Segway Aims To Keep Rolling After San Francisco Se [Archive]

Casey

12-05-2002, 11:52 AM

quote:Segway Aims To Keep Rolling After San Francisco Setback

BY BRIAN DEAGON

INVESTOR'S BUSINESS DAILY

The two-wheeled tech-powered electric scooter known as the Segway Human Transporter hit its first speed bump last week when city supervisors in San Francisco voted to ban it from sidewalks.

If Mayor Willie Brown does not veto the bill, which the Board of Supervisors passed 8-2, San Francisco would be the first city to prohibit on sidewalks what is arguably the most-watched invention in a long time. Brown has three weeks before he must decide.

The device's inventor, Dean Kamen, has expressed hope it will "change the world for the better" by replacing cars in crowded inner cities, thus cutting pollution and congestion. It runs on batteries that recharge overnight, and can move at a top speed of about 12 mph.

California is one of 32 states that have passed legislation allowing the Segway on sidewalks. About half of those state bills, including the one signed by California Gov. Gray Davis this year, let local municipalities impose their own restrictions.

If other cities follow San Francisco, it would be a big setback for Segway LLC. The Manchester, N.H., company has the facilities to produce tens of thousands of Segways a year.

"We are at a very interesting point in our company's history," said Segway President George Muller. "We've done the testing, creating demand and interest and awareness. Now we have a chance to begin distribution in the consumer market."

The U.S. rollout will be followed in Europe and Asia.

"We're just at the beginning of wide-scale usage," he said.

The U.S. Postal Service, the National Park Service and several airports and police departments have all tested the Segway. It's also been tested at many large companies, including General Electric Co. (GE), Boeing Co. (BA), Ford Motor Co. (F) and General Motors Corp. (GM)

For now, San Francisco has set up a roadblock.

"No other big city has taken this kind of action," said Matt Dailida, Segway's director of state regulatory affairs. "We think San Francisco is premature with this action. It would be better public policy to base this decision on facts and hard data, which they do not have."

When the product was unveiled a year ago, the biggest unknown was how it would be classified and regulated by local and state governments. The Segway is designed to accommodate the average adult body and balances like a human does. It can go almost anywhere a human can walk. Therefore, the manufacturer reasons, Segway belongs on the sidewalk, not on streets.

The only Segway accident that's been revealed was when a postal carrier took a spill as he was moving from concrete to gravel during a test in Florida.

Elderly Opposition

Critics say using the Segway in a factory, warehouse, or in other wide-open spaces is not the same as riding it on a crowded sidewalk. Forces that lined up to oppose the Segway in San Francisco included groups for the elderly and for the blind. Those groups also said it's a threat to pedestrians with baby strollers.

"Pedestrian groups have taken notice and are now starting to get mobilized," said Randall Henry, a consultant to the California Senate Transportation Committee.

"We still don't know how many of these will be on sidewalks," he said. "It could end up being more of a novel conveyance for the affluent. But if it caught on, it could result in problems on busy urban sidewalks."

The Segway is only now becoming available to the public. In late November, Amazon.com Inc. began taking orders for them. The devices, which cost $4,950, are available for delivery in March.

"The initial response from early adopters is very strong," said Muller. "We've had thousands of inquiries from consumers asking when it would be available."

Muller won't say how many orders the company has received or how many Segways have been built. The largest known user is the Postal Service. It bought 40 industrial versions, which are larger, sturdier, faster than the pedestrian version, and cost about twice as much.

The Postal Service has held six tests with mail carriers. It conducted tests in balmy Florida, in the snows of New Hampshire, in the heat of Arizona and on busy streets in New York and San Francisco. The testing phase is over for now, said Mark Saunders, a Postal Service spokesman.

"We will analyze the results and determine if more testing needs to be done," said Saunders. He declined to discuss results of testing done so far.

The Postal Service is a potentially huge customer for Segway. It has 13,000 walking routes and 90,000 park-and-walk routes across the U.S. Mail carriers typically lug a 40-pound bag on walking routes. The Segway can carry up to 125 pounds of mail, stuffed into three satchels mounted on the sides and front.

Several police departments have tested the Segway. The city of Atlanta conducted a 60-day trial with six Segways. Segway officials say tens of thousands of hours have been logged by people in various city environments without a single injury.

Laws Pending

In addition to the 32 states that have OK'd its use, another six have legislation pending and two states - Colorado and Mississippi - have no statewide ban on sidewalk use by motorized vehicles.

In state government parlance, the Segway is classified as an "electric personal assistive mobility device." It's defined as a "self-balancing, nontandem, two-wheeled device that can turn in place and designed to transport only one person" at limited speed. Getting approval to ride the Segway on sidewalks is the second major element of the company's strategy.

The first step, says Muller, was to establish relationships with corporate and enterprise accounts, and uniformed pedestrians.

"Our purpose was to enter a community in a responsible way rather than have rapid and broad distribution of our product," he said. "We also wanted to see how people would use Segway, and how they learned to ride it."

Test results among business owners sounds promising.

This past year, GE Plastics, in a press release issued by Segway, said it completed a round of feasibility testing and purchased 10 units for more tests. GE Plastics said initial results showed "potential double-digit productivity gains," but did not specify how. At GE Plastics, maintenance technicians, environmental testers and security personnel were among those who used the devices.

And GTI Spindle Technology Inc., a machine tool maker, announced a 12% productivity savings from its initial evaluation in a Caterpillar Inc. (CAT) plant. The Segway helped maintenance workers cut an hour's time from inspection work, the company said.

Also, a unit of Energy East Corp. (EAS) plans to test the Segway with its utility meter readers. "We have seen reports of productivity gains of 12% to 20%," said Muller. "The range of activity includes moving a security force around parking lots and interiors, moving maintenance people, increasing the area they can cover and saving time."

Many of the early trials have resulted in the permanent adoption of Segway in these environments, says Muller, though he declines to name them. "A lot of customers have asked us not to disclose this information for competitive reasons."

The company is financed largely with venture capital. The two largest partners, with investments of more than $76 million as of a year ago, are Kleiner Perkins Caufield & Beyers and Credit Suisse First Boston.

Another major investor is inventor Kamen, who is best known for designing a wheelchair able to climb stairs. The Segway is a spinoff from that design, and uses elements of computer power, software and gyroscopes to attain its unique mobility.