Historically, the expansion of humanity’s horizons has often been paid for by the public. As Neil deGrass Tyson often points out, governments have frequently bankrolled endeavors whose costs were very high and whose risks were unknown such as such as long sea voyages or space exploration. These ventures mapped out the risks, learned by trial and error, innovated, and subsequently paved the way for commercial ventures.
In a curious turn of events VCs and entrepreneurs took on the risk themselves, pushing the boundaries of electric micromobility with the force of hundreds of millions of dollars.
Unfortunately, these past few weeks have not been kind to the prospects of a healthy future for dockless micromobility with providers bleeding cash and/or nearing the end of their runways.
Scooter/bike sharing companies are all struggling due to a lack of healthy unit economics (each scooter/bike, or unit, not making enough money from rides to justify production, replacement, and maintenance costs).
Some of the reasons for this lack of profit provide obvious lessons, which many in the industry have been warning about for months now:
- Invest in solid hardware that doesn’t need to be constantly replaced
- Better winter preparation/hardware
- Don’t give millions of discounted or free rides
- Refrain from aggressive expansion in an attempt to “capture” market share in a business with no real moat
But besides these obvious lessons, the 2018 micromobility boon provided cities a giant government sized experiment, worth hundreds of millions of dollars, and many, many valuable lessons. And while these private companies may not (yet) have unlocked a lucrative business model, they have unearthed the most valuable lesson of all: the formula for to unlocking incredible latent demand for micromobility mobility, a way to get people out of their cars, and the way forward to creating vibrant bike/walk/transit cities.
Here we explore the lessons cities should take from dockless bike/scooter sharing and some suggestions about how they should capitalize on this enormous free lunch going forward:
THERE IS LATENT DEMAND FOR BIKES/SCOOTERS
“People will never get out of their cars.”
For decades, urbanists have suffered from this unfortunate trope. And for the most part people have assumed this assertion to be an inevitable fact of urban life, even as some cities had successfully started luring people out of their cars. Those success stories were simply dismissed with yet another lazy trope: “Yes, but it could never be done here. It would be unrealistic.”
People blindly also accepted the unspoken assumption that the personal automobile was the pinnacle of urban transportation due to its comforts and theoretical speed and happily ignored the severe negative consequences and even inconveniences of cars such as the stress and time-suck of traffic, the high cost, the pollution, the danger, the loneliness, the hassles of parking, etc, etc.
However, an almost miraculous thing happened in 2018.
In just a few short months, dockless bikes and scooters revealed an enormous latent demand for car alternatives. Worldwide, millions of new two wheeled rides were offered by micromobility providers.
While it’s still unclear if dockless bikes/scooters are sustainable businesses, user adoption of micromobility has been off the charts, forever quashing any doubts about whether people will get out of their cars.
MIMIC THE UX OF A CAR AND THEY WILL RIDE
Bike-shares have been around for years with varying degrees of success. And bikes and been around for more than a century. Neither have come close to matching the incredible adoption of dockless electric micromobility.
Ironically enough, the keys to revving up all the latent demand we have seen seems to be matching the user experience of the bike/scooter to that of the automobile:
Step 1: Eliminate pickup/parking frictions
Traditional bike sharing has always been weighed down by the dock.
Using a bike required having a bike share station near the beginning and the end of your journey (or owning one and dealing with trying to find safe and convenient parking and dealing with storage, maintenance, and theft).
In the case of docked bike sharing, the user experience is much more akin to that of a subway, with only limited number of stations, yet without the perks of weather protection, reading a book, taking a nap, or getting work done.
Now compare that to the relative ease of using a car.
Decades of building our cities around the car (with parking requirements) has resulted in ensuring car parking virtually everywhere in the city. Other than a few exceptions, the user experience of a car begins and ends a stone’s throw from the start and end of any trip, with no thought or advanced planning required on a user’s part as to where to store the vehicle. This is because every house, every street, every business has car parking. In fact, those rare moments where we do have trouble finding parking or when parking is expensive, we fume! Why? Because we expect free or near-free car parking everywhere in our cities.
Pairing bikes/scooters with the smartphone, GPS, and self-locking mechanisms, private scooter/bike sharing companies were able to do away with the dock, freeing micromobility, and creating an easy and convenience user experience much more akin the car: pickup anywhere, ride anywhere, park anywhere.
