As defined by the Society of Automotive Engineers, shared mobility is ‘the shared use of a vehicle, motorcycle, scooter, bicycle, or other travel mode. Shared mobility provides users with short-term access to one of these modes of travel as they are needed.’ Micromobility – the focus of this article – is actually so popular that it made it into the Merriam-Webster dictionary. Per MW micromobility is the
“transportation over short distances provided by lightweight, usually single-person vehicles (such as bicycles and scooters)”
At movmi, our goal is to build healthier communities by co-creating innovative shared mobility solutions. In order to reduce the dependency on private car ownership, we need to increase the number of alternative transportation options available to people on a global scale.
Using the UN Development Goals as our benchmark, shared mobility has the potential to create affordable, reliable, equitable and sustainable mobility options for everyone. During the global pandemic, we saw first hand how many of our tried and tested transportation systems failed us overnight. We need to rethink our planning and designing of shared mobility systems, so that they can become more resilient, especially in the wake of global crisis.
Micromobility is a perfect option to do just that with benefits such as:
- reduction in road congestion because shared mobility users generally own less cars. Plus a micromobility vehicle uses significantly less space.
- cutback of air pollution since most micromobility devices are zero emission vehicles.
- being a bridge for the first and last mile gap of public transit.
- offering a more affordable transportation option compared to owning your personal vehicles.
The movmi team has been involved in over 70 shared mobility projects worldwide, including numerous micromobility projects, including with providers such as Revel, Superpedestrian, Veemo, Velib, Bykko etc. In this article, we want to share with you our expertise and learnings from these projects.
In this article we will:
- Review the different types of micromobility business models
- Offer advice on how to build a micromobility business model to suit your needs
- Use movmi’s own case studies to explore the challenges and successes with different micromobility business models
Different Types of Micromobility Business Models
This is for shared mobility startups. The four different ways to build your micromobility business model:
1. B2C (business-to-consumer)
There are a number of variations for the B2C model: the first one is historically the oldest. The docked model (or also called A to B model) is flexible in the sense that members are allowed to pick up a vehicle in one location and drop it off in a different, designated dock. This model is a favourite of cities because it reduces clutter on sidewalks and streets. It also makes it more predictable for members to find the bikes since the stations are very visible infrastructure pieces. Lastly, if the docks are connected to electric grid, e-bikes/e-scooters can be re-charged while parked. A slight variation is the introduction of virtual parking zones, where geofencing technology is used instead of physical infrastructure.
The dockless or free-floating model, arguably the most popular model, allows members to end their trips anywhere within a designated home area without having to find a dedicated dock or station. It hasn’t been without challenges and we’ll go into those into more detail later on.
Lastly, we are seeing an increased shift towards long-term or even subscription models at the moment. With the subscription model, the micromobility device “lives” with you. You are responsible for storing and charging. You can generally choose from a range of brands and vehicle types, and may be able to switch vehicles as you wish. Most subscription services have no fixed contracts, and you can cancel your subscription when you want.
According to Polaris, the global B2C mobility sharing market was valued at USD 34.49 billion in 2021 and is expected to grow at a CAGR of 29.0% until 2030.
B2C Micromobility Business Model Examples:
Subscription E-bikes for b2b2c and b2c: Zygg
With Toronto’s E-bike subscription service Zygg, you can choose a bike and get it delivered where you want, when you want it. It works on a pay-monthly subscription model which you can cancel at any time. The subscription includes an array of services including 24/hour customer support and a new e-bike within 24 hours if yours gets damaged.
Cargo Bike sharing: cargovelo2go
At selected locations across Switzerland, cargovelo2go cargo bikes can be rented, not only by the hour, but for a period of up to 30 days. The longer you use the Cargovelo, the bigger the discount they offer on the rental prices. For a rental of 8 days you get a discount of 5%, from then on there is a discount of one percent for each additional day.
2. B2B (business-to-business)
Generally in shared mobility, B2B is added to a B2C model as an additional revenue stream and to increase utilization during downtimes. For micromobility this is a little bit different – some delivery drivers rent micromobility devices – however we also start to see dedicated B2B services pop up. One area is corporate mobility where a company gets a dedicated micromobility fleet to provide their employees with an alternative solution to get around for meetings etc. For these larger companies it can also make sense to replace their own fleets with a shared mobility one, to reduce total overall costs, to reduce the number of parking spaces required and to cut down on their carbon footprint.
