How E-Scooters Boost Restaurant Spending

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E-scooters continue to grow in popularity as a cost-effective, fun, speedy, and relatively eco-friendly alternative to other modes of transportation. The versatility and freedom that e-scooter riders enjoy could potentially benefit businesses, and a new Journal of Marketing Research study investigates how these compact vehicles are affecting customer spending and restaurant habits. E-scooters redefine restaurant accessibility by providing a seamless way for customers to discover new culinary options across different neighborhoods.

This research reveals substantial evidence that e-scooters have a significant impact on restaurant expenditure, particularly for fast food restaurants and casual dining establishments. Using data covering 391 companies in 98 U.S. cities, the authors find that the introduction of e-scooters increases spending by approximately 5.2% for e-scooter users. This trend is especially noticeable in places where e-scooters are easily accessible, as they make it easier to make impulsive eating choices and promote exploring new restaurants without having to deal with traffic or parking issues. Interestingly, the influence of e-scooters skews toward larger companies with lower price points, suggesting that e-scooter riders favor quick and inexpensive meal alternatives.

Using data covering 391 companies in 98 U.S. cities, the authors find that the introduction of e-scooters increases spending by approximately 5.2% for e-scooter users. This trend is especially noticeable in places where e-scooters are easily accessible, as they make it easier to make impulsive eating choices and promote exploring new restaurants without having to deal with traffic or parking issues.

Looking ahead, the intersection of environmental awareness and technological advances may further strengthen the role of e-scooters in urban eating traditions. The authors predict that e-scooters will continue to have an impact on restaurant expenditure as long as communities adopt sustainable mobility. This evolving dynamic provides a window into a future in which micromobility promotes more accessible and linked eating options, in addition to sustainable urban development.

A Conversation with the Researchers

Given the implications of this topic for consumers, marketers, and policymakers, we sought further insights from the authors to fully grasp the impact of e-scooters on consumer preferences in the restaurant sector and their ripple effects on the local economy. These discussions shed light on the deeper socioeconomic narratives at work as well as the data-driven findings obtained from their study. The authors’ insights reveal how e-scooters act as catalysts for urban economic vitality and cultural vibrancy, transcending their role as a mere transportation solution.

Two major highlights after speaking with the authors:

  • Key research takeaway: E-scooters significantly increase restaurant spending, particularly in fast food and casual dining, underscoring the role of micromobility in shaping urban dining habits.
  • General tip for PhD students: Focus on asking the right research questions: impactful research often stems from relevance and practical implications, not just methodological perfection.

Q: “E-scooter entry facilitates the discovery of new restaurants and repeats business from already acquired customers.” Could you provide insights into how this discovery process occurs and its impact on customer behavior?

A: E-scooters allow people to cover greater distances than walking without the need for personal vehicles or reliance on public transport schedules. Customers can avoid the hassles of finding parking or getting stuck in traffic, allowing for more flexible dining out. Through increased mobility, customers are likely to venture into new neighborhoods or areas that they usually do not visit by foot or car, discovering new restaurants. Also, the convenience of e-scooters can encourage customers to dine out more often, including through repeat visits to their favorite spots.

Q: Can you discuss any unexpected findings or patterns that emerged during your analysis of the impact of e-scooters on restaurant spending among companies with different historical revenues?

A: Our study found that the introduction of e-scooter programs primarily drives sales lift for larger companies selling at lower price points. This observation can be somewhat unexpected, as one might expect smaller local businesses to benefit more from the increased local mobility that e-scooters provide. However, we found that the convenience and accessibility of e-scooters make them more conducive to facilitating quick visits to fast-food outlets and other lower-priced dining options that are often operated by larger companies.

Q: Looking ahead, do you believe that the impact of e-scooters on restaurant spending will remain consistent, or do you foresee changes based on evolving trends in consumer behavior or technology?

