Part 1 of Cityfi’s Take on the State of Shared Micromobility
By Evan Costagliola and Sarah Saltz
Welcome to part one of our three-part series on the future of shared micromobility. Now that the dust has settled from some of the industry turmoil in the past few months, we share our thinking around how we got here.
I. Shared micromobility is mobility’s Swiss Army Knife. Why is it so volatile?
The dynamic nature of shared micromobility is a hot topic in the world of mobility that has real consequences for how people live in and move around cities. While definitions vary from SAE’s insufficient “small/low speed powered vehicles under 500lbs” to the wide range of two- and three-wheeled form factors that are considered popular transportation, shared micromobility (alongside enhanced public transit services) is the most compelling competitor to the car and other polluting conveyors, particularly for short trips in urban environments. As roughly 80% of all urban trips are less than two miles long, local governments and city dwellers are increasingly aware that it doesn’t make sense to encourage or take short trips in a car. The market for these vehicles is huge, growing, and has plenty of room to pervade city life as they have in urbanized Northern Europe, Central Africa, Southeast Asia, Latin America and beyond. While the United States lags in adoption, much of the delay is pre-determined by history.
At any rate (or geographic market), the potential to generate value from shared micromobility trips is massive — whether your lens is mode shift and freedom to move (i.e., Big G “Government”) or total addressable market and value capture (i.e., Big I “Industry”). This is one of the few sectors along the mobility value chain where government and industry can and should partner to realize big policy and business wins. Shared micromobility as a spectrum of modalities and a vehicle to unlock positive outcomes for cities makes so much sense.
Amongst a backdrop of hundreds of millions of trips over the past 15 years, we’ve observed many missteps and missed opportunities that have hindered shared micromobility’s growth and acculturation in cities across the United States. At the same time, this sector is a wild ride right now. We closed out 2023 amid a period of incredible evolution and, for some, uncertainty. But when the dust settled after the first few months of 2024, Cityfi sees this as an ideal moment to reflect and prepare for the future.
There has been no shortage of writing on shared micromobility recently. From bankruptcies and shuttered city programs to new innovations like e-bike libraries and swappable battery towers, news outlets and thought leaders have narrowly focused the micromobility narrative on the shake ups and splashy announcements. In this first of a three-part series, we offer unique perspectives and historical context to the current state of shared micromobility. Reflecting on the decades leading up to today, there is no question that shared micromobility is at a crossroads, where the decisions policymakers, industry, and investors make today will shape micromobility’s growth, maturity, and diversity of offerings.
However, it would be a foolish exercise to evaluate where we are today and what needs to change without first understanding where we came from. This is where Cityfi offers a unique and timely perspective. Cityfi’s perspective is informed by our nearly two decades of experience working in this space across the public, private, and nonprofit sectors⏤from regulating shared micromobility services and managing public bike share systems to working for and advising micromobility startups across the global value chain. We’ve designed, launched, regulated, evaluated, and advocated for micromobility systems and we’d like to offer some insights on historic trends that have led to this moment. We’ve been thinking critically about the importance and health of the shared micromobility industry for a while and we’re so excited to share our thoughts.
II. Let’s go back in time…
It’s January 25, 2017. City leaders from 16 cities have gathered in Washington DC as part of Transportation for America’s Smart Cities Collaborative (facilitated by Cityfi) to discuss experiences and policy innovations related to mobility data, shared mobility and automation. The meeting abruptly halted when representatives from the City of Austin said, “We just got a call from the Mayor’s Office. A Chinese bike share company is about to drop a thousand dockless bikes on our streets. Is anyone else having this issue?”
And so goes the story of shared micromobility… at least the dockless version of it (RIP Blue Duck, Ofo, MoBike, and others). North American cities have seen many iterations of shared micromobility, starting with the docked bike share systems that took hold in the early 2010s. Cityfi’s Karina Ricks and Evan Costagliola were involved in the development and management of a number of these systems, including Capital Bikeshare in DC, Honolulu’s Biki system, Blue Bikes Nola in New Orleans, and Seattle’s Pronto Cycle Share (RIP), among others.
Then came the fight about “smart” bikes versus “dumb” docks, capital-lite hybrid docked systems, and the financial health of major players in the space like Alta Bike Share and PBSC. We’ve seen exciting news about corporate sponsors and automakers dipping their toes in the world of bike share. Micromobility companies like Lime, Spin and others refocused investment and operating higher revenue generating electric scooters between 2017 and 2018. Even Uber and Lyft entered the space, becoming “multimodal” offerings.