Step 2: Eliminating panting and sweat
The most underrated benefit of cars is the powered wheel: step on the gas and get where you need to go without effort, without sweat, without worrying about hills.
Recent cost reductions and advances in battery and motor technologies have literally empowered two wheeled featherweights, endowing them with the same throttle as much more expensive, heavy, dangerous, and polluting four wheeled vehicles.
In other words, electric power has turned the often labor intensive scooter or bicycle almost into a car.
Dirt Cheap, Lightning Fast Deployment
Traditionally, to create an effective bike sharing program, a city has to achieve dock-saturation. Quite a number of bike stations need to be installed in a geographically small area to pass the tipping point of mass adoption (and even this is sometimes not enough). This process takes months or even years with bike share coordinators working hard to acquire (sometimes begs for) the required bits of real estate.
Hence, the rollout of traditional bike sharing programs is slow and expensive without any guarantee of eventual success.
The huge advantage of dockless micromobility how they are able to be deployed literally overnight: unencumbered by docks, hundreds of units can be dropped in an urban area, instantly creating a bike sharing in that community or region.
Sure, such swift deployment caused problems.
Yet the speed, efficiency, and affordability that dockless deployment enables is night and day compared to traditional docked bike sharing schemes.
For any micromobility sharing efforts going forward, the benefits of dockless deployment is the absolutely clear winner for launching successful bike/scooter sharing programs.
Overnight Deployment Leads To Fast Adoption Tipping Points
The overnight deployment of dockless scooter/bikes has yet another advantage.
While reaching a tipping point of bike adoption has historically required years of creating an effective bike sharing network or even decades of building great bike infrastructure, dockless scooter/bike sharing has been effectively a quantum leap for adoption.
The simultaneous appearance of hundred of scooters/bikes creates instant access to all parts of a community, completely removing the dock anxiety new riders feel of not knowing if there is a dock in the direction they are headed.
Immediate mass availability also creates instant buzz and awareness and eliminates the traditional (slow) adoption curve where early adopters must first try something, tell their friends about it, until (hopefully) a critical mass is achieved.
In turn, fast adoption creates social acceptance of a technology that might have otherwise been labeled as a “dorky” early adopter gizmo, which would have prevented electric scooters and bikes from ever achieving critical mass.
Overnight scooter/bike deployment also has an enormous safety benefit. The immediate influx creates instant awareness of this new mode of mobility for drivers, making them much more cautious and making streets safe for everyone. By contrast, it traditional takes years or decades to sufficiently train a driving population to the presence of non-automobile wheels on the road.
FLEXIBLE FLEET MANAGEMENT
Traditional bike sharing networks are not cheap to maintain. Bikes require constant maintenance. They require daily rebalancing, requires large vans or trucks, which in turn cost money to acquire and maintain.
By adding gig economics to fulltime fleet employees, bike/scooter sharing firms have been able to reduce the costs of their fleet management.
“Chargers” or “juicers” have found creative ways of rounding up scooters on their spare time, charging them, and rebalancing them, reducing the need for large vans and full-time employees.
THE BICYCLE ISN’T THE ONLY GAME IN TOWN
Traditional bike sharing networks are just that, bike sharing networks. Yet the scooter has shown to be an extremely popular form factor.
The speculations about why scooters took off in the States are many: nostalgia for/familiarity with Razor scooters, easier first-time user experience, no pedaling required, dresses/dress pants ok, smaller sidewalk footprint, etc.
Whatever the reason(s) for scooters’ newfound popularity, we learned that while the bicycle has been with us for over 100 years, that there is lots of room for form factor experimentation.
What other form factors might prove popular?
With the initial exuberance for scooter/bike funding may have passed, the appetite for hardware experimentation might be diminished in the private sector due to financial belt tightening.
So cities could take on the mantle of continued experimentation, which could yield even for extraordinary results! Moving past the 1st/last mile, the younger demographic, and the good weather use cases, cities could vastly expand micromobility sharing to winter months with protected recumbents, for errands like grocery shopping with cargo bikes, for working professionals and older demographics with full sized scooters, and so on!
MICROMOBILITY INFRASTRUCTURE BUZZ AND INNOVATION
The 2018 craze also left us with interesting infrastructure ideas and innovations.
The need for protected bike lanes
As dockless scooters/bikes proved that they were in fact replacing car trips, it became abundantly clear that cities must start rethinking street design.
