are recycled properly to prevent environmental contamination and resource waste.

 

Parts refurbishment & recycling:
In January 2022, I enrolled my staff in to a class taught by an electric motor expert named Magy. He educated my staff on how to replace cables and hall sensors in damaged motors. This time staking practice ensures motors are repairable with light, easy to manufacture parts rather than been thrown away and replaced with brand new complete motors. This practice protects the environment by minimising waste and reduces costs for the consumer and company alike. Costs are minimised as we don’t have to import new motors from China. This highly effective and innovative technique of recycling motors is uncommon within the PEV industry due to a lack of expert knowledge, thus allowing us to gain a competitive edge for repairs against competitors in the areas of pricing and sustainability.

 

Recycling of BER PEVs:
E scooters and e bikes which have been deemed as damaged beyond economic repair (BER) i.e. crashed scooters, are recycled here at Inner City Scooters. This practice ensures that wastage is kept to a minimum level, which means that only parts that are unfit for future use are scrapped/thrown away. Parts such as controllers, batteries, data cables, displays and LED lights are kept and resold/reused as spare parts.


Wastage of PEV parts have become the norm in the micromobility industry as most companies don’t possess an in-depth understanding of the use of each part i.e. voltage converters, front forks etc. Since we are the leading the industry with PEV repairs, we have an in depth understand of how these vehicles work and how most electrical parts are very similar regardless of the manufacturer, unlike many other companies such as Lifty scooters and Loco scooters (also based in Dublin). Hence the reason why these parts usually get disposed of. However, at Inner City Scooters we have professional and experienced staff that are able to recognise and recyclable parts that are still in functioning order so that they can be reused for future repairs. 

 

4.Using the sustainability development goals select at least two SDG’s that are being used industry wide and apply them to the chosen business. (your selection must include one environmental and one social SDG).

SDG 11- Sustainable Cities and Communities 
The micromobility industry can play a significant role in achieving sustainable cities and communities:

Reduced Congestion
Electric scooters are a convenient and efficient mode of transport and are a fast alternative for driving or taking public transport especially in Cities. Traffic congestion is a serious issue in Dublin. New data from location technology company TomTom suggests that Dublin is the second slowest City in the world (O'Cearbhaill, 2024). The use of PEVs will reduce traffic congestion, lessening carbon footprint and improving quality of air.

In order for PEVs to work well in Dublin, there would need to be improvements in the infrastructure. Currently, in Dublin City we have bike lanes. However, in most areas just outside the city centre we don’t have bike lanes. Investment in the infrastructure is required in order to ensure safety for riders and pedestrians. Dedicated scooter lanes and docking stations for parking, supports efficient and safe use of scooters. Renewable energies could potentially be used for docking stations. These areas need to be covered in order for e scooters to be fully integrated as a sustainable mode of transport. 

 

SDG 8- Decent Work and Economic Growth
The micromobility industry promotes economic growth. It gives everyone the opportunity to own a mode of transportation. Personally, that’s what I love most about electric scooters. There’s a strong element of social inclusion as It allows people who can’t drive due to age, medical reasons to own a vehicle. As PEVs are an affordable, low cost mode of transport, people with less money can afford to own one. PEV’s are an accessible mode of transport which can provide access to job opportunities for those with limited transport options. 

Within the industry, there is plenty of opportunities for jobs. In China, this industry provides manufacturing jobs, sales jobs and jobs within the export market. Here in Ireland, this industry provides jobs for those involved in the sale and maintenance of PEVs. Jobs such as customer service, Mechanics and battery technicians are available and there is a high demand for this labour. 

As well as providing jobs within the industry, PEVs provide an accessible and sustainable mode of transport for those who would usually have issues commuting to work. Inner City Scooters offer the cycle to work scheme which means employers can purchase PEVs for their staff in order to facilitate them getting to work. This initiative is backed by the government.

 

SDG 13- Climate action
Electric bikes and scooters play a significant role in advancing SDG 13.
 

Reducing emissions
PEVs produce zero direct emissions. The average cost of charging an electric scooter with a 7.5 ah battery from dead to full is 10 cent (Magliocco, 2023). With a full charge on a 7.5ah one can expect to cover a distance of 30kms. These statistics tells us PEVs are highly efficient consuming less energy per km as opposed to gasoline powered vehicles i.e. cars/motorcycles.

Ethical issues to be considered
While these batteries are brilliant for reducing carbon footprint, their production does raise huge ethical concerns. The process involved in their production is unfair as hundreds of thousands of people are exploited for our gains . 

An important component of lithium ion batteries is Cobalt. According to a report by the World bank as of 2021 between 70-80% of the world’s cobalt is mined from the Democratic Republic Of Congo (World Bank, 2021). Ironically, these batteries save our environment, however, in DRC the mining industry has ruined the land by cutting down millions of trees, negatively impacting the quality of air around mines. Cobalt is toxic to touch and breathe causing negative health outcomes (Venkat, 2024).


An artisanal miner holds a cobalt stone at the Shabara artisanal mine in the DRC.

Some 20,000 people work at Shabara artisanal mine in the DRC, in shifts of 5,000 at a time. The DRC produced approximately 74% of the world's cobalt in 2021. Junior Kannah/AFP via Getty Images

Hundreds of thousands and men, women and children are enslaved in Congo, forced to work in dangerous conditions for very little pay. These ethical issues are far too serious to ignore as many lives are lost and families are displaced . Around 28 companies have adopted remediation efforts to combat labour exploitation. However, the cobalt mining industry is still unregulated on a larger scale. Although majority of DRC’s GDP and employment is being generated through the mining industry, there needs to be responsible mining practices put in place to ensure health and safety of workers. 

