Micromobility startups have struggled with profitability issues, which were exacerbated by Covid-19. But these startups are seeing a post-pandemic rebound. We dive into what micromobility looks like around the world, leaders across the space, and obstacles that these transportation solutions are facing.
Most city dwellers have by now seen the explosion of shared bikes and scooters popping up around their city — and if not, they will soon enough.
As congestion in cities rises, existing transportation — from cars to buses to trains — can no longer keep up with the growing population. Americans lose an average of 99 hours a year due to traffic congestion, according to the 2019 INRIX National Traffic Scorecard, and in 2019, traffic cost Americans roughly $88B, or an average of almost $1,400 per driver.
With cities pressed to solve the transportation crisis amid rising concerns around gas-powered emissions, micromobility startups are emerging as a powerful alternative to the current public transit mix — especially as the Covid-19 crisis impacts the sector.
get the full report
Micromobility businesses — both direct-to-consumer companies and sharing platforms — have seen strong demand as a result of Covid-19, despite an initial slowdown at the onset of the pandemic.
There’s potential for micromobility startups to grow even further as more people look for environmentally friendly, single-rider, open-air transit alternatives. Bikes and scooters allow for potentially safer methods of transportation — outdoor transit, control over social distancing, and fewer points of shared contact — compared to public transportation. And they offer a more sustainable mode of transport compared to gas- and diesel-powered personal vehicles.
While there are challenges that come along with the growing micromobility trend, including lack of regulation, citywide bans, and theft, this phenomenon has the potential to massively disrupt the mobility industry globally.
In this analysis, we look at micromobility initiatives across the globe, as well as at the challenges faced in the adoption of these mobility solutions.
TABLE OF CONTENTS
- What is micromobility?
- Why the shift to micromobility?
- The impact of Covid-19
- D2C bikes and scooters
- Micromobility around the world
- North America
- South America
What is micromobility?
Micromobility refers to short-distance transport, usually less than 5 miles. Increasingly, it is shorthand for the growing crop of bike– and scooter-sharing companies that are poised to remake the urban landscape.
With urbanization on the rise, the majority of trips people take fall within the category of micromobility and thus are prime candidates for bike and scooter usage. In the US, roughly 60% of all trips are 5 miles or less.
And as consumers take advantage of this growing trend, the market opportunity continues to expand. In the US alone, the micromobility market is predicted to be worth between $200B-$300B by 2030, per McKinsey. Worldwide, investors have funneled $14B in equity funding to micromobility startups since 2017.
The number of vehicles available through bike-sharing programs is estimated to reach 36M by 2024, up from 23M in 2019, according to market research firm Berg Insight. The number of scooters in sharing services is estimated to grow from 774K to 4.6M in the same period.
Why the shift to micromobility?
Cities around the world are quickly growing in size and population.
In fact, projections show that by 2050, an additional 2.5B people will reside in urban areas globally. With most cities already dealing with dangerous levels of pollution and gridlocked streets, micromobility could solve a handful of problems.
Among many use cases, micromobility services increase access to public transportation, reduce the amount of cars on the road, lower our environmental footprint, and provide convenient methods of transportation for short trips — all while being cost-effective.
Electric scooters, for example, can be more efficient than other modes of transport. One kilowatt hour of energy can only get a gasoline-powered car to travel 0.8 miles, according to Wired. An electric vehicle can travel 4.1 miles under the same conditions. However, an electric scooter can travel 82.8 miles using the same amount of energy.
Source: Levi Tillemann and Lassor Feasley
For city dwellers, renting a bike or scooter is often much cheaper than owning a car or taking a taxi to a destination. Moreover, they take up less space.
Yet, there are still some challenges associated with bikes and scooters. From their design to regulation & infrastructure issues, micromobility solutions are not well suited to thrive in all regions. (We’ll dive more into this below.)
The impact of Covid-19: Micromobility adoption accelerates after an initial slowdown
The Covid-19 pandemic decimated demand for public or shared transport as businesses shuttered and people stayed home. This proved devastating for unprofitable companies, especially ones that were already hemorrhaging money.
As people remained reluctant to leave the house, spending on shared scooters and bikes plunged the most of all transportation methods, nosediving by nearly 100%, according to the New York Times. (Taxis and mass transit were down at similar levels.)
Amid the coronavirus-induced upheaval, Lime laid off 13% of its workforce, saw its valuation fall by 79%, and initially withdrew from virtually all of its foreign markets. Rival Bird laid off 30% of its staff. After acquiring Middle East-based micromobility startup Circ in January 2020, Bird shut down its entire operation in the region in June 2020.
However, over time, Covid-19 also drove increased demand for this mode of transport and brought new riders into the fold.
Given fewer contact points and the ease of social distancing, scooters and bikes may be seen as less risky than cars, buses, or subways. Amid public transportation shutdowns in the US, Lyft-operated Citi Bike and Lime both offered healthcare workers free rides amid the pandemic, positioning themselves as essential infrastructure.
The flexibility and relative simplicity of micromobility services also meant that this mode of transport bounced back more quickly than any other, according to an analysis from the North American Bikeshare and Scootershare Association. By the end of 2020, micromobility ridership levels had come within 20% of 2019’s levels.