While urbanists have been deriding the car for decades, city officials and road “engineers” have always had plausible deniability, clinging to their car-only street design, thanks to the above trope of “people will never give up their cars.”
Those leaders brave enough to actually take away car lanes for bike, bus, or pedestrian use were too often met with fast fury from drivers.
But now public officials have much more ammunition. First, no longer will the bike lanes they fight for seem empty thanks to the mass adoption of dockless sharing. Second, as much as drivers hate lane removals, it’s clear pedestrians hate encroachment on their turf by scooters. So now, instead of only having a small minority of ardent bike riders as supporters, politicians have a large new (and angry) constituency primed to support bike lanes if they are presented as scooter sidewalk reduction measures.
Have we mentioned dockless is amazing? Oh right, we did.
But dockless does have a big downside: scooter scatter.
While this problem is often overblown, there is an easy solution: Bird box.
No not the Netflix movie.
Bird boxes are simple areas on sidewalks or preferably on streets (replacing a car parking spot) painted to indicating scooter/bike parking areas.
Other than their incredible low cost, another benefit of these painted parking spots is that cities have the flexibility of actually seeing demand for scooter/bike parking and then painting these boxes as needed. This flips the script on docks, were cities do a lot of research and guesswork beforehand to figure out where these large, expensive stations would be most needed.
Bring back the dock! Well, after mass dockless adoption.
Once dockless micromobility is well established in a community, it might then be beneficial to bring back the dock. New docks, like those from SwiftMile, not only provide tidy parking for micromobility, but also charging.
Using these docks can be optional, so users could still have the amazing pickup & drop-off anywhere UX of a car most of the time. But at the end of the day, users can also be incentivized (perhaps with a free ride or even a bit of ride credit) to drop off their scooter at a specific dock.
Such incentives would have the dual benefit of rebalancing and charging a fleet without a dedicated person coming and physically picking them up, dramatically reducing operating costs.
2018 also brought a lot of reflection and brainstorming, with interesting ideas surfacing. Cities could learn from such ideas to create even better sharing services:
- Scooters with bigger wheels for safety and comfort
- Bring your own battery as another solution to help reduce fleet operating costs
- App integration with public transportation and unified payment for seamless switching from one to the other, for large nail in the coffin for the 1st/last mile problem as well as for car-ditching
A FREE LUNCH CITIES SHOULD CAPITALIZE ON
In the end, whether or not private micromobiliy companies survive cities should take advantage of this (expensive and nutritious) free lunch by paying attention to the lessons learned and carrying the micromobility torch if private companies are unable to sustain themselves.
No, scooter/bike sharing rollouts weren’t always smooth.
But hey, on the whole they worked surprisingly well with enormous adoption and decreased automobile use, all paid for by the private sector!
So how can cities take advantage of this mega-experiment that was done at near-zero cost to taxpayers?
Currently, many cities actually charge scooter companies per unit fees. If these companies don’t figure out their unit economics soon and get close to bankruptcy (as many have), cities should flip the script.
Just as we have subsidized solar panel adoption and electric car purchases, we should do the same with electric micromobility, but with even greater gusto since the return on investment of electric micromobility is orders of magnitude greater than of electric cars.
Public/Private Model: Micromobility As Public Transportation
Just as governments pay for ventures in uncharted waters, they also take up the mantle in areas without no good business models such as in transportation creating roads, running bus services, creating rail infrastructure. Where government see opportunities for public good and a strong economy, they step in and take the lead.
Another way to flip the script on the current practice of levying fees on scooter companies would be to treat micromobility as critical public transportation.
Instead of requiring fees, cities could create public/private partnerships with scooter companies, exactly like many public transit systems, and pay companies for operating this service. One payment metric could be payment per every car taken off the road.
Never Waste Free (And Expensive) Lunch!
In short, we should never let a super expensive experiment go to waste. Instead, we should enjoy its fruits!
This should particularly be true for cities which don’t have the enormous budgets of nation states, who are looking to lead the way on climate change, and solving traffic, pollution, public transit adoption, and a myriad of other issues.
Even if the private scooter/bike sharing companies don’t make it, cities should enthusiastically learn from their incredible successes, double down on micromobility as critical transportation cornerstones, and/or incorporate these lessons to their existing bike-share networks.