Part 2 of Cityfi’s Take on the State of Shared Micromobility
By Evan Costagliola and Sarah Saltz
Welcome to the second of three installments of Cityfi’s deep dive into the past, present, and future of shared micromobility. In Part 1, we explored themes from history to bring to this current moment. If you missed Part 1, catch up here. Today in Part 2, we present key actions to meet the present moment. This is not a comprehensive list of actions, but the ones that rise to the top of list for us.
I. What now? A crossroads.
For those that govern, provide and fund shared micromobility, the path that they choose now will determine the future of our mobility systems for decades to come. You read that correctly. That is not hyperbole. The term inflection point gets thrown around often, but public agencies and industry have arrived at that point.
While some of the choices we made in the past have perpetuated inequities and inefficiencies, we stand at a critical juncture where we can reshape the outcomes. The choices we make regarding funding, public mobility strategies, planning, programs, and policies will shape the trajectory of cities. The Cityfi team knows all too well that shifting away from the status quo of public and private sector siloes to create an equitable, clean and financially sustainable mobility ecosystem demands rapid, bold action — a daunting yet necessary task.
The complex dynamics between the public and private sectors have brought us to this point. Both sides (and the interstitial non-profit and foundation spaces) have a critical role to play now and in the future. In the absence of strong, proactive public sector leadership that envisions a holistic shared micromobility system, industry and business strategies will continue to drive change and even influence policy direction. This inertia-driven dynamic has fostered tension and a lack of coordination across sectors. The status quo path, prevalent across the country, has resulted in fragmented and limited public micromobility systems that fail to meet people’s needs adequately.
Alternatively, bold public sector leadership can pave the way for robust mobility marketplaces that integrate and uplift industry in healthy, sustainable ways — benefiting both the public and businesses. This is a fundamental belief here at Cityfi: strong business outcomes need not come at the expense of the public good, and vice versa. They are deeply intertwined, particularly in the public mobility industry, as evidenced by cities like Paris, Barcelona, Bogotá, Mexico City, Austin (yes, we said Austin), and those across Germany and the Netherlands.
II. Leveling the Playing Field
To embark on the path toward the future we and other practitioners envision (more on this future in Part 3), we must level the playing field, ending the decades-long dominance of private automobiles. Only then will we enable true mobility choice, allowing people to design their own futures by selecting the options that best meet their needs — the cornerstone of genuine mobility equity, a promise currently unfulfilled.
As we learned in Part 1, there is a delicate balance between insufficient and market-chilling regulation. This moment calls for more aggressive public sector action to steer the industry in the right direction. And industry needs to come to the table in true partnership with the public sector. If we are to truly level the playing field, the collective “We” need to quickly achieve the level of infrastructure, policy, industry maturity and cultural acceptance that the automobile achieved over 120 years — a daunting baseline.
We urgently call upon both the public and private sectors to take action in five critical areas. Overall, we task the public sector with embracing bolder, more decisive approaches and prioritizing prosperity urbanism over austerity urbanism. From the private sector, we need smarter, more long-term oriented responses that transcend solely profit-driven business strategies.
III. Five Critical Themes to Act on Today
What should the public sector do?
Transportation agencies, particularly cities, have endured decades of austerity urbanism that emphasized public sector “efficiencies”, privatization of public services, and fee-for-service mobility. Cities and transit agencies were in a reductive state, attempting to creatively build mobility systems with less funding. Cities relied on meager federal funds (for capital only) to build out fledgling bike share systems, while venture capital (VC) backed dockless scooter and bike share companies initially sold the idea that cities could get a lot more mobility without taxpayers footing the bill. We now know that both pathways give you incomplete mobility systems that serve few and leave a lot to be desired.
So, what should be done? Federal, state, and regional governments like Metropolitan Planning Organizations (MPOs) must rapidly restructure and expand how they fund shared micromobility capital and operating expenses at the local level. Let’s enter a new period of, not just prosperity urbanism, but posterity urbanism: much greater public investment and sustained support.