In terms of service type, the B2B mobility sharing market can be segregated into passenger transportation and goods transportation. Increasingly we have seen companies such as Uber and Lyft utilize this B2B model with their food and grocery delivery services using both automotive vehicles and micromobility solutions.
In addition to that, real estate developers are beginning to partner with micromobility operators to offer transportation solutions for their tenants as part of the amenities – reducing the need for parking spaces and reducing their overall carbon footprint.
According to the latest report issued by Facts and Factors, the global B2B Mobility Sharing Market stood at about USD 31.25 Billion in 2020 and is expected to generate the value of an estimated USD 119.2 Billion by end of 2026.
B2B Micromobility Business Model Examples
e-Colibri is a French B2B carsharing solution for corporate mobility. Their main objective is to reduce companies’ carbon footprint by reducing the size of fleets, improving fleet management and accelerating the transition to a more sustainable mobility model that includes cleaner and more suitable vehicles, such as eBikes, eScooters and eMopeds.
3. P2P (Peer-To-Peer)
Traditionally P2P is more common with car owners, giving them the benefit of earning revenue on their vehicle when it would have otherwise sat idle. This model is now being used in the micromobility space now, for bikes, e-scooters, mopeds, etc.
People who want to rent the vehicle need to apply on the platform and be approved into the membership base. A member will make a request to the vehicle owner where they can accept or decline the request. Depending on the company, physical keys may be handed off between owner and renter or renters receive a special “technology key” to unlock the vehicle for the reservation time period (usually done via app).
From a service provider perspective, P2P micromobility sharing alleviates upfront costs and so it is more economically viable to bring to lower-density neighborhoods than traditional bike or scooter sharing services. However, there are certain barriers to participating in P2P which have to be overcome: liability and insurance, aversion to interacting with strangers and trust.
P2P Micromobility Business Model Example
Spinlister was started by USC students in California as a peer to peer bicycle sharing platform. It was released in 2013. During this period of time, the platform gained almost $450,000 from the investors and was a real boom among the cyclists.
The concept is pretty easy. You post a photo of your bike on the app, mention the rent price and short description. When a person comes to explore your city or is just in need of a bike for some period of time, they can easily rent it via the app.
4. Public/Private Partnership
A public/private shared mobility business model is one where a private company works in conjunction with a city to provide a shared service. It’s the most popular setup for traditional bikesharing. Both partners split the associated costs on the venture and usually this type of business model creates a successful service as both the company and city have ‘skin in the game’. However, it is not an easy model to build and navigate as there are many different players involved each with their own interests. It is also harder to scale this type of model.
Public/Private Business Model Examples
Mobi by Shaw Go
Mobi by Shaw Go is Vancouver’s only bike share service. It is a public/private partnership with the city of Vancouver. Similar to other station based bike share services, you can rent a bike from one of the many stations around the city, either by the day, month or year.
Is There A Market For Your Micromobility Business Model?
When it comes to transportation, place-based setup is key. There is no one-size fits all, because regulations, appetite of city officials for new solutions and the available infrastructure that support travels that are not in a car can vary greatly. Assessing each city with limited academic research, makes it difficult to determine when and if a city has a viable market for shared mobility services. Using the knowledge of industry experts, consulting on shared mobility projects and with the help of our SMCI-PT dashboard, we’ve created a criteria to determine where or not there is a market for shared mobility services within cities.
The Shared Mobility City Index (SMCI) takes into consideration functional, political, social and environmental components, to assess whether a city is suitable. We examine commuting patterns, city sustainability vision and plans, current shared mobility providers, public to private cost comparison and city density to understand the market potential for shared mobility services in each city.
Market Size Overview
Micromobility suffered for a while in terms of its image. The main problem being the lack of legislative and regulatory frameworks. After several setbacks, and with an increasing number of operators in certain cities, the market is now becoming more structured and better established.
According to Precedence Research, the global micro-mobility market size was worth US$ 48.11 billion in 2021 and is expected to surpass around US$ 198.03 billion by 2030. The factors such as rising oil and gas, rising road congestion, saturation in the automotive industry, and convenience of parking are expected to propel the micromobility market expansion. In addition, factors such as the global micromobility market growth of shared electric kick scooters and shared electric bicycle services in the wake of the pandemic, have opened up new potential for micromobility services.
In response to growing environmental concerns, government officials are offering incentives to use environmentally friendly transportation options such as electric bikes, bicycles, and electric mopeds. Governments across the world are also increasing the number of bike lanes, charging stations, and bike parking zones within cities. As a result, these initiatives are driving the growth of the micromobility market.