Volatility has been a theme in this space for some time. For example, in 2018, Social Bicycles rebranded its smart bike product as JUMP, which was then acquired by Uber and ultimately transferred to Lime in 2020. This was succeeded by the infamous scrapping of tens of thousands of red JUMP bikes, many of which were repurposed by Shared Mobility, Inc. in community-controlled systems across the country.
The volatility has manifested itself even more recently. We’ve all known that market consolidation, tough closures and bankruptcy would be inevitable. In 2023, the inevitability picked up steam. After acquiring Ford-backed Spin in March 2022, Tier went through two major rounds of layoffs and by September 2023, had sold the company to industry giant Bird. In December 2023 alone, Superpedestrian ceased operations of its LINK e-scooters, micromobility.com was delisted from NASDAQ, and Bird filed for bankruptcy. Perhaps most notably in 2023, Paris ended its shared scooter program, igniting discussions that could still cause stricter regulations in other cities across the world. Domestically, we saw one of the most storied American public bike share systems, Nice Ride MN, cease operations after its operator, Lyft, was unable to secure critical sponsorships.
As the private micromobility market matures, operators are evolving their approach, showing early signals of what’s to come. Amid slower flows of investment, companies are developing more sustainable, leaner, and self-sufficient business models that do not overly rely on influxes of cash. The name of the game is now stability. Voi announced layoffs in February, slashed overhead costs by nearly 50% in the past two years, while also achieving its strongest year ever and conveying confidence in its operation of a larger, higher-margin business. Woody Hartman, COO of Lime, noted “responsible, sophisticated, strong operators are transitioning into a very long-term mindset that is going to show sustainable growth and value for years and years to come.” Operators with long-term mindsets who demonstrate a path to financial sustainability and lean into city partnerships will have staying power.
III. Five Lessons from History
This moment in shared micromobility is not happening in a vacuum. There is a direct through line between past policy direction and the current state of the industry. From this history, we can uncover several lessons to help us understand where to go from here. We’ll look at five themes from history that are instructive to guide us moving forward.
Lesson 1: Missing ingredients for micromobility’s success
What do you get when the government adopts inefficient land use policy and invests countless billions of dollars in roadway infrastructure, operating subsidies, incentives and new technology to ensure the growth and supremacy of a single mode? The private automobile. Yes, the car is proof that mode-dominant investment and policy will capture demand, shape consumer preferences and change behavior.
Shared micromobility could take a page from the 120-year head start that the car has enjoyed. Take the humble traffic light: a symbol of managing the automobile. Before the traffic light, there was chaos at intersections. Now compare to shared micromobility, an industry and series of mobility options thriving on a patchwork of insufficient infrastructure and policies. Still in its adolescent phase (at least in the United States), this industry and collection of services are in need of more “traffic light” investments, policies, and infrastructure.
Let’s take perhaps the most important ingredient for long-term success–funding and investment. One-time federal seed funding for capital expenses initially propped up the first bike share systems in the US (remember CMAQ’s role in growing bike share in the 2010s?). We now understand that this was insufficient to build lasting, diverse, and financially solvent shared micromobility ecosystems. In 2017 and 2018, micromobility companies like Lime and Bird sold a radical vision of ubiquitous access to shared bikes and scooters with zero investment from the government. “Furnish a permit and we will do the rest”, they said. But, this was a pipedream that could never have delivered on its promises.
The last 15 years has been the story of cities and their private industry partners piloting, dipping their toes, and giving nominal financial support to shared bikes, scooters, and even mopeds. While cities experimented with scooter and bike share permit programs (normalizing and growing interest in micromobility in the meantime), the core ingredients needed to radically expand shared micromobility’s footprint were missing. Cities made limited, and in many cases no public investment in safe riding infrastructure, operating subsidy, equity programming, dedicated parking and charging, and more. Cash-strapped Departments of Transportation relied on permit fees to make meager investment in bike lanes, micromobility parking, and equity programs. In turn, private industry was not incentivized to build products that could meet the diversity of mobility needs present in American cities. Many companies launched and exited markets to find the most profitable mix of markets, while others dropped their multimodal offering to prioritize electric scooters only.
Lesson 2: Regulatory missteps
Shared micromobility was not the first disruptive shared mobility service to suddenly and seemingly ubiquitously grace city streets. When transportation network companies (TNCs) like Uber and Lyft entered the picture in 2013, city policymakers across the globe were unprepared to understand, manage and partner with these new services. This ultimately led to their preemption at the state level (except in Oregon and Washington).