And adoption will likely increase further as the effects of the pandemic subside.
Shawn Carolan, a partner at Menlo Ventures, says, “Pretty much all aspects of transportation will show recovery in 2021 with the population’s strong desire to get closer to normal, daily infections dropping, better mask compliance and increased vaccinations.”
According to a survey of 8 countries conducted by consulting firm Oliver Wyman, 44% of riders are willing to increase their use of micromobility options post-pandemic. A third of riders plan to use these options as much as before Covid-19, while only 22% would decrease their use.
In the long run, McKinsey predicts a 5-10% boost in the number of passenger-kilometers traveled using micromobility options by 2030.
The Covid-19 crisis also drove some companies to offload unprofitable units, and others to snap up startups at discounted prices, leading to more consolidation in the space. Uber’s investment in Lime in May 2020 brought with it a deal to transfer Uber’s micromobility startup Jump to Lime. Manufacturer Superpedestrian acquired Zagster, creating a fully integrated micromobility company, in June 2020.
The industry may see further consolidation as smaller players fold and as companies look to gain a competitive edge through building a bigger network. For instance, in January 2020, Bolt acquired assets from Gotcha, allowing it to move into 48 new markets in the US.
Micromobility providers are also solidifying key partnerships to stay afloat and reach more users. For instance, in January 2021, Lime partnered with Edenred Benefits, one of the largest benefits providers in the US. Over 10,000 employer users of Edenred’s commuter benefits can now subsidize scooter- and bike-riding trips for their 10M+ employees. The agreement helps Lime take advantage of whatever post-pandemic work landscape emerges — whether employees go back to offices, hop to remote work hubs, etc.
D2C bikes and scooters: An alternative ownership model
Many customers prefer owning electric bikes and scooters instead of using shared mobility programs. In Europe, for instance, direct-to-consumer (D2C) e-bike sales are set to reach 17M units sold annually by 2030, up from 3.7M in 2019. Electric bike sales in the US, meanwhile, grew 145% between 2019 and 2020, according to NPD Group.
Investors and startups have been quick to react to this demand. VanMoof, a Netherlands-based e-bike company, raised a $128M Series C in September 2021. Around 150,000 people use VanMoof bikes, which can cost up to $2.3K. But co-founder Taco Carlier has much more ambitious plans, as he hopes the latest funding round “will help us get 10 million people on our bikes in the next five years.”
New York-based Wing Bikes is another contender in the e-bike market. The US company offers cheaper e-bikes compared to VanMoof. In addition to D2C e-commerce sales, Wing runs a store in NYC for test rides.
Bird also launched an e-bike in August 2021. Called the “Bird Bike,” it costs $2.3K and will initially be available in the US. It’s designed in house but manufactured by an unidentified industry partner. Bird has also been selling scooters to customers since 2019. In 2020, the company launched the Bird Air, a foldable electric scooter at a cheaper price point, as it looked for ways to grow revenue and cut losses.
Veo is yet another scooter-sharing business that sells e-scooters directly to consumers. The company launched its personal-use Astro Go scooter in August 2020 in response to depressed demand for its shared options during Covid-19.
Take a look at more examples of D2C players in our bike and scooter tech market map.
North America: A shift to multimodal mobility
The US was the first country to see dockless electric kick scooters appearing on city streets.
In September 2017, Bird dispatched hundreds of its kick scooters onto the streets of Santa Monica, California. Recalling the early days of ride-hailing companies like Uber and Lyft, there was backlash from citizens and city officials alike.
Despite regulatory hiccups along the way, the dockless scooter craze witnessed aggressive growth in its early years. Several US-based scooter-sharing companies achieved unicorn status at lightning speeds as big investors poured millions of dollars into the space.
Shared bicycle programs have existed in many major cities across North America over the last decade, with the first large-scale system launched in May 2009 in Montreal, but remain less popular than e-scooters. About 70% of Americans living in major urban areas view e-scooters positively, according to a 2018 survey.
After emerging in late 2017, e-scooters quickly overtook shared bikes as the preferred method of micromobility transportation in the US, particularly displacing dockless bikes, which have since largely disappeared from cities. For example, Uber acquired Jump Bikes in 2018 but transferred it to Lime in May 2020 as part of a larger investment. Lime has since scrapped tens of thousands of Jump’s older bikes.
Major mobility startups have been redefining their offerings in 2020 and 2021. Bird, Lime, and others have adopted a multimodal approach to mobility, transitioning away from being scooter-only companies. They now offer scooters as well as e-bikes, mopeds, pedal-less e-bikes, and other options.
Covid-19, however, caused many of these companies’ valuations to fall back to earth. Those that survived the pandemic are doing what they can to achieve profitability and capture the market.
BIRD AND LIME: THE TOP SCOOTER UNICORNS
Despite being industry leaders, Bird and Lime initially struggled to stay afloat amid the pandemic, with both facing revenue crunches and mass layoffs. Both companies have managed to recover since.
California-based Bird was the first pure-play scooter-sharing startup to exist globally.
The company achieved unicorn status in less than 9 months after being founded in September 2017, making it the fastest company in the world at the time to reach a valuation of $1B. Just 4 months later, Bird doubled in valuation to $2B. Bird currently operates in over 300 cities throughout North America, Europe, and more — though the vast majority of these cities are within the US. It previously had scooters on the streets of the Middle East and Latin America, but had to pull back to cut costs.