A: In the long run, increasing awareness of environmental issues could lead more consumers to choose eco-friendly transportation options, such as e-scooters. Indeed, some cities, such as Portland and Austin, have invested in e-scooter-friendly infrastructure, following their sustainability plans. In addition, advances in e-scooter technology, such as a longer battery life, better safety features, and more comfortable designs, could make e-scooters more attractive options for transportation, potentially increasing their impact on restaurant spending. While some e-scooter businesses have run into financial difficulties and some cities have imposed stricter regulations on e-scooter operations, we would expect consumer demand for micromobility to remain strong.

Q: Your conclusion states that “the introduction of e-scooters significantly increases restaurant spending.” How did the impact of e-scooter use vary among different types of cities and businesses? Were there any notable patterns in terms of city size, demographics, or business characteristics that influenced this impact?

A: The impact of e-scooter programs on restaurant spending was not uniform across all types of dining establishments. A larger positive effect was observed on spending at fast-food restaurants, such as McDonald’s, compared to a smaller effect on sit-down restaurants like Olive Garden. This pattern suggests that e-scooters are more frequently used for casual dining experiences than for more formal sit-down meals. We also found that the sales uplift effect is more pronounced for larger companies selling at lower price points. Considering city characteristics, our analysis indicated that cities with a medium-to-high proportion of young-to-middle-aged citizens and those with less pre-existing public transit infrastructure saw a larger effect from the launch of e-scooter programs. We also found that e-scooter introduction benefits cities in all climates.

Q: Regarding the comprehensive scope of your study, which encompasses 391 companies across 98 U.S. cities, could you shed light on the methodologies employed to guarantee the representativeness of your sample?

A: We used data from Bloomberg Second Measure, a consumer data analytics company that observes credit and debit transactions for more than four million individuals in the U.S. We empirically validate the representativeness of our panel data against population-level sales disclosures obtained through press releases and filings with the Securities and Exchange Commission (SEC). We showed a high correlation between these sales disclosures and the corresponding panel-level sales figures over several quarters across these companies (median = 99%), supporting the representativeness of the data. While we cannot guarantee that our sample is representative in terms of the behaviors we measure, representativeness analyses such as this are encouraging.

Q: How did you identify the need to study the effects of the largest and fastest-growing segment of dockless electric scooters (“e-scooters”) on the restaurant industry? What inspired you to start working on this interesting and impactful idea?

A: In 2019, when we began this research, the e-scooter industry was exponentially growing. There were a few surveys conducted by city governments and some anecdotal evidence from the e-scooter companies themselves, but a more rigorous, systematic understanding of how this new form of micromobility influences economic activity remained largely unexplored. We were motivated by a broader interest in understanding the economic externalities of micromobility solutions, including how they could influence consumer behavior, spending patterns, and, ultimately, local economies.

Q: Could you discuss the broader economic spillover effects of e-scooters on the local economy? Specifically, was there any evidence that the increase in restaurant spending affected other local spending or the overall economic activity in the cities studied?

A: Our study revealed that the introduction of e-scooter programs not only increased restaurant spending by approximately 5.2%, translating into an average spending uplift of about $179.10 per e-scooter allowed across the cities studied, but also indicated broader positive implications for local economies. For cities, the increase in restaurant spending from e-scooter users contributes to local economic growth and potentially increases the sales tax revenue. For businesses, especially those in the restaurant sector, e-scooters offer a new channel through which they can increase sales, attract new customers, and encourage repeat business. In a supplementary analysis, we also show that the increase in restaurant spending was not at the expense of other local businesses outside the restaurant category but rather complemented them or was part of a broader increase in local economic activity.

Read the Full Study for Complete Details

Read the full article:

Kyeongbin Kim and Daniel Minh McCarthy (2023), “Wheels to Meals: Measuring the Impact of Micromobility on Restaurant Demand,” Journal of Marketing Research, 61 (1), 128–42. doi:10.1177/00222437231179021

Go to the Journal of Marketing Research

Ishita Nagpal is a doctoral student in marketing, Georgia State University, USA.

Manaswini Acharya is a doctoral student in marketing, Texas Tech University, USA.