Within this relatively unregulated context, TNCs scaled quickly and tried to lure riders in increasingly ludicrous ways (remember #UberKittens?). Investment into the industry grew and in places like New York City, San Francisco and Los Angeles, shared rides were so bankrolled by venture capital they were, at times, cheaper than public transit. During a stretch in 2015, Uber was burning through $1 million a week in driver and rider incentives in San Francisco alone. Cars and congestion proliferated, and challenged transit ridership. For a stretch, many cities were unable to control the chaos TNCs were bringing to their streets.
Dockless shared micromobility emerged in the aftermath of the TNC regulatory fight, and cities were determined to not lose the same battle twice. The result was a high degree of regulation, ranging from sophisticated and outcome-aligned to blunt and lacking evidence. This is despite the availability of carefully crafted policy guidance geared toward cities and, more recently, desperate pleas from industry to advance performance-based regulation. Cities asserted greater control, but stymied the nascent industry’s growth and innovation. While cities are tasked to regulate and steward their streets, there is a balance between over-regulation, industry support and aligning shared interests.
Historically, policies have not balanced the public good, safety, and financial sustainability, which is particularly challenging in an anemic public funding environment. Reflecting on the short history of regulating shared micromobility, some of the policy flash points included:
- Redistribution and deployment requirements that exacerbated challenging economics
- Vehicle caps and geographic restrictions to manage and expand demand
- Multi-vendor versus exclusive markets
- Exorbitantly high permit fees (e.g., $1 per scooter per day)
- Parking requirements requiring problematic geofencing and lock-to mechanisms
- Sidewalk riding detection requirements…a tech solution to a problem begging for bike lanes
In a nutshell, cities compelled their permitted operators to run a public mobility service without public mobility investment.
Lesson 3: One size didn’t (and will never) fit all
Whether permitted or publicly managed, shared micromobility programs that stick to the generic rules of thumb for regulation and system design will not meet the diverse needs of city dwellers. You can’t drop the same program template in every city and expect mass adoption; nor can cities offer one type of bike or scooter and expect people to rely on the system. Yet, this is the model in many cities across the United States. Take Seattle’s Pronto Cycle Share, a dock-based bike share system, which launched in 2015 but shut down after three years. It failed to gain traction because station siting and density prioritized downtown commuter riders, neglecting residential mobility and other pressing access needs. Or take the initial dockless deployments that dropped bikes and scooters indiscriminately without permission, highlighting the importance of tailoring programs to local policies, infrastructure, and priorities. We now know that this “spray and pray” approach will not lead to culture change and widespread adoption.
While the promise of ubiquitous shared micromobility resides in its ability to serve a diversity of short trips, shared micromobility systems (and their business models) have primarily served commuter and visitor trips using one form factor (i.e., a bike or a scooter) that benefits young, male, able-bodied riders. In research shared after Paris’ program ended in 2023, the Fédération pour le Professionnel de la Micromobilité found that the majority of shared e-scooter riders were males between 30–35 years old whereas people who rode personal micromobility devices tended to be older and took longer trips that did not replace walking or public transportation.
Even more critical, now that shared micromobility is in its pre-teen stage, is the need to expand form factors within shared micromobility programs and particularly in the burgeoning personal hauling and commercial delivery space. Many micromobility companies have developed and tested unique modifications to allow for seated, standing, three-wheeled, and cargo-enabled mobility. Other companies, particularly in Europe, have partnered with cities to establish dense networks of publicly available shared electric cargo bikes. Cities like Boston and Los Angeles are not far behind, aiming to roll out shared e-cargo bike programs in 2024.
Because there is no one winning solution, use case, program and business model diversity is a key to micromobility’s success. What will make shared micromobility essential is the diversity of offerings, whether bike share systems, e-bike libraries, rebate and ownership programs, or neighborhood-based shared e-cargo bikes. One thing we know is that a guaranteed recipe for failure is dropping a generic program and hoping people will adopt (or adapt). A sneak peak into the all-of-the-above future is happening in New York State. Cityfi is working with EIT InnoEnergy, Shared Mobility, Inc., and Nelson\Nygaard as part of Project MOVER, a New York State Energy Research and Development Agency-funded e-bike access project bringing three different types of electric micromobility programs to several Rivertowns in Westchester County and designing the programs with the communities involved. This project will bring diverse pathways to trying e-bikes and creating new user habits.
Lesson 4: Siloes and governance
Shared micromobility systems are often designed to discreetly layer into an existing urban environment. Analyze where there is trip demand, connections, and space, a city or company can easily plop a tranche of shared vehicles for public use. For example, bike share systems are often designed to solve for the common denominator of mobility needs with limited coordination with other shared mobility options. The first-/last-mile to transit use case is the exception to the rule. While undeniably convenient and effective for initial deployments, this siloed approach overlooks the potential of a truly seamless and integrated mobility experience for micromobility users — both physically and digitally.