We need to rethink both “flow down” funding from the federal and state government, MPOs, as well as direct funding for local programs. We are seeing positive steps, as exemplified by the Federal Transit Administration (FTA) recently allowing more funding to be used for shared micromobility systems. This move recognizes the crucial role micromobility plays in enhancing mobility and providing first-and-last-mile connections to public transit, thereby promoting a more integrated and sustainable transportation network. We are also impressed by the Metropolitan Transportation Commission and the California Air Resources Board’s efforts to carve out funding for mobility hubs across the Bay Area and expand clean mobility options in under-resourced communities across the State of California, respectively. This is the kind of commitment and creativity needed; though even more funding should be allocated to expanding shared micromobility over time.
Locally, cities are learning that local mobility initiatives require local funding action. Cities need to think about funding mobility as if it were an essential public service that is vital to economic development and also ensures mobility for people who are struggling. Leading cities and counties have started passing major mobility referenda. In early March 2024, Los Angeles voters passed Measure HLA to fund transit, active transportation and mobility service enhancements. Austin also passed Proposition B, a $460 million mobility bond in 2020, including funds for expanding bike share and shared micromobility services, and improving pedestrian and cycling infrastructure.
What should the private sector do?
On the other side of the figurative coin, the private sector needs to make smarter investments to continue influencing and supporting the shared micromobility ecosystem. To ensure their investments have lasting impact, investors and industry players must recognize that community integration is key, and their funding should help subsidize and innovate on strong public sector partnerships, community integration and programming elements. This aspect is largely missing from the private sector investment landscape.
Rather than backing misguided or unsustainable ideas, corporate decision makers and venture capitalists should discern between quick buck investments and long-term returns based on partnership potential and staying power. For instance, companies like Coup Mobility, Cityscoot, Spin, and Biki went out of business despite securing significant VC funding, serving as cautionary tales from the past.
Rather than speculating and treating these companies like SaaS companies, investors should reframe their process and mindset to view these companies as asset-heavy, long term investments in a highly regulated industry. In addition to more traditional metrics like user growth, leaning more on performance indicators such as political strength and policy headwinds would strengthen investments and companies. Remember, the auto-industrial complex had over 100 years to figure out how to build successful car companies amid very favorable federal and state regulation and funding environments. The shared micromobility industry is figuring out optimal business models amid a much less mature funding and policy environment, and investors must understand and support them to see high returns.
What should the public sector do?
A second fundamental restructuring is repositioning shared micromobility away from separate systems — some public, some private — to an integrated public mobility system. To get there, cities and localities must shift their tenders to focus on access to micromobility more holistically rather than individual modes. We must move from market siloes to “market making”. While an open permitted market approach was important during the early days to get initial deployments on the ground and sell the concept, it isn’t a sustainable long-term solution. It is time for the public sector to define the types of services it desires, service quality and priorities (through service level agreements, or SLAs), and revenue opportunities that will ensure the desired system design is met and companies can capitalize enough to provide excellent products and operations. The public sector can control this with their solicitations and permitting processes, setting the industry and market up for success or failure. It is time to sunset the open market approach and adopt longer-term contracting and procurement models that create an environment for long-term partnerships.
We won’t get on our soapbox about workable governance structures right now, but we are encouraged by Capital Metro’s move to bring MetroBike bike share into its family of services. We are also inspired by the large public agency concession tender model — often seen in Europe — encompassing capital/infrastructure delivery and operations for public mobility services. In this model (which must be supported by robust funding), the public sector then sets SLAs which the companies must deliver. If they don’t, another company will eagerly replace them.
We foresee creative business partnerships and ventures thriving in this model. Public agencies should manage shared micromobility within the confines of public mobility, which also expands the market opportunity for private companies as concessionaires. To start, we can replicate, improve, and expand upon major mobility initiatives and public private-partnerships such as MovePGH in Pittsburgh.
What should the private sector do?
Assuming the public sector rises to the occasion on the call to action above and, the private sector also has a role to play. In the world of shared micromobility, there is a diverse value chain between the original equipment manufacturers (OEMs), hardware, software, and other technology developers (think Drover AI), and service providers. We need to support smarter consolidation and integration to organize and unify the full value chain of companies involved in the success of shared micromobility.