To date, Bird has acquired 2 micromobility startups: Scoot, in June 2019, and Circ, in January 2020.
In March 2020, Bird eliminated 400+ employees as Covid-19 caused demand to plummet. Reports of workplace issues, derived from a culture that emphasized expansion at all costs, began to emerge as the pandemic placed additional pressure on the company. Employees brought up issues of poor leadership, hiring sprees followed by waves of layoffs, favoritism, and lack of diversity.
Nevertheless, in Q2’21, Bird reported $60M in revenue, a 477% year-over-year increase. Around the same time, it added a fleet of e-bikes to its app and enabled local shared operators to integrate with Bird. Bird has also announced its plans to go public via SPAC at a valuation of $2.3B, a dip from its pre-pandemic valuation of $2.9B.
Bird’s largest competitor is Lime.
Lime also quickly reached unicorn status and was valued at $2.4B — until Covid-19 hit. In May 2020, Uber offloaded its bike sharing business to Lime, which shaved nearly 80% off of Lime’s valuation — now at $510M — in the process. But the company recovered in the second half of 2020 after exiting markets where it wasn’t performing. Lime turned its first quarterly profit and reached 200M rides.
The company has also rolled out 100 electric mopeds in New York City. These vehicles are manufactured by the Chinese company NIU and they have up to 100 miles of range. Drivers will need to have a license and will also have to take a selfie while wearing a provided helmet. Lime has also introduced pedal-less e-bikes to its app as it evolves into a multimodal mobility platform.
In April 2021, New York City selected both Bird and Lime, alongside Veo, for its first pilot of a shared e-scooter program, allowing each of the 3 companies to deploy 1,000 scooters in the Bronx.
AMERICAN RIDE-HAILING COMPANIES BREAK INTO MICROMOBILITY
North America’s largest ride-hailing companies have recently jumped onto the micromobility bandwagon in an effort to incorporate all forms of transportation into their portfolio of services.
With the acquisition of bike-sharing company Motivate, Lyft became the largest bike-share service in North America at the end of 2018.
As a result, Lyft now owns a majority of the US’ most popular bike-share programs, including Citi Bike (New York), Ford GoBike (San Francisco), Divvy (Chicago), and Bluebikes (Boston). Lyft also launched fleets of its own electric scooters across American cities at the end of 2018, including in Denver, Austin, Atlanta, Los Angeles, and Nashville, though it’s stopped operations in some cities since.
Lyft also faced troubles amid the pandemic, laying off 17% of its workforce as of April 2020. However, in June 2021, the company launched an updated e-bike with the first vehicles delivered in San Francisco.
Ride-hailing giant Uber also has also been making moves in the micromobility space.
Uber purchased Jump Bikes in 2018, but transferred it to Lime in May 2020 as part of a funding round to the company. The transaction would also allow Uber to purchase Lime between 2022 and 2024 at a set price. This announcement came as Uber cut 14% of its workforce, with Covid-19 causing gross bookings to fall as much as 70%. But in August 2021, Uber reported that trips booked through Lime in H1’21 had surpassed 2020 full-year totals. The micromobility options are live in 100 major cities around the world.
Uber’s CEO has previously stated that he is bullish on personal individual electric vehicles such as e-scooters, hoping fewer people will own cars as time goes on. “During rush hour, it is very inefficient for a one-ton hulk of metal to take one person 10 blocks,” said Uber CEO Dara Khosrowshahi in an interview.
Europe: Investors direct attention to opportunity
Micromobility is not a new concept throughout Europe. In fact, European cities were some of the first to offer shared bicycles as a public service, in addition to already high ownership levels. In Denmark, for example, 90% of the population owns a bike, while just 56% own a car.
Amid the pandemic, European cities such as Barcelona, Berlin, and Rome have also closed off streets to cars for bikes, scooters, and pedestrians.
Across Europe broadly, the bicycle market was estimated at $16.4B in 2020, and is expected to grow at a CAGR of 3.7% through 2026. Europe’s car market, for comparison, is expected to grow annually by just 1.7% until 2024, according to the European Cyclists Federation.
The French city of La Rochelle launched a bike-sharing program back in 1974, which is still in use today. The Velib in Paris, replaced in 2018 by the Velib Metropole, is one of the biggest public bike-share programs outside of China. It has since become a model for a properly implemented bike-share system.
JCDecaux, the largest outdoor advertising company in the world, was the foundation of many self-service bike rental schemes that offer thousands of bicycles across many European cities today, including Paris, Brussels, Dublin, Luxembourg, Vienna, and Valencia.
SCOOTERS GAIN POPULARITY IN EUROPE
As European countries prepare to ban production of gasoline and diesel vehicles in the near future, a rise in the usage of electric vehicles seems inevitable. Already, around 12.6M cars in Europe are or will be affected by restrictions on fossil fuel cars, according to Berylls. Europe is also leading electric car adoption among regions, based on market share of new car sales.
In order to make cities more bike- and pedestrian-friendly, the UK has already committed £250M ($300M) as an emergency fund to construct new bike lanes and wider pavements, out of a £2B cycling and walking package. It is also trialing the use of rental e-scooters.