 

5.Explore ways in which green washing may have occurred within the larger industry.
Greenwashing is when companies mislead consumers about environmental benefits of a product when in reality they engage in activities that cause harm to the environment (Motors, 2024). Greenwashing can lose trust of customers. A solid example of this is when Volkswagen installed a defeat device in their cars that disguised the actual carbon dioxide emissions levels. This cheating of emission tests was uncovered in 2015 which resulted in 8.5 million cars being recalled (Hotten, 2015).  


Environmental impact of production
Within the micromobility industry, greenwashing does occur. Companies which manufacture and sell PEVs claim their product omits zero emissions, which is theoretically correct, however this only applies in the use phase. In reality there are negative environmental impacts during the production of lithium ion batteries. If we take into account all the energy used to extract raw materials and transform them into the final product, the carbon footprint is drastically higher than expected. The production of lithium ion batteries is responsible for roughly 50% of an e scooters carbon footprint (Foley, 2023).

 

Misleading Recycling claims:
According to research, scientists assumed scooters had a lifespan of about 1 year. This short period of use decreases the eco friendliness of e scooters (Fournier, 2020). Some manufacturers allege high recycling rates for lithium ion batteries. However in reality, most batteries are not recycled due to technical and economic challenges. Recycling batteries can be labour intensive and tedious as each individual battery cell needs to be recharged to a certain level. Once charged, they need to be tested. This test involves discharging the battery and monitoring the discharge rate. For most companies, it makes economic sense to just purchase a new battery and dump the old one. Even the process of recycling batteries can be environmentally harmful unless renewable energy is being used to charge battery cells. Ultimately, in order to decrease the environmental impact of batteries, it is important that from scratch e scooters are built to last with quality materials and workmanship in order to prevent wastage and lower carbon emissions. 

The average consumers reactions to greenwashing in the micromobility industry typically reflect scepticism towards the market. Albeit sceptic, consumers usually still purchase PEVs as the use of electric scooters are generally perceived environmentally friendly. Unfortunately most of the electronics we use in our daily lives contain lithium ion batteries i.e. mobile phones, laptops. From an ethical perspective, it is not harmful for the local environment as we don’t produce these goods here in Ireland. Most battery operated goods are produced in China. However, for the rest of the world, i.e. Democratic Republic of Congo, there is negative social and environmental impacts which are usually swept under the carpet. In my opinion, it is greenwashing to ignore wider supply chain issues and only promote the impact of the use of PEVS. In an idealistic world, companies should inform the general public of the full environmental impact of owning an electric scooter. This disclosure will bring full awareness to consumers so that they can make an educated choice as to whether or not they should own a PEV. Presenting lithium ion powered e PEVs as the best eco-friendly mode of transport as a simple dichotomy can obscure the complexities and trade-offs involved. Painting a picture of eco friendliness without showing the full picture is considered deceptive marketing. The only way for the industry to move to a more transparent form that would satisfy partners is to actually make changes which I will discuss in the next section.

 

6.Explore the changes that are required for the business and industry at large to become more sustainable.

In order to make Inner City Scooters and the broader industry more sustainable, here are the key changes required:

Sustainable raw materials to be sourced:
Companies involved in the mining process of cobalt should implement ethical mining practices. This includes ensuring safe labour conditions, eradicating child labour and mininising environmental damage. If mining practices in DRC can’t be improved, then materials should be sourced from more responsible regions.

Manufacturers are now starting to produce e scooter frames with low-carbon intensity materials such as aluminium produced with renewable energy. This change further decreases emissions omitted in its production.

This extra care in sourcing ethical and environmentally friendly materials may drive the price of raw materials up, which has the potential to increase the average cost of PEVs. A price increase with no actual change in the performance of the product may be a drawback for the industry as it may deter consumers from purchasing an e scooter due to the increased price. However, it is for the best as we can’t ignore the lithium ion supply chain issues as highlighted above.

End of life management:
Manufacturers should take responsibility for the entire lifecycle of their products. This should involve partnering with retailers and introducing take back schemes, where consumers can return old scooters in exchange for some credit towards a new one. These type of schemes ensure that PEVs are brought to the right place with the correct expertise to responsibly recycle and dispose these products ensuring minimal waste rather than turning mother nature into a landfill.

 Government intervention:
In my opinion, governments should enforce stricter environmental regulations on battery production and waste management. Financial penalties and public shaming for companies that engage in unethical practices such as child labour and unsafe work conditions will diminish their reputation and act as a deterrent. 

Improve e scooter/ e bike lifespan
The short lifespan of PEVs is a primary source of emissions omitted by these products. In order for the industry to become more sustainable, manufacturers need to improve the durability of e scooters by using stronger materials and designing scooters in a way that they won’t break easily. This evolution is similar to cars. Initially when cars were first developed they were unreliable but they improved over the years. The e scooter/ e bike industry is still in its early days. Much like cars, as time goes on, they will improve in design and eventually reach a point where they last long. I have been in this industry for 4 years and I can confirm this is the case. Initially when scooters first came out they used to always break. As time has went on, their weak points have been corrected and consumers are getting more years out of them. This benefits my organisation Inner City Scooters, as it means we are dealing with less complaints of broken products and the industry is receiving positive feedback.

Implement sustainable charging practices
The energy production for charging e scooters and e bikes also contribute to their carbon footprint. The carbon footprint can be significantly reduced by using a renewable energy source such as air or solar powered electricity. Unlike fossil fuel- based electricity, renewable energy generates little to no emissions during energy production. This change would practically make the use of PEVs close to carbon neutral. This improvement would benefit the environment and the customer (free transport).



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