To provide a truly relevant offering, we need a distributor and/or investor in shared micromobility that is involved in all of the component parts needed to make the industry work, and with a much broader portfolio, is prepared to match the ecosystem approach of the public sector. Right now, the private sector takes a pretty siloed approach to this space, where every involved party focuses on one part of the ecosystem. This could resemble Pon Holdings, a Dutch company that has a comprehensive ecosystem view of the industry, encompassing bicycle manufacturing, distribution, retail, and mobility services. With its partnership-forward approach and diverse portfolio spanning bicycles, e-bikes, and micromobility solutions, Pon exemplifies an integrated approach that could serve as a model for replicating in the private sector. The closest we had was Lime, where for a brief moment in 2018, the company had bikeshare, scooter share, and car share in its portfolio, showcasing an attempted ecosystem play.
To be clear, we are not calling for more consolidation or mergers in shared micromobility. We need to tread carefully when it comes to the size, impact, and integration of companies. Depending on who you ask, there have not been many cases where a merger or consolidation has led to dramatically improved shared micromobility services in cities. Some companies have the ingredients to successfully provide this broader set of services, ranging from technology startups like Lime and Via to contracted service companies such as Transdev and Arriva. Ultimately, the private sector must align with the public sector’s ecosystem approach, fostering collaboration and integration across the shared micromobility value chain.
What should the public sector do?
To create climate-friendly, active, equitable, and vibrant cities, we must prioritize shared micromobility in every way possible, making it an irresistible choice — a “no-brainer”. In reality, the only way to achieve this is to rip the bandaid off and start taking aggressive policy actions. For too long, we have taken the path of least resistance when it comes to shared micromobility policy, making small, incremental steps forward and relying on policies that are politically palatable and “good enough for now.” We need to move beyond piecemeal or small, low-risk, low-stakes pilots that don’t do much more than buy time or pave the way for potential aggressive policy actions in the future.
Consider zero-emission zones as an example: Many cities in the US are only able or willing to take a piecemeal approach, making baby steps forward by piloting in really small areas. Other cities have leaned into mandates and large-scale phased expansions. London introduced the Ultra Low Emission Zone in central London, which has incrementally expanded and is now 18 times the size of the original zone. Milan, which also implemented one of Europe’s first congestion charge and zero-emission policies, launched its Area B Low Emission Zone in February 2019, banning high-polluting vehicles from 70% of the City. On January 1, 2025, roughly 40 cities in the Netherlands will implement zero-emission zones, as mandated by Dutch law. Bold policy yields market response time and time again: People will access those spaces using zero or low-emission small vehicles, bolstering industries like e-cargo bikes.
Shared micromobility has been deprioritized so dramatically and left with an abysmally limited share of space in the public right-of-way. At what point in the future does this no longer work for us? We argue that the time is now for bold directives and requirements.
Carving out space for bike share docks, drop zones and bike lanes (aka the bare minimum) are vital changes to move the needle. But this is just the tip of the iceberg. In addition to vast networks of protected bikeways, we need to rethink street design at locations where bicycles and other modes interact. To achieve transformative mode shifts, is one bike lane sufficient to encompass both electrified and human-powered micromobility? Cities must make big changes to how they safely accommodate many forms of micromobility through policy and street design. And of course, mobility data will be critical to ensure streets meet the growing demand for micromobility, and the Mobility and Curb Data Specifications will be absolutely critical to support sound, data-driven network design.
Cities’ thinking about this is not nearly as progressive as it should be. Even the streets we consider progressive miss a lot of human-centered design and mostly focus on checking the boxes of adding bike lanes. Is this truly that progressive? Does any US city truly have a network that allows micromobility riders to travel everywhere and at any time safely and comfortably?
Cities must also be bold and rethink how they manage transportation demand. Transportation demand management (TDM) is a decades-old policy tool that, with some limited exceptions, have not been designed to support widespread shared micromobility adoption. Whether capping vehicle trips and creating financial and permitting benefits (or penalties), cities need to adopt and implement increasingly more progressive demand management strategies.
What should the private sector do?
The private sector’s role is simple: create the environment you need to thrive and be prepared to scale. As the public sector paves the way with pricing, access, and demand management measures, the micromobility ecosystem will explode in response, creating lucrative opportunities for companies that are prepared and agile enough to capitalize on them.
