Singapore-headquartered Beam Mobility is being investigated by local authorities in Australia and New Zealand for manipulating monitoring software to run more e-scooters and bikes than permitted on the streets, according to a report by the Weekend Australian.
Beam, which is backed by Affirma Capital, Peak XV Partners, ICT Capital and Hana Financial Group, among others, is being scrutinised by at least five local governments in Brisbane, Auckland and Canberra, the report said.
To operate legally in a city, e-scooter companies must pay registration fees for each vehicle or a percentage of the fare collected from riders. The Weekend Australian report alleged that Beam intentionally exceeded the scooter cap by up to 30% in certain areas, potentially costing the government thousands of dollars per day in lost revenue.
An anonymous whistleblower leaked emails and Slack conversations to the publication, revealing messages between Beam Mobility’s founders discussing a scheme known internally as the ‘Running Hot Project.’ This scheme allegedly involved sending fake, real-time data to a third-party monitoring app, Ride Report, that tracks the number of vehicles and trips.
Beam Mobility’s chief executive Alan Jiang, an ex-Uber executive, told the Weekend Australian that the company had chosen to mark some vehicles as “unknown” or “inactive” in the Ride Report app to account for those rendered unusable due to theft, misplacement or other reasons. The strategy, he said, allowed the firm to deploy additional scooters to ensure “an adequate number of usable vehicles were available to the public within the limits agreed upon with the city councils.”
He admitted that this approach had led to instances where the company exceeded the allocated vehicle limits and said Beam was willing to negotiate commercial settlements with the impacted city councils.
“We emphatically reject any suggestion that this was a ‘scheme’ to deprive councils of revenue,” he said in a statement published by the Weekend Australian.
The company will overhaul its processes to prevent such instances, conduct an internal review, appoint an independent auditor and deliver a preliminary report by the end of next month, the statement added.
“This kind of deception is a terrible breach of trust and ethics and is totally reprehensible; it does not in any way reflect how the wider industry operates,” said a spokesperson for Singapore-based Neuron Mobility, which competes with Beam.
Founded in 2018, Beam operates in more than 60 cities globally and has a significant presence in Australia and New Zealand. In April, the company claimed that it posted a 36% year-on-year increase in gross revenue to $53 million in 2023. Beam also said it is “on track for a full-year double-digit adjusted EBITDA margin in FY 2024.”
According to DealStreetAsia – DATA VANTAGE, the company’s top shareholders include Affirma Capital, Peak XV Partners, and Hana Ventures. It is valued at over $300 million.
Top shareholders of Beam Mobility
In the recent years, several portfolio companies of Peak XV, have faced allegations of fraud or misconduct.