Analysing more than 50 million anonymous car trips, Inrix Research found that 48 per cent of all car trips in the most congested US metro areas are less than three miles. Cities with a high percentage of short daily car journeys (from 1 to 5 km) have great potential in terms of micromobility, which can effectively replace these journeys.
On average, a car takes up 12.5 m2 of road space, while 15 electric bicycles and their charging stations take up the same amount of space. Micromobility solutions provide more people with access to transport using the same available space. Therefore cities that have a high population density are lacking in both space and areas for new infrastructure would benefit the most from micromobility solutions.
Finally, although not a requirement, cities with mild temperatures and with minimal topographic variation have the advantage of being able to guarantee use of micromobility services all year round.
How does Micromobility Differ From Traditional Carsharing Business Models
Micromobility Revenue Model
Bike and scooter share station-based/docked systems are a little easier to understand, as the also use a membership model, with unlimited monthly or annual passes available ranging from $100-$160/year, as well as single-ride options, with no extra charge per ride. There are often also day passes where single rides are capped at a certain number of minutes (i.e 30min).
For free-floating/dockless micromobility options such as e-scooters and bike sharing, the average rate is between $0.15 to $0.39 per minute, in addition to the standard $1.00 unlocking fee, depending on the company. The average 12 minute scooter/bike share trip costs $2.80 to $4.70 depending on the service.
It’s also important to note that many cities have rebates for electric bikes and these are applicable to fleet owners too. A new bill has just been introduced to US Congress, the e-bikes act, which allows for up to $1500 of credit for individual e-bikes if it passes. This is also the case for electric cars. You can receive US $7500 credit in the US for electric cars so you are getting 5-10X the number of vehicles for the same amount.
The Impact of Micromobility
Shared mobility members have lower personal vehicle ownership and usage:
In Metro Vancouver, a survey conducted by the TSRC found that out of 6,000+ bikesharing users, 50% reduced their personal vehicle usage.
Shared Mobility Reduces Emissions:
Bikesharing has major contributions to GHG reduction. A study of a bikesharing scheme in Edinburgh calculated the GHG emissions of its fleet and found that a cycling trip emitted 9.6 g CO2e/km, compared to the average 259 g CO2e/km emission of a petrol car.
Due to the decrease in personal vehicles and consequently, on parking demand, the City of Bremen has saved €60-95M ($86-136M CAD) on parkade investments. For residents, the main motive for using mobility stations is cost, reliability and convenience. Foregoing a personal vehicle means saving on time, effort and money placed on maintenance, making carsharing, micromobility and public transit more economically viable.
Case Study: B-Cycle, Denver, Colorado
“Each mile someone rides on a bike-share bike instead of driving a car means about one pound of carbon dioxide is kept out of the atmosphere,” – Dr. Susan Shaheen.
B-Cycle, the company that designs the bike-sharing systems used in Denver and more than 20 other cities across the country, says that on all of its systems combined, 2.1 million bike trips covering 4.5 million miles have been made on its bicycles since 2010, all of which have offset more than 2,948 metric tons of CO2 emissions and saved more than 330,000 gallons of gasoline.
Business Operations: Preparation for a winning shared mobility business model
Once you have decided what business model you would like to offer, it is time to figure out how to prepare and launch your service.
Permission from regulatory bodies
Regulating the future of mobility is a complex challenge because,
a) technology cycles are much faster than typical policy or planning cycles,
b) it involves multiple levels of government often not fully co-ordinated in their approaches and
c) a host of issues that extend far beyond a vehicle’s ability to safely navigate city streets.
In order to create a successful shared mobility model, you need to take a look at the Federal, Provincial and municipal policies and regulations that will impact your shared mobility operations. Understanding of what the regulatory conditions are so your service operates legally in the first place is crucial. Understanding this will also help you take advantages of any incentives and highlight any adjustments you need to make to the product design or your operations, so that you can create a viable, long-term service.
It’s important that you complete a scan of federal regulations and innovation policies that impact shared mobility. Some things to look into are:
- Safety guidelines and standards for new technology: Is your vehicle of choice already regulated?
- Infrastructure and investment support: Are there vehicle rebates that you can tap into?
- Data management and privacy: What features does your technology need to have to meet the requirements?
- Overarching environmental policies: Is your service meeting any objectives and what incentives are available for that?