Integrations between shared micromobility and other services (public transit, car share, passenger services, and even other shared micromobility services) have the potential to encourage multimodal trips, trip chaining with multiple modes, and confidence that car-lite living is possible. An integration mindset is also important for how public agencies govern, plan for, and fund micromobility in relation to other modes. Chicago’s Divvy Bike Share program added scooters to its public shared micromobility fleet, creating the country’s first combined docked bike and scooter share system. MovePGH, led by Cityfi’s Karina Ricks, is an even more bold model that convened the City of Pittsburgh and mobility industry innovators to build a coordinated shared mobility, mobility hub, and digital experience offering. Spin’s shared scooters and the City’s public bike share system, POGOH, were just two components of a comprehensive suite of mobility solutions.
At the same time, cities, transit agencies, nonprofits and their industry partners have engaged a wide range of governance models to deliver shared micromobility programs. Some have been able to accrue public mobility outcomes and achieve basic integrations better than others. Publicly managed systems have historically served as the predominant governance model for shared micromobility systems, from city managed, privately operated and city permitted schemes to the growing number of public transportation authority owned systems with partner operators (e.g., Capital Metro MetroBike and LA Metro). Nonprofit-led systems have seen a checkered track record with successes like Biki Bikeshare (Honolulu) and MoGo (Detroit) and disappointing closures like Nice Ride MN (a statewide organization in Minnesota).
Nonprofit governance models have been emerging that tap the financial, operational, and political experience of cities and transit agencies and the community-centered perspective of social enterprises and nonprofits like Mobility Development Partners and Shared Mobility, Inc. While these nonprofits have a strong track record of advising and operating docked and hybrid bike share systems, they have also been able take more time to plan and deploy programs directly, resulting in the advancement of community-controlled bike share and e-bike library programs that are deeply ingrained within the community and should continue to supplement the broader array of shared micromobility offerings.
Lesson 5: Micromobility’s booster pack
Electrification has been a game changer in the world of micromobility. Transitioning from pedal-powered to electric has fundamentally changed micromobility’s role in the urban mobility ecosystem. In many cases, dockless micromobility programs that shifted from pedal bikes to electric assist saw a two to threefold increase in ridership per bike. Scooters in these programs have always been electric and often saw considerably higher profit margin per trip than with pedal bikes. The customer’s desire to take longer, hillier, quicker, and generally sweat-free rides has led to systems like Austin, TX’s MetroBike bike share system to transition to a fully electric fleet.
Cities have largely not yet been able to address these challenges and here are some things we have noticed with this shift to electrification.
- Regulatory lag: Cities have struggled to keep pace with the rapid adoption of electric micromobility. Existing regulations often fail to address key issues like designated riding areas, parking solutions, and readily available charging infrastructure. This highlights the need for a historical reflection on urban planning and a push for adaptation to accommodate this new wave of transportation.
- Infrastructure needs: The infrastructure designed for traditional, human-powered micromobility may not be sufficient for faster electric vehicles. Incidents involving electric devices in conventional bike lanes underscore the dangers of speed differences. This calls for a dramatic increase in dedicated bike lanes and infrastructure to safely accommodate the growing diversity of electric micromobility users and vehicles.
- Battery regulation and innovation: The increased power and speed of electric bikes, scooters, and other form factors come with new challenges. Battery safety is a prime concern, with recent fire incidents linked to low-quality lithium-ion batteries serving as a stark reminder. This points to the need for stricter regulations and continued innovation in battery technology to ensure the safety and reliability of electric micromobility.
- Outdated electrification plans and public streets: While cities have focused on managing the current state of electric micromobility, there’s been a lack of forward-thinking policies to encourage wider adoption and acceptance of emerging use cases. Existing infrastructure in the public right-of-way has largely overlooked charging for electric micromobility.
IV. Conclusion
The history of shared micromobility — the ups and downs and the path forward to success — is not just about any one company, business model, or idea. What it does reflect is the absolutely crucial role cities play in shaping the future. It’s about the delicate balance between profit and public good in an industry where there is (and will continue to be) both good money to be made and a potential for real upside in the lives of many people.
We are excited by recent news coming from various levels of government, industry and even investors. There are also longstanding models and new ideas being tested today throughout the global micromobility community that might instruct how American cities and the industry need to refocus investment, governance, policy, and partnerships.
What did you think of Part 1? Write us and let us know what themes from history resonated the most — or didn’t. Stay tuned for Part 2 of this series on shared micromobility, where we’ll lay out some clear actions for the public sector, industry, and investors.
