In 2018, a number of US cities were dealing with a new scourge: electric scooters and boosted bicycles strewn on sidewalks and roadways, inhibiting the flow of traffic. These vehicles were often parts of new companies that offered users the ability to rent a means of transport for short stints. Competition heated up so dramatically that year that some started calling them the “scooter wars.”
These companies had sprung up to help people move within cities. Public transportation can’t keep up with the growing number of people living in cities; these companies want to help people get to and from the nearest public transport option, to solve the so-called “last mile problem” with as few carbon emissions as possible. Electric-powered scooters, mopeds, and bicycles, the thought goes, could help people more easily navigate cities in a sustainable way (though some have questioned just how green these operations really are). Companies began offering fleets of these vehicles, which users could book via an app; they’d spend just a few dollars per trip, making the cost comparable to public transport.
Today, it’s a lot less common to see a scooter discarded on a sidewalk (this is likely due to a mix of regulations keeping the vehicles off sidewalks, and rider education on where to park the vehicles when they’re not being used). The scooter wars, however, are far from over. As serious money has flowed into the space, competition has heated up; though more affordable shared transportation can be found in more cities worldwide, it’s not clear if these companies have permanently changed the way people move through cities. By April 2021, total US ridership has surpassed pre-pandemic numbers.
Here are a few trends in the landscape today, how the field might change in the future, and how the field could improve.
How we got here
Micromobility apps (particularly bike sharing) first became big in China, long a nation of cyclists, in the early 2000s. Tech giants such as Didi Chuxing, Alibaba, and Tencent launched their own bike sharing apps or bought smaller companies. But the apps peaked in 2018; though 77 bikeshare companies operated in the country that year, littering the streets of major cities with unused bicycles as they jockeyed for market share, many were edged out over the ensuing years. Even those backed by tech giants Alibaba and Tencent shut down in 2020.
But the idea started to catch on in other countries in Europe and eventually North America, expanding from bikeshares into electric scooters, boosted bikes, and mopeds. Despite early challenges with permitting, user safety, logistics, and vehicle quality, by early 2020, these companies had largely overcome them and created a playbook for how to get established in a given city.
Then, of course, covid-19 disrupted everything. People weren’t going anywhere, not even to work, which meant ridership dropped precipitously—in April 2020, the amount people were spending on scooter shares dropped by 100% compared to the year prior according to a New York Times analysis. Some feared the companies wouldn’t survive. Some did not.
But most did; after the initial wave of stay at home orders, ridership increased as people sought ways to travel beyond their neighborhoods while maintaining social distance. Some companies, such as Bird and Lime, have seen 2021 revenue and ridership numbers rise above 2019 levels.
So how are companies staying afloat? At the moment there are two major tactics: Consolidation and scaling. Many businesses are doing both.
Consolidation. Transport companies with deep pockets have spent the past few years buying each other up. That includes micromobility companies—Bird took over Scoot in 2019 and Circ in 2020, Superpedestrian bought Zagster in 2020, Tier bought Nextbike in November 2021. But it also includes transport companies such as Lyft and even Ford branching into the micromobility space by purchasing Citibike and Spin respectively.
This, in many ways, is not a surprise. “Micro-mobility companies won’t survive as standalone services. Ride-hailing companies will start to eat them up. And given the massive existing customer bases ride-hailing companies have, they’ll be able to adapt and scale these options quickly,” marketer Stephen Lambe wrote for VentureBeat in 2018.
Scaling. Offering transport in just a handful of cities, especially those where potential riders have lots of micromobility options, isn’t going to cut it for most companies. That’s why many are expanding at a rapid pace, branching out into new urban centers in new countries.
“This has become a game of slim margins and scaling up…And it’s far better to have fewer operators with greater density,” Fredrik Hjelm, CEO of Stockhold-based Voi Scooters, told Reuters.
“Global expansion is a natural next step for micromobility sharing platforms as they look to scale and capture market share,” analyst Jason Eliasen wrote on Medium. “Entry into new geographies will require high up-front costs and risk as the firms navigate local nuances, ensure regulatory compliance, develop an infrastructure presence and compete against incumbent providers.”
Where we go from here
It’s safe to say that micromobility companies have achieved what they set out to do—they’ve changed the world. Micromobility is now an established way that people move around, changing the landscape of some cities where they’ve become mainstays.
But they’re not done yet. There is room for companies to expand to new markets, with new technologies,
As the industry continues to shift, it will encounter more challenges and opportunities for growth.
More global. Much of micromobility’s growth has been focused on cities in North America, Europe, and Asia—cities that already had functional infrastructure to move people. Very few companies are operating in Africa and Latin America, where cities more often lack infrastructure such as bike lanes.
More tech. A growing number of companies are testing out sophisticated technology to help them better manage their fleets. Computer vision on vehicles, for example, would help them function better and ensure rider safety. Expanding into software could also help keep the companies afloat if other factors inhibit profitability.
More safety. This will continue to be an issue, though companies and cities are finding new ways to confront it. Some are creating more in-app features to ensure rider safety; after several riders died on Revel’s mopeds, the company was suspended in its native New York City until it introduced new safety features such as helmet checks and a safety training.
More private ownership. Micromobility companies have always faced the challenge of teaching riders to use their vehicles. Once they’ve done that, though, some riders have begun to enjoy them so much that they buy their own, undercutting the rideshare companies’ bottom line.
Profitability. Permits, charging stations, vandalized or broken vehicles, vans to move vehicles around—running a micromobility rideshare company is not cheap. Companies have slowly raised prices even as they expand within cities and into new ones, but even that might not be enough. Some have launched subscription models to improve customer loyalty. This will be a renewed focus for the companies that have weathered the pandemic and are going public.