Scooter sharing began amassing popularity in Europe in late 2018, but companies lately have seen waves of consolidation.
In March 2018, Daimler and BMW merged their urban mobility companies into a single holding company. The company includes Hive, an electric kick scooter rental company that operates across Europe.
Source: Free Now
Other competitors include Ford-owned Spin, which began its expansion into Europe in June 2020, and Voi, which recently partnered with ride-hailing app Free Now, another subsidiary of the Daimler/BMW holding company, to expand its reach.
In addition, many US-based companies have flocked to the European market, including Lime and Bird.
So far, Lime has deployed its fleets across 20 countries in Europe, but had to temporarily suspend operations amid Covid-19.
Bird started its Europe launch in Paris in late 2018 and quickly became popular, with over 50,000 rides after only 2 months. In January 2020, Bird acquired German rival Circ. Its scooters can be found operating across Portugal, Belgium, the UK, France, Austria, Spain, and Switzerland, though these were also temporarily pulled due to the coronavirus crisis.
However, Bird was pushed out of Paris — one of the top cities in Europe for micromobility usage — after the city selected Lime, Tier, and Dott as its designated scooter companies in July 2020. Each of these companies will get the right to deploy 5,000 e-scooters during a two-year contract. Bird also lost tender processes in Lyon but won a tender in Marseille.
MONEY BEGINS TO POUR IN
In the past few years, investors have taken note of the opportunity e-scooters present in Europe, where cities have denser populations and far more bike lanes than most American cities. European-based companies have attracted funding in an effort to compete against the US-based companies swooping into the market.
Electric scooter company Voi Technology has raised more than $400M in its fundraising rounds to date since launching in 2018. The Sweden-based startup has secured investments from venture funds such as Balderton Capital, Vostok New Ventures, Project A, and Creandum. Most recently, Voi raised a $45M Series C extension at an $808M valuation in August 2021.
Voi offers its e-scooters in cities across Sweden, Denmark, Spain, Portugal, Finland, and France. In May 2020, Voi poached Bird UK’s chief to head its UK, Ireland, and Benelux operations. It also recently partnered with France-based ridesharing startup BlaBlaCar to offer BlaBla Ride scooters in France.
Berlin-based e-scooter startup Tier Mobility has raised more than $467M to date, including a $250M round in November 2020 with participation from SoftBank. The company says it is the first fully climate-neutral micromobility company. Tier launched in 5 new cities amid the pandemic. As of July 2021, the company operates in 77 cities across 13 countries.
Source: Tier Mobility
Venture capitalists seem confident in the potential of Europe’s micromobility markets, taking part in major funding deals in 2020 and 2021. Funding to Europe-based bike and scooter tech companies has grown steadily since 2017, counter to a general decline of funding to the space around the globe.
Reflecting on this trend, Voi CEO and founder Fredrik Hjelm has said,
“U.S. players raised a lot of capital back in 2017 and 2018 at the hype peak for the industry. All companies and founders were unproven in running this business back then. We now understand the business better and what’s important: collaborating with cities and winning contracts, operational efficiency and unit economics.”
get the full report
Asia: Bike-sharing sees early adoption
Asia has been a leading pioneer in the micromobility world, with China being the first country to implement a dockless bike-sharing platform in 2015.
With less regulatory red tape in place compared to Europe and North America, micromobility startups had the advantage of quick implementation across cities in Asia. This lack of regulation, however, also resulted in an oversaturated market, with millions of bicycles piling up in city streets.
Yet, in a continent fraught with dangerously high urban pollution levels and ultra-congested streets, it makes sense that cities like Beijing and Shanghai are leading the way to reduce automotive transportation and make the switch to emissions-free solutions.
By late 2017, shared bikes had become the third most popular mode of public transit in China. Other Asian countries, including Singapore, Taiwan, and South Korea, are also seeing success within the micromobility market.
CHINA PIONEERS BIKE-SHARING PLATFORMS
Docked bike-sharing municipal programs were launched in major Chinese cities as early as 2008, in an effort to alleviate mobility issues.
The first and most successful public program in China is Hangzhou Public Bicycle, launched by the Hangzhou Public Transport Corporation in May 2008. Numerous other cities within China, including Beijing, Shanghai, Wenzhou, Kunming, and Guangzhou, also set up public bike-sharing programs after the Hangzhou debut.
Several Chinese micromobility startups have already achieved unicorn status ($1B+ valuations), the first being Ofo, which was founded in 2014.
At its peak, the Beijing-based bike-sharing company managed to deploy more than 10M bikes worldwide across countries like the US, the UK, Singapore, Australia, France, and more.
But the massive startup struggled to stay afloat with high operational costs and fierce competition. In 2018, Ofo scaled back its international expansion plans and generated controversy when it was unable to refund nearly $170M in rider deposits. Now, the company has largely dropped off the grid, with few bikes in sight on China’s streets.
Ofo competitor Mobike, which was founded in early 2015, also saw growth at breakneck speeds when it first launched, expanding internationally to 19 countries worldwide.
