Auckland City Council revoked Beam’s operating licence on 27 August and ordered its 1400 e-scooters to be switched off by midnight after an investigation found the company had “systematically exceeded the permitted number of devices by almost 40%” in the central business district and surrounding suburbs.

Three days later, Wellington City Council suspended Beam’s licence on similar allegations.

Earlier, a whistleblower sent documents, including conversations from one of Beam’s Slack channels, to local governments in Auckland, Brisbane, Canberra, Townsville and Wellington, alleging that the scooter-sharing company had exceeded its quota by hundreds of dollars in each city.

Beam founder Alan Jiang said in a statement to the newspaper that he was open to reaching a “commercial agreement” but denied any wrongdoing. Heraldadding that additional scooters have appeared on the streets to compensate for those that are broken or missing.

The whistleblower claimed that Beam deliberately hid the extra scooters – known as “ghosts” – from the Ride Report monitoring software that all councils use to keep track of rides. It also claimed that Beam defrauded councils of “millions” because revenue from the ghost scooters was not shared with councils (the deals varied, but some involved a 1-3% revenue share; Wellington charged a flat rate of 11c per ride).

The council is currently considering tenders for the next two-year e-scooter licensing period, which begins on 4 November.

Competing are Lime (of which Uber is a major investor), local competitor Flamingo, Alibaba-backed Chinese giant HelloRide, Singapore-owned Neon and Singapore-owned Ario.

This Herald understands HelloRide, which is working with Queenstown developer and tourism operator Min Yang on its Auckland bid, will send one of its global guns to talks with councils next week.

Beam would not comment on whether his bid is still active. However, the fact that the council has forwarded his contact to the police suggests that there is limited chance of success if he sticks with his bid.

What is Beam?

Beam was founded in Singapore in 2018 by Alan Jiang and Deb Gangopadhyay, both of whom were later appointed to the company’s consumer technology division. Forbes Asia’s 30 Under 30 List.

The company currently offers e-scooters and e-bikes in 60 locations across the Asia Pacific region, including 36 cities in Australia and New Zealand (prior to the five cancellations and suspensions detailed above).

In a statement released on April 30 of this year, the privately held company said, “Beam reported a 36 percent increase in gross revenue from 2022, reaching a record $53 million in 2023.”

In the second half of 2023, “Beam achieved a significant milestone by achieving adjusted EBITDA profitability, indicating that the company is positioned to translate its impressive growth into a sustainable business model.”

Before the fraud allegations emerged, the company said it was “on track to achieve double-digit profitability in full-year 2024.”

Chris Keall is a member of the Auckland based group Herald business team. He joined Herald in 2018, is a technology editor and senior business writer.