- Taxation: Are there tax breaks if the offer is corporate?
You must also complete a scan of provincial and territorial rules and innovation policies that address shared mobility. Some things to explore are:
- Vehicle registration and safety requirements
- List of insurance regulations and liability tied to it
- Infrastructure and investment support
- Overarching environmental policies
Finally, you must perform a scan of municipal bylaws with a special focus on curbside, as well as a special license for shared mobility (and stipulations tied to them). Things to consider include:
- Traffic, parking and curbside access regulations
- Enforcement rules
- Environmental/sustainability plans that will impact shared mobility in the future
- Equity objectives of city
Simultaneously to reviewing the regulatory landscape, most operators conduct a market assessment: it is crucial to understand the competitive landscape, who your target audience is, what their transportation frustrations are and if your business model will solve that. It is not just about understanding your target demographics, it is also understanding the existing market and products out there.
A good method of exploring the competitive micromobility landscape and the viability of your own solution is through demo days. They are an essential part of operational planning, regardless of the municipality. movmi believes that it is critical to test the actual product that will be deployed in your community during an RFP process and before the actual launch. Some things to explore when launching a micromobility operation are:
If we take Superpedestrian as an example, they spent 10 years on their onboard Vehicle Intelligence system. The platform continuously monitors internal systems and can prevent 100+ types of electronics failures within nanoseconds. It performs system health checks 1000 times per second, ensuring vehicle safety and prolonging component lifetimes. In fact the average vehicle lifespan is more than 2x the industry average, with LINK e-scooters lasting 5+ years. Unsafe vehicles are immediately taken out-of-service and cannot be ridden.
Lifespan and carbon neutrality:
Carbon neutrality means having an equal balance between the carbon we emit and the carbon we absorb from the atmosphere. It is important to conduct a Life-Cycle Assessment on your assets. Among the most important assumptions made during an LCA is the projected lifespan of a vehicle. That’s because a majority of the emissions attributed to an e-scooter come from the manufacturing process itself. These initial emissions then are amortized over the lifespan of the vehicle, meaning the more miles traveled, the lower the per-mile emissions.
Bird made a point to invest heavily in research and development, extending their fleet lifespan by 400% in just two years. In 2020, the Bird Two became the industry’s most sustainable scooter, using advanced aerospace and automotive engineering to increase its projected lifespan beyond 24 months.
How easy is it for members to register, book, unlock, ride and park the e-scooters/bikes.
This focuses on the hardware of shared e-scooters and bikes such as, the width of handlebars, the width and length of the foot deck, the braking system, whether the scooter has suspension, the ease of use of the kickstand and if there is a speed-gage etc. All these components work together to ensure the rider has a comfortable journey and one that they would like to repeat.
Geofences are a set of rules linked to a virtual geographic perimeter. For example, a slow-speed zone in a pedestrian plaza can be defined with a geofence. When effective, geofences dramatically improve rider compliance with slow-speed, no-riding, and no-parking zones.
The next step is to sort out finances and build a proper capital budget as well as a 3 or 5 year statement of operations. You have to answer these questions on the revenue side:
- Is your business model based on a subscription model? If yes, have you factored in churn?
- If it is a pay-as-you-go model you will attract a lot more members but also have a much higher percentage of inactive users.
- What is the % split between inactive, active and your best users?
- And what are the average trip lengths and distances based on the use cases you target?
On the cost side, it is not just the lease, insurance, maintenance, software license and staffing costs that you need to consider. You also have to factor in the application processing costs, bad debt and if you are in a market with higher than normal fraudulent activities. On top of the sales taxes, you will most likely also be subject to tax rates for rental businesses. All of these numbers are different in each market and having a fully flexible financial model like we have built will make sorting out your finances as easy as it can be.
When looking at micromobility technology platforms, you should investigate how they support your operations in the long run. This means they need to support you in the following 5 areas:
- hardware support (battery life, durability and docking provisions) and connectivity (accuracy and data access)
- pricing tables, promotion modules, billing methods and payments gateways;
- fleet management with proper asset tracking and an easy map overview;
- customer management which includes a ticketing system that supports different teams;
- and finally a robust reporting tool managing your KPIs and ideally also a dashboard.
Finally you also need to figure out the setup of your operations. The success of your micromobility initiative depends on many factors but in order to be functional, you have to consider three key areas of Shared Mobility Design:
- Your community
- Your members
- Your assets
Each area is lead by a team:
- The community team is mainly responsible for growing your membership, vehicle utilization and revenues.