Companies should proactively advocate for bold public policy, and then position themselves to scale up in the aftermath of these bold policy actions. A prime example is how the Dutch company Pon Holdings, which we discussed in the previous theme, swiftly adapted its business model to align with the Netherlands’ ambitious zero-emission policies, expanding its portfolio of electric bicycles, cargo bikes, and micromobility solutions. Similarly, when London introduced its Ultra Low Emission Zone, companies like Zapp Electric Vehicles and Oxbotica ramped up their production and deployment of electric cargo vehicles and autonomous delivery solutions, respectively.
We firmly believe these policy ideas will take root in the United States. The Los Angeles Cleantech Incubator’s Zero Emission Delivery City Challenge (supported by Cityfi) is but a small stepping stone for broader city adoption. Venture capitalists and investors must respond accordingly, updating their models and governance structures to reflect the changing policy landscape. Traditional investment models have not been adequately calibrated to achieve positive societal outcomes or forge financially sustainable partnerships with the micromobility industry. Overall, the private sector needs to gain a deeper understanding of the policy environment and make informed, community-centric investment decisions that align with the public sector’s bold vision.
The private sector should also consider adopting more flexible and adaptable business models that can swiftly pivot in response to evolving policies. For instance, companies could explore subscription-based models or pay-as-you-go models, which would allow them to adjust their pricing and offerings based on factors like curb access charges or zero-emission zone fees.
What should the public sector do?
Agencies need to better incorporate design thinking into every aspect of our shared micromobility systems, from network planning and service design to the products and policies. We can no longer afford to limit our focus to the two dominant form factors — bikes and scooters. Cities need to make room for a broader range of shared micromobility options, such as e-cargo bikes, mopeds, and even micro-cars, which present major untapped opportunities.
A truly inclusive system works for everyone and all types of trips, not just specific segments of the population. We shouldn’t relegate accessibility to separate systems like paratransit. Instead, we should strive to achieve the level of inclusivity exemplified by the City of Amsterdam that subsidizes the cost of accessible microcars.
At the core of human-centered design is the principle of “iterate, iterate, iterate.” This is particularly true in civic innovation, where each city and community can have unique characteristics, needs, and challenges. However, this often can be challenging for the private sector, as a “one-size-fits-all” approach is more profitable. There is no silver bullet solution to resolving this friction, but it falls on the public sector to step in where the private sector’s role ends, ensuring the integration of different modes and programs, as well as full accessibility.
The public sector needs to create true sandboxes, or opportunities for innovation and active engagement with industry partners — not just lip service. The issue of charging infrastructure serves as a prime example. Cities and transit agencies need to be at the forefront of creating an environment conducive to innovation, where electric shared micromobility infrastructure can be installed in practice, not just in theory. Many cities express a desire for such infrastructure but fail to specify where it should be installed, how they will facilitate its implementation, and what avenues they will pursue to engage with industry and establish partnerships. This passive, reactive approach, focused on showcasing and issuing creative challenges, adheres to tried-and-tested methods but falls short of driving meaningful progress.
What should the private sector do?
Companies must design their products and business models with cities and people at the forefront, not just to myopically maximize profit. We have a product-market fit problem in the shared micromobility industry. However, this does not mean that companies cannot achieve financial success while designing offerings tailored to the needs of diverse communities. Government nudges can help spur innovation and creative partnerships with nonprofits and community organizations.
A diverse product ecosystem (supported by government funding) is essential to meet the needs of historically underserved communities and address mobility equity issues. The technology adoption curve is a well-documented phenomenon, and while capturing the prime part of the demand curve may seem appealing, the true opportunity lies in catering to the often-overlooked segments of the curve. This means designing for the edge cases and meeting the needs of a diverse range of users. Companies can harvest future consumers by developing products that cater not only to the stereotypical white, 37-year-old male demographic but also to a broader spectrum of communities. Companies risk missing out on a gigantic market — the very market that is needed to catalyze a major shift. With a more visionary approach, companies can change the narrative and unlock untapped markets.
Traditionally, tech providers sell solutions to government agencies, or agencies solicit solutions from providers, with users being the passive recipients of whatever is developed. This approach is flawed, and both parties need to adapt. Technology and product development must remain deeply connected to the needs of users, service providers, and the public sector. To achieve this connection, the private sector must work closely with government agencies to align on equity levers, incentives, and strategies..