Yet, like Ofo, Mobike was unprofitable. In April 2018, Mobike was sold to Chinese meal delivery company Meituan Dianping for $2.7B and rebranded to Meituan Bike. In order to cut costs, Meituan announced its retreat from most of its foreign markets. It also wrote down the brand value of the bike-sharing unit by $198M (1.4B yuan).
Another prominent bike-sharing platform is Hellobike, based in Shanghai.
Hellobike also achieved unicorn status with the help of top investors like Ant Group, a financial affiliate of Alibaba.
Launched in 2016, Hellobike found its start by targeting smaller cities, rather than major cities like Beijing and Shanghai that were already over-saturated.
The vast majority of Hellobike users reside in second- and third-tier cities. Hellobike operates in over 360 cities across China, with over 20M rides booked each day.
In 2017, it began shifting its focus to e-bikes, rather than regular bicycles, and set up charging kiosks across its operating areas. In 2019, Hellobike’s chief financial officer said that the company had captured 80% of the e-bike market in China.
Then, in April 2021, Hellobike announced its plans to go public in a US IPO. But the company soon scrapped these plans as the government in Beijing continued its crackdown on overseas listings of Chinese companies.
China’s largest ride-hailing service, Didi Chuxing, has also expanded into bike sharing, after acquiring bankrupt bike-sharing startup Bluegogo in 2018. In April 2020, the unit, which offers both e-bikes and traditional bicycles, raised $1B from SoftBank and Legend Capital. In June 2020, as China was recovering from Covid-19, Didi Bike announced that daily orders had hit 10M.
INDIA SEES SOME TRACTION
In India, a small group of startups are tackling the complex transportation market, with mopeds attracting particular attention. Poor road infrastructure coupled with congested streets make for difficult challenges, but startups like Bounce, Vogo, and Yulu are addressing them via their micromobility solutions.
Scooter-sharing startup Bounce says it operates more than 20,000 electric and gasoline dockless bikes and motor scooters in the country. In January 2020, it raised $105M in a follow-on Series D round at a $520M valuation. It acquired Ofo’s e-scooter unit in 2018, after the China-based company began to feel the cash crunch.
Vogo is another leading player in India’s micromobility space. Ride-hailing giant Ola backed the motor scooter rental startup in late 2018, infusing $100M to help the company expand its fleets. In February 2021, the company raised $11.5M in Series C funding and it expects to turn a profit by 2022. Vogo has also launched a new platform called VOGO Keep. Customers are allowed to rent e-scooters from 12 hours to 60 days. The initiative reflects the growing preference of users to avoid sharing vehicles with other people.
Another competitor is electric bike sharing platform Yulu, which has also found some notable backers. Yulu inked a partnership with Uber in 2019, allowing users to access its bikes through the Uber app. In November of that year, motorcycle manufacturer Bajaj Auto backed Yulu in its $8M Series A round and entered a strategic partnership with the startup to design and produce its e-scooters.
Yulu CEO Amit Gupta remains optimistic about the post-pandemic future, saying, “In the short period that we have resumed regular operations, our business has bounced back pretty fast and much ahead of our expectations. Single self-driven vehicles have been found to be one of the best ways to commute in the post-Covid world.” In August 2021, the company confirmed it’s considering raising a $40M round to expand the production and development of Yulu DEX, an electric scooter for gig workers that has an attached goods carrier.
SOUTHEAST ASIA GAINS SPEED
Last valued at nearly $40B as of April 2021, Grab expanded to offer shared bikes and e-scooters in 2018. The program was first known as GrabCycle and then was rebranded to GrabWheels as the company moved to focus on e-scooters over bicycles. However, the company is facing stricter regulation following the deaths of 2 e-scooter riders who collided with a car in Jakarta in November 2019. Challenges notwithstanding, the company is growing rapidly and plans to go public in a SPAC in late 2021.
Source: Nikkei Asian Review
Singapore-based startup Neuron Mobility launched in 2016 to offer dockless bicycles as well as docked e-scooters in Southeast Asia.
However, in 2019, Neuron halted its e-scooter service in its home market as well as Thailand, citing a strategic shift to Australia and New Zealand. Investors include 500 Startups, SeedPlus, and Ace Capital, among others. The company also serves several other markets, including Canada, the UK, and South Korea.
Another contender in the Southeast Asia e-scooter market is Singapore-based Beam. Certified climate-neutral, the company currently operates in Malaysia, as well as South Korea, Australia, New Zealand, and Taiwan. In June 2020, it raised a $26M Series A to expand within these markets.
As for foreign companies that have expanded to the Southeast Asian market, US-based Lime has been operating in Singapore since November 2018.
Despite recent regulatory obstacles, e-scooter operators in Southeast Asia remain optimistic about the growing market opportunity in the region. High population density coupled with strong economic and population growth are challenges that micromobility devices could potentially solve.
Scooters see rapid adoption in South America
Many of South America’s large metropolitan areas are frequently congested with traffic jams and do not have sufficient public transportation systems in place, particularly during peak rush hours. As a result, micromobility solutions like shared bicycle and e-scooter programs are an attractive solution for some cities.
While the micromobility trend hasn’t exploded in South America, the region is working on developing its micromobility presence, most notably in Sao Paulo, Brazil — one of South America’s largest cities.