- The fleet team is responsible for vehicle maintenance making sure that the vehicles are clean, safe and in the right place.
- The member services team is responsible for fixing problems that occur when your members try to sign up, rent a vehicle or pay for the service.
Micromobility Business Model: Common Mistakes and Misconceptions
There are a few common mistakes and misconceptions when starting a micromobility business.
Micrombility: Shared E-scooters, Kelowna
E-scooters took to the streets of Kelowna, B.C. for the first time in April, 2021 as part of a provincial pilot program, but they had a rocky start and caused problems for people with mobility issues when riders began parking them in the middle of sidewalks at the end of their trip.
In June, 2021, Kelowna city council was given the option to cancel the e-scooter pilots entirely or to let those who could comply with the new rules to keep their services running. Councilors voted 6-3 to keep the program running but with many restrictions.
The key issue was whether the companies could put the technology in place to identify when users were riding on sidewalks and follow up by warning or fining those riders. These new regulations were put into place, intended to make use of devices safer and reduce the number of complaints about bad scooter behaviour. Restrictions included banning e-scooter rentals downtown between 10:30 p.m. and 4 a.m. – limiting the total scooter rental fleet to 700 devices – preventing scooters from being ridden along the downtown waterfront and along the pedestrianized blocks of Bernard Avenue.
Underestimate the Importance of Convenience
Breeze Bike Share
A couple of common reasons for bikeshare providers closing down operations are; poor ridership levels, not including e-bikes and not providing enough docking stations and competing against dockless micromobility operators. An example of this is Santa Monica’s bikeshare program, Breeze.
Ridership began to decline with the growth of private micro-mobility options such as shared scooters and bikes launching into the city. In 2019, Santa Monica was home to scooter rentals from Bird, Lime, Lyft and Jump. Jump also launched a fleet of electric bikes. Breeze was a manual system with no electric option and while the bikes came with locks that could be secured anywhere, system pricing punished riders who chose to leave the bikes outside a designated parking space, whereas their competitors structured their pricing to allow for vehicles to be picked up and dropped off anywhere.
Underestimate operational challenges
Six months into the highly anticipated “Vélib Second Generation” program, launched in 2017, the situation can only be described as chaotic. Out of the 1,400 stations that were forecast to already be up-and-running in Paris and its suburbs, less than half – or 670 according to the Vélib workers’ union SAVM – have now been installed. Out of these, some 400 stations are currently running on batteries rather than electricity, meaning they quickly run out of juice and the rack of available bikes end up blocked, and effectively, unusable. French media has dubbed the Vélib debacle “Vélibgate” and social media is awash with anecdotes and testimonies of what is widely seen as a failed, and ultimately very expensive, Paris city project.
Users of the system also complain of the malfunctioning of the bikes themselves: Broken seats, defective screens, and on top of it all, deactivated access cards, as well as a mobile app that keeps on crashing.
At the end of 2017, the self-service bike system recorded an average of 110,000 daily uses. At the end of April, that number had dwindled to just 30,000 uses per day, illustrating the actual access and availability of the bicycles.
Velib has recovered from this since then. But planning your expansion just as well as your launch is an important lesson to remember.
movmi’s Case Study: Micromobility Business Model
Veemo, Electric Bikeshare
UBC’s Vancouver campus is spread out and was looking at micromobility options to support students moving between buildings through their “living lab” program. Supported by UBC Parking group, it was decided to run a six months pilot during the winter, evaluating if shared velomobiles (Veemos) would be used and how.
The Veemo vehicles incorporate elements from both the car and the bicycle. They work similarly to a normal electric bicycle, as they are human-powered but have an electric component to help get over hills or long distances. At the same time, they incorporate car-like functionality including storage, weather protection, and a navigation panel. Sustainable features of these vehicles include the rooftop solar panels that charge the vehicle’s battery.
movmi’s team supported Velometro in the setup of the pilot and conducted primary market research to identify the right pricing structure. Additionally, movmi trained the operational team at Velometro on customer service and fleet management, provided standard operating procedures as well as checklists for the daily operations.
During the six-month pilot at UBC, 1200+ users logged over 1000 trips, rode over 2000 kilometers, and burned over 120 000 calories. UBC students and other users of the service praised aspects of the service including ease of use, convenience, and usefulness in getting around campus and keeping things like posters dry.
Are you interested in learning more about the business model of your next shared mobility launch? Send us a note and we’ll help you get started.