One way to flip this approach is the technology companies proactively collaborating and designing products with users to then take to the public sector (or vice versa). By incorporating users earlier and fostering a more collaborative dynamic with users and cities, companies can develop solutions that truly resonate with the diverse needs of communities, paving the way for long-term sustainability and business model strength.
What should the public sector do?
Because shared micromobility is often layered on top of existing transportation systems, there is bound to be friction at the edges — friction around information, infrastructure, and payments. Efforts to integrate open loop, contactless payments and integrate shared micromobility vehicle availability and booking into central booking platforms is just the beginning. A future where you can gain near-immediate access to a micromobility device is only years away, bolstered by efforts led by the California Integrated Travel Project (Cal-ITP).
Government also has a role to create a singular account reference, portal, or account that digitizes information not just related to transit but for every aspect of civic life — a digital “civic persona.” With this digital identity, individuals can quickly register and gain access to any number of shared mobility or civic services. The public sector must lead the charge in creating this digital “civic persona.” In the Netherlands, for example, the DigiD is a digital account that allows citizens to securely access many public services and government websites, including healthcare, education, and more. Here in the United States, cities and states have started partnering with technology companies to develop vaccine passports that can securely store individuals’ health information. We can build upon these initiatives to create a comprehensive digital identity for accessing mobility and civic services.
And finally, shared micromobility should be viewed and designed as essential civic and street infrastructure in cities. Cities should pave the way for physical and business integrations with shared micromobility. Parcel lockers, local cafes and restaurants, advertising, and other B2B/B2G integrations should pair seamlessly with shared micromobility access points. We hear about, and advocate for, mobility hubs often, but points where people access shared micromobility and other critical civic infrastructure can spin off new business models and revenue streams that support long-term financial sustainability for shared micromobility.
What should the private sector do?
To achieve digital integration and secure data management, companies must align their business strategies with customer needs and adopt proven data specifications. This is challenging because oftentimes, business strategy is what drives the final design of the solution, rather than the customer’s needs dictating the strategy. Addressing this challenge requires a two-pronged approach: a technical solution and a rethinking of business strategies, and the order of these actions is important.
Firstly, companies must prioritize the development of technical solutions that enable secure data sharing and integration with public systems. The Mobility and Curb Data Specifications, stewarded by the Open Mobility Foundation, has been and will continue to be a central tool to drive micromobility data sharing and digital policy for access, operations, and curb activity. The private sector should also collaborate on the advancement of open data standards (like MDS and CDS), implementing robust cybersecurity measures, and developing application programming interfaces (APIs) that facilitate seamless communication between different platforms. Secondly, and perhaps more importantly, companies must reevaluate their business strategies to align with customer needs and public interests. This may involve shifting away from proprietary, closed ecosystems and embracing open, interoperable systems that prioritize user experience and public good over short-term profit motives.
One potential solution could be the adoption of an integrated mobility, or “mobility-as-a-service” (MaaS) model, where companies collaborate to offer seamless, multi-modal mobility solutions through a unified platform. This approach would not only enhance the customer experience but also foster greater cooperation and data sharing between mobility providers and public agencies. Integrated mobility is possible with the right conditions. We can look to Germany to see what this could look like. The Jelbi mobile app offers access to all mobility services in Berlin — from journey planning to booking and payment. The one app provides access to a list of mobility partners across over 15 providers of public transit (the bus, train, tram, etc.) e-scooter sharing, e-bike sharing, e-cargo bike sharing, e-moped sharing, car sharing, and taxi services. The app allows employers to provide mobility budgets to employees to use however is most convenient, provides real time traffic and transit information and comparisons of price and duration across different modes to allow for maximum choice. The app also consolidates sign up, license and ID verification, booking, and payment processes into one place.
Ultimately, achieving digital integration and secure data management requires a paradigm shift in the private sector — a shift towards customer-centric business models that prioritize user experience, public interests, and long-term sustainability over short-term profits.
IV. Conclusion
Shared micromobility is an essential part of the urban mobility landscape, with a key role to play in delivering economic, health, access, equity, and climate benefits to communities of all types. There are many actions that both the public and the private sectors can take now that will change the shared micromobility industry’s trajectory to secure it as a core part of the fabric of cities. But to get there, we need to change how we design products and policy, how we think about digital integration, and how we fund shared micromobility.
