Revolution, evolution, fad, or just a little extra variety?

The first ever Micromobility Conference was held in California last month. This article looks at what micromobility is, how it is disrupting the travel sector, why it is happening now, and whether it will ever become an alternative to the car.

Say, what?

Defining micromobility is not easy, but it tends to involve light vehicles (sub 500kg) that are predominantly electrically powered. Some commentators widen the definition to include non-motorised vehicles such as bicycles and kick-scooters or restrict it to lighter vehicles.

Ride sharing is also an important element of the service model. The most prominent example to hit New Zealand’s streets in recent months is the Lime e-scooter. Other international examples include hover-shoes, electric unicycles and electric skateboards. Pithy epithets such as Skip, Scoot, Spin, Bird, and Grin seem to be de rigueur for the start-ups blazing trails into this space.

Why now?

The micromobility ”movement”, as proponents like to call it, has been enabled by developments in electric motorisation (particularly miniaturisation) alongside smartphones and their GPS tracking capabilities. Push factors relating to urbanisation, congestion on our city roads, and concerns about the effect of our travel choices on greenhouse gas emissions have also played their part. And you certainly get a sense of mission, and even idealism, from some of these companies. Bird is a dockless e-scooter-share company founded in September 2017 and based in California. Front and centre on their website, their mission is to “make cities more liveable by reducing car usage, traffic, and carbon emissions”. Their products may be small, but their vision clearly isn’t.

A license to print money?

The business case is to provide a cheaper, cleaner substitute for short car journeys. And on the face of it, it seems to be working. Bird is now in more than 100 cities worldwide and has reported more than 10 million rides to date. Lime, a competitor, is in more than 130 cities and boasts more than 26 million rides on its e-scooters and bikes. The companies also point to local job creation. Lime employs local ”operations specialists” and independently contracted ”juicers” paid to charge the devices. People can sign up to be a juicer in a similar way to being an Uber driver. Lime gives them eight chargers to begin with. They collect the e-scooters in their own vehicles, charge them overnight and redistribute them in the morning. Payment is based on each e-scooter charged and varies depending on the charge level of the e-scooter and the difficulty of retrieving it.

But firms such as Bird and Lime, who offer a ride share service, must maintain a sizable fleet, and the hardware itself is not cheap to buy. The e-scooters frequently break or get vandalised, and the task for finding, charging, and redistributing the e-scooters is unavoidably labour-intensive. Early indications are that demand for rides is seasonal: winter can put a dent in ridership numbers. And the unanswered question that weighs on most investors’ minds is: will the novelty wear off?

Controversy

In cities like Los Angeles, San Francisco, and Washington where e-scooters have arrived en masse, residents have been dismayed to find thousands of e-scooters dropped onto their streets seemingly overnight. In a strategy of asking for forgiveness rather than permission, the companies responsible often ignore all the usual avenues of getting city approval to set up shop. And since riders can leave their ride wherever they want when they have finished using it, there have been scenes of e-scooters strewn across the footpath, on wheelchair ramps, and in doorways. Officials in cities like San Francisco and Santa Monica, California, have been sending cease-and-desist notices and have even filed charges against the e-scooter companies.

New Zealand adoption

In October 2018, Lime e-scooters arrived in Auckland and Christchurch – the first in the Southern Hemisphere. Two months later they were introduced in Wellington’s Hutt Valley. In February 2019, Wellington City Council announced they would be trialling e-scooters in the city. The distinctive black and yellow Onzo dockless bikes have also been a familiar sight across Wellington since they arrived in October last year.

These firms seem to be targeting those “first and last mile” trips. “You have people driving their car to get to the bus and parking at the park-and-ride or people hopping in an Uber to go a distance that is just a little too far to walk,” says Lime’s Wellington Region Operations Manager, Sam Seiniger.

Using the e-scooters is simple enough. You download a smartphone app which guides you to an e-scooter location, where you scan a QR code on the e-scooter to unlock it and pay for the ride. The Onzo bikes use a very similar system.

A substitute for the car?

The Lime e-scooters cost $1 to hire and 30 cents per minute of use (equivalent to $5.50 per 15 minutes). In comparison, Onzo bikes cost 25 cents per 15 minutes of usage. Let’s say in that time you were able to travel 3kms. An Uber trip of a similar distance would cost you $7-$10 and, in Wellington, a bus trip $2-$3.

So, the dollars and cents stack up for Onzo bikes which cost notably less than e-scooters and can arguably be used for longer journeys. But e-scooter rides are only a little cheaper than an Uber ride.

A key difference between a Lime e-scooter and an Uber is that Uber comes to you – wherever you are (mostly). There is scope for zipping around a city centre on an e-scooter where plenty are to be found. In this respect they are as much a substitute for walking or public transport as they are for cars and taxis. But will I be able to find an e-scooter in the ‘burbs that will get me to the train station in the morning?

I would also argue that anyone inclined to hire an e-scooter on a regular basis might be tempted to buy a conventional kick-scooter of their own, with the added benefit of burning some calories. These frequent users might also consider buying an e-scooter, although at well over $1,000, the cost is much higher. The bottom line is that the proposition of ride-sharing an e-scooter is very different to sharing a car because the costs of purchasing the two are very different.

Reading some of the features written by hands-on journalists recounting their e-scooter experience, the fun factor is undeniable. But if recreation is a significant driver of the worldwide growth we have seen so far, it is unlikely to be sustainable. On the other hand, if these micromobility companies were able to capture even a small fraction of the car travel market, the returns are potentially lucrative.

According to the 2018 New Zealand Household Travel Survey, New Zealanders travelled 3.1bn kms in cars last year (as either drivers or passengers). Let’s say that micromobility captures 0.1% of those journeys – that’s 3.1m kms. Assuming it costs $5.50 to ride 3kms on a Lime e-scooter, that amounts to $5.8m a year. We can’t come to any judgement about profitability without any knowledge of operating costs, but we are clearly not talking peanuts, even in a small market such as New Zealand.

It takes a brave person (or a futurist) to predict the outcome of market disruption in its early days. Aside from the public’s appetite for adoption, much will depend on how city authorities respond with rules to govern the services. Considerations include establishing where e-scooters are legal to ride, fleet restrictions, fees, parking, and speed requirements.

The early predictions of micromobility’s global domination will probably prove to be vastly overblown. Micromobility is not the next Google because, unlike the titular search engine, e-scooters and their cousins are limited in their application. But nor do I think this is a fad that will quickly dissipate. Micromobility will, in time, take its place amongst the many and varied transport options available to 21st century urbanites.

 

 

 

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