TOP MICROMOBILITY STARTUPS JOIN FORCES IN BRAZIL
One of the micromobility startups within South America was Brazil-based Yellow, founded in 2017. The dockless bike and scooter sharing service raised one of the larger Series A financings in South American history, at $63M.
In 2019, Yellow merged with Grin — an e-scooter startup based in Mexico City and backed by Y Combinator — to form Grow Mobility. However, the company has struggled to find a sustainable business model, according to Reuters. In June 2020, Grow Mobility was acquired by investor Felipe Henriquez.
Brazil-based bike-sharing company Tembici is another player in the region. After taking a hit at the start of the pandemic, the company saw rides rebound in late 2020, and it introduced electric bikes around that time. It expects to hit 25M trips in 2021, up from 15M in 2020. Most recently, it raised an $80M Series C in September 2021, which will go toward expanding operations to other countries and bolstering its focus on delivery.
Other competitors operating in South America include Colombia-based Cosmic Go, which offers a mobility-as-a-service platform, and Madrid-based Movo, which has expanded internationally to several South American countries, setting up fleets of e-scooters within Colombia, Peru, and Chile.
MANY OF SOUTH AMERICA’S PUBLIC BIKE PROGRAMS ARE FREE
It is interesting to note that most public bike-sharing programs within South America are completely free to use, aside from Brazil’s public programs.
For example, Medellin, Colombia has had a public bike-sharing program since 2011 — the first to be created in South America. The EnCicla Bike Share System offers residents and tourists of Medellin access to more than 1,000 free bicycles.
Another Colombian city, Bogotá, is rapidly developing bike networks. The city’s mayor, Claudia López, plans to expand the existing 550-kilometer bike network by an additional 280 kilometers. And the city administration aims to eventually have 50% of all trips in Bogotá made on bikes, up from the current 7%.
Buenos Aires, Argentina has a public bike-sharing system known as EcoBici that has been expanding since 2010. EcoBici is completely free to all residents and tourists. The city is also constructing more bike lanes as it continues to roll out bikes and stations — once the expansion is complete, Buenos Aires will have 200 stations, 3,000 free bicycles, and 250 kilometers of bike lanes spanning the city.
San Lorenzo, Argentina also launched a free bike-sharing program in 2016, called Biciudad, in an effort to reduce the number of motor vehicles in the city.
Other free public bike systems within South America include BiciQuito in Quito, Ecuador and Movete in Montevideo, Uruguay.
This abundance of public programs could be a hindrance to micromobility startups’ profitability in South America, as the public may often choose the free alternative. Therefore, startups focusing on electric micromobility solutions like e-scooters could see more success within the region.
Micromobility yet to take off in Africa
With limited infrastructure in place to support bicycles and scooters, most of Africa’s cities have yet to see any kind of micromobility programs. But with the help of organizations like the UN pushing programs forward, the continent could eventually see some change.
Also, as cities across Africa continue to build up their infrastructure, bike- and scooter-sharing could become a more viable option for its citizens. So far, Morocco and Egypt are leading the way when it comes to micromobility programs.
THE UN GIVES A HELPING HAND
Marrakech, Morocco, was the first city in Africa to launch a citywide bike-sharing program in 2016. Medinabike is supported by the United Nations Industrial Development Organization (UNIDO), the Global Environment Facility (GEF), and is run by the Environment Ministry of the Kingdom of Morocco. Medinabike has 300+ bikes available for public use across Marrakech.
France-based bike company Smoove is the supplier behind the Medinabike program in Marrakech. The company has a 5-year contract in place with the city’s government. Smoove also won a bid to launch a fleet of shared bicycles in Lagos, Nigeria, in 2018. As of yet, however, it seems no progress has been made on this project, possibly due to poor road infrastructure within the city.
In the spring of 2018, the United Nations Environment Program partnered with Mobike to launch a bike-sharing scheme for the UN’s Nairobi, Kenya, compound. Employees and visitors may use these bicycles for free and they don’t require an app to be unlocked. This bike-sharing scheme was showcased during Africa Clean Mobility Week, in an effort to show how bike-sharing programs can be used across Africa as an environmentally friendly option for transportation.
Cairo, Egypt, launched a public bike share program in May 2018, called “Sekketak Khadra,” which roughly translates to “your road is green.” Cairo’s government partnered with the UN Human Settlements Program (UNHABITAT) to set up several hundred bikes across Egypt’s capital.
SOME AFRICA-based STARTUPS BEGIN TO EMERGE
Baddel was the first electric bike-sharing startup in North Africa, headquartered in Cairo, Egypt. The company has launched a fleet of 306 electric bikes and 37 stations in the resort town of El Gouna. Baddel plans to eventually launch more fleets of its e-bikes across North Africa.
In Nigeria, regulations have made it difficult for motorbike-hailing startups to flourish. Bike-hailing is similar to ride-hailing, where people can hitch rides on demand via apps — just on a bicycle or motorbike, instead of a car. ORide, Max.ng, and Gokada were emerging startups that offered motorbike-hailing services, but were forced to pivot when Lagos banned motorbike-hailing in February 2020.
