Micromobility is an attractive concept and the businesses have been growing at an incredible rate. Its unceasing growth worldwide can be associated with its two unique features: attractive to users and easy to scale up. Firstly, micromobility services are usually deployed in urban environments where the users are already relatively used to shared mobility services such as ride-hailing. Besides, micromobility not only serves the mobility demand for its users but also frees them from the stress of traffic at a much lower cost of ownership.
When it comes to economics, micromobility services are easier to scale up compared to car-based mobility services, thanks to the lower-cost assets. With a considerably shorter payback time, it is largely favoured by the industry. According to McKinsey’s estimation, an e-scooter is profitable after four months in operation with on average 5 rides per day.
The theoretical market share for micromobility encompasses all passenger trips below 8 km. Yet in reality, micromobility is anticipated to cover only 8 – 15 per cent of the theoretical market due to other factors in play. According to McKinsey’s model, the market for micromobility in China, Europe and the U.S. would make up a quarter of their total forecasted global shared autonomous-driving market by 2030, valued at $300 billion to $500 billion. However, to reach this far, preemptive support from cities is important for the micromobility operators. For example, cities can help in creating intermodal hubs for a smoother interchange between transport modes. Proactive solutions to prevent randomly abandoned e-scooters and hasty scooter drivers on the roads are crucial for the mobility service to stay attractive.
Micromobility has the potential to disrupt the industry, and most cities’ acceptance currently gives it a ticket to play. To move forward, the micromobility actors need to actively find their positions in the cities and reshape the mobility landscape of urban environments.
The revenue-and-expense estimates in McKinsey’s report are eye-catching and give a clue of how the e-scooter business works in reality. Yet, I would guess the calculation is based on quite an extensive fleet. A four-month payback time is not long if we put aside the fact that common life expectancy reported by Bird and Lime is only two months. This makes it even more important for the service providers to secure their assets so they can survive twice as long as they currently do in order to be able to start making money, and not ending up in the river or get stolen. Even though micromobility has the potential to disruptively change the way we see transportation in cities around the world, the prediction is quite valiant given the uncertainty of the industry. What I have been anticipating are solutions from the operators to better control their free-floating vehicles.
Written by Anne Faxér, RISE Viktoria.
1. 2019-01-29. Micromobility’s 15,000-mile checkup