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Austin-based Unicorn Rides scooter company goes bankrupt

The company sold 350 scooters at $655 each. Now every customer is left without a scooter – and without a refund.

AUSTIN, Texas — An Austin startup is living up to its name: The scooters purchased through the electric scooter company Unicorn Rides don't exist.

Unicorn Rides was a little different than the average scooter company. Instead of renting just any scooter off the street, the idea behind the company was to give customers their own personal scooter to ride.

Founder Nick Evans said they came up with the idea in March and made a website and sold pre-sales in June. But by last Friday, they had to notify all of their customers that they would not be getting the scooters they pre-ordered – and they wouldn't get their money back either.

"We thought, 'Maybe we should sell scooters to people,'" Evans said. "We really thought it was amazing that something so simple like an electric scooter and the real utility it provides people for commuting." 

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Turns out, creating scooters isn't that simple. Evans is also the co-founder of Tile, an electronic location device that Unicorn Rides was planning to use on its scooters. 

"It has just become one compounding thing after another that made it a huge challenge," Evans said.

A portion of the email sent to customers stated, " A large portion of the revenue went toward paying for Facebook ads to bring traffic to the site. A portion also went to our manufacturer in the form of a down payment to build the scooters, but unfortunately, that down payment cannot be redeemed for a portion of the scooters that we were planning to order. Unfortunately, the cost of the ads were just too expensive to build a sustainable business."

Evans said they sold about 350 scooters at $699 each. Some customers received codes for discounts on their purchases.  

Shelly Johnson in Ohio said she did not receive the discount but she bought two scooters in September, one for her and one for her spouse. She said she didn't know it was a pre-order until after she bought it. 

"We quickly found out it was a pre-order after we found out it would be a month," Johnson said. "Well, I contacted them, it was delayed two different times. In November, at that time, they gave us the date of Dec. 15." 

Johnson said that date was an empty promise. She spent $160 out of pocket and used the loan company offered on the site for the other $1,238.

"They really pushed the financing. It said, 'If you can't afford our scooter, you can do financing,'" Johnson said.

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Evans said they were trying to sell the company's assets to give refunds to customers. 

"But someone has to buy it, someone has to be a buyer," Evans said.

Evans said their new job is to find a way to get the customers their money back.

"I feel pretty bad, but we are trying to somehow turn this around into a positive for everyone who ordered," Evans said. " I know this sounds unrealistic, but we are trying." 

Johnson said she is trying to work with the loan company to get the loan off of her history. 

WATCH: Austin's Parks Department wants City to relax rules for scooters on trails

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