Max.ng had previously raised $8M from Novastar Ventures and Yamaha, among others. Gokada, which laid off approximately 80% of its workforce after the ban, had previously raised $14M from investors including Adventure Capital, Rise Capital, and CRE Venture Capital. Unlike other bike-hailing companies like Max.ng and OPay, Gokada had only one market (Lagos) and offered only one service (motorbike-hailing).
In Rwanda, GURARIDE launched its micromobility program in September 2021. The company’s app allows riders to rent electric scooters, traditional bikes, and electric bikes installed in several docking stations in the capital city of Kigali. Rwanda has been heavily investing in its bike-lane network over the past few years. Ike Erhabor, GURARIDE president, says that the country is actively pursuing its green e-mobility vision and, in that regard, “we found Rwanda as the readiest country in Africa.”
Challenges to micromobility adoption
While the micromobility trend continues to grow worldwide, there are still a number of challenges hindering adoption, including limited infrastructure, lack of regulation, citywide bans, and theft.
If a city lacks the proper infrastructure, such as sufficient bike lanes, adoption of shared bicycles and scooters becomes difficult and even dangerous to the public. This is one reason micromobility has yet to take off in countries within Africa, as well as in India.
Many of Africa’s cities are simply not bike-friendly, lacking the proper bike-specific infrastructure for people to safely cycle. At present, riding bikes and scooters across African cities is often too dangerous.
In South Africa, for instance, cycling is either seen as an elitist sport for the wealthy or as a mode of transport reserved for the poor. As a result, most South Africans have very little interest in cycling around their cities. In Johannesburg, for example, cycling only accounts for a microscopic 0.2% of all trips taken within the city.
Source: The Guardian
Until countries can set up proper infrastructure, it is unlikely that the micromobility trend will spread across the continent the way it has in other parts of the world.
The same goes for India — the infrastructure is still largely unsuitable for individuals to safely operate bicycles and scooters on the roads. However, the government is currently working on initiatives to improve conditions for cyclists thanks to the Smart Cities Mission. (Read our explainer on smart cities for more.)
Though many micromobility companies raked in millions of dollars through investors, many struggle to achieve sustainable profitability.
Ofo is still buried under cash flow problems. Although its app has since pivoted to become an e-commerce platform, the company owes refunds to millions of users who placed deposits on rides.
Even pre-pandemic, Bird faced profitability troubles. In an effort to improve its profit margins, Bird has changed its pricing structure, even doubling its per-minute fee in some cities. Thanks to these efforts and rebounding consumer demand, the company reported a ride profit margin of 49% in Q2′21 but still suffered a net loss of $43.7M.
Some startups believe that a subscription-based business model might be a path to profitability, as subscriptions can be a more dependable recurring revenue stream at a potentially higher price point.
Revel, a dockless shared e-moped company, added an e-bike subscription for its pedal-assist bikes in February 2021. For now, the company is focusing primarily on New York City and has a waitlist for interested customers.
There are several other companies selling subscriptions, such as Buzzbike in London, Zygg in Toronto, and Dance in Berlin. Unagi, a manufacturer of electric scooters, is also expanding its e-scooter subscription services to several urban regions across the US. The service enables users to rent a scooter for $49/month. The company raised a $10.5M Series A round in March 2021 to expand the subscription offering.
As dockless bikes and scooters remain a relatively novel concept, most cities do not have proper regulations in place for how these programs are allowed to run, leaving governments scrambling to figure out how to deal with the sudden appearance of fleets of bikes and scooters around their cities.
With this massive influx of companies rushing to establish their own ride-share systems, various cities have begun discussing laws to regulate the establishment and usage of these bike and scooter systems.
However, while some cities are celebrating their successful launches, others are banning these companies from operating, citing a lack of safety.
The Chinese government has been creating new regulations to help control the emerging micromobility market, including punishing individuals that leave shared bikes outside of permitted areas or vandalize the bicycles.
Chinese cities have also been rapidly impounding bikes by the thousands. In Shanghai, the Municipal Transportation Bureau ordered bike-sharing companies to refrain from releasing any more bikes within the already oversaturated city in 2017.
With the speed and unpredictability of scooters zooming by on sidewalks or randomly placed in the streets, some European cities like Paris are banning them on sidewalks as cautionary steps to prevent scooter collisions with pedestrians. Barcelona has taken the extra step of banning the use of shared electronic scooters completely.
These laws may change as micromobility companies work with cities to better integrate their systems into city life. For instance, Dott, Lime, and Tier were selected in May 2021 to take part in e-scooter trials in London, which had previously banned shared programs altogether. Bird and Lime have also been lobbying for a change of laws enforced since 1835 that has prevented their growth in the UK.
North America has much stricter regulations in comparison to regions like Asia, which means micromobility startups cannot grow quite as rapidly as they did in China. For example, companies must obtain permits and go through legislative processes before they can roll out their bikes and scooters across most cities in the US.
If they don’t, they can face high fines and wind up banned from cities, like Bird and Lime were banned from San Francisco after they placed hundreds of scooters on streets without the city’s permission. Overall, however, the regulations can be beneficial to cities and startups alike, as they prevent companies from growing unsustainably fast.
Fierce competition between micromobility startups has led to the flood of millions of dockless bicycles across the streets of major cities like Beijing and Shanghai, which has resulted in many problems.
As bikes break, companies often don’t have the manpower in place to fix them in a timely manner, resulting in frustrated users having to test several bikes before finding one that works properly. Moreover, in China, as companies that expanded too quickly go out of business, their bicycle supplies wind up going to waste in massive bicycle “graveyards.”
Source: The Atlantic
The vandalism and theft of bikes and scooters has become a major barrier to many new micromobility companies. This may not be as damaging for larger companies (that can afford to redesign their hardware) as it is for smaller startups that could be driven out of business as a result.
For example, Gobee.bike, a Hong Kong-based dockless bike-share service, had to abandon its efforts in France completely in February 2018 as it saw thousands of its bikes damaged or stolen. For the same reason, it had already ceased services in Brussels earlier in the year.
Paris’ Velib bike-share program hit a similar wall early on. By 2009, 80% of its bikes had been reportedly stolen or damaged, with many ending up on black markets in Eastern Europe and North Africa.
Furthermore, Bird has at points been plagued by theft in Mexico and Chile — causing thousands of dollars of losses a day.
Micromobility companies therefore must deal with the expenses associated with replacing stolen hardware as well as hire enough employees to repair damaged ones. Both Bird and Lime have stated that their electric scooters tend to last one to two months before having to be replaced. A dataset released by Bird found that the average life span was just 28.8 days.
In an effort to increase the lifespan, Bird upgraded to a more durable “Bird Zero” model in 2018, featuring solid-core tires. These models now account for more than 75% of Bird’s fleet, according to its founder. In May 2021, the company launched its third-generation model, called Bird Three. This electric scooter has advanced safety features, such as an autonomous emergency braking system, to help protect against damage in accidents.
In general, micromobility companies are looking at new prototypes, tweaking shapes, sizes, and wheel arrangements for vehicles to serve different transportation needs and comfort levels. Seated scooters and hybrids of mopeds and e-bikes, which offer more stability and comfort for passengers, may gain more traction as people look for a more comfortable alternative compared to kick scooters. Ultimately, models that prove to be sustainable, more durable, and safer for riders will likely win out.
For cities with harsher climates, like those in northern Europe, adoption of shared bikes and scooters is not as viable. In the rain and snow, conditions become dangerous and accidents skyrocket. Plus, demand simply decreases when it is too cold to use unenclosed vehicles.
Many scooter-sharing companies are moving toward offering more durable fleets to make riding safer in inclement weather.
Shared scooter company Skip has even given away branded winter gloves and hats to its users in Washington, DC during the cold winter months.
But, ultimately, when weather conditions are too severe, shared scooter and bike companies might be forced to take their fleets off the streets and potentially lose precious profits.
While bike- and scooter-sharing schemes are growing rapidly, not everyone has equal access to this new mode of transport.
Data gathered during an e-scooter pilot evaluation in Chicago revealed that 65% of users were male, 79% were aged 25-44, and 72% were white. The majority earned over $75,000 in income. The French cities of Paris, Marseille, and Lyon reported similar trends: two-thirds of local users were men with above-average incomes.
These shortcomings may be caused by multiple factors. For one, e-scooters were initially burdened with the “tech bro” image that may have led to male user dominance. There are also the issues of scooter availability, smartphone requirements, and costs.
Lucy Mahoney, senior manager at the C40 Walking and Cycling (W&C) Network, says,
“Cities should only issue permits to e-scooter operators who aim to also serve outer-city areas that are poorly served by public transport as well as lower-income communities.”
Some companies are trying to tackle these issues. In the US, for instance, Bird Access and Lime Access programs offer lower fares to users reliant on government financial support.
Lime has introduced a feature that enables users to reserve a scooter for free. Also, users with low storage on their phones won’t have to download the entire app and can instead scan a QR code and download a portion of the app to book the vehicle. Vijay Murali, senior product manager at Lime, says that “in an underserved community, how much a scooter costs to ride is top of mind, so removing these unnecessary reservation fees makes them more likely to ride now.”
Despite challenges, the future of micromobility looks bright
As with any emerging industry, micromobility companies offering the relatively new service of shared or D2C bikes and scooters to the world have some bumpy roads ahead.
While some companies may fail along the way, the companies that do survive will likely thrive in this multi-billion-dollar market, as they provide urbanites with a viable solution to their transportation woes and offer a greener alternative to cars. Covid-19 has accelerated the potential consolidation of the space, but also driven demand in a time where single-rider, open-air transportation solutions are highly desirable.
Of course, much of this is dependent on geography, and whether cities or urban settings can accommodate these methods of transportation successfully.
But as consumer and governmental adoption grows, and as startups inch closer to achieving profitable unit economics, we can expect to see more and more bicycles and scooters on the streets of the world’s cities.
get the full report
This report was created with data from CB Insights’ emerging technology insights platform, which offers clarity into emerging tech and new business strategies through tools like:
- Earnings Transcripts Search Engine & Analytics to get an information edge on competitors’ and incumbents’ strategies
- Patent Analytics to see where innovation is happening next
- Company Mosaic Scores to evaluate startup health, based on our National Science Foundation-backed algorithm
- Business Relationships to quickly see a company’s competitors, partners, and more
- Market Sizing Tools to visualize market growth and spot the next big opportunity