Future of Micro Mobility: What We Can Expect

What are micromobility vehicles?

Micro mobility describes the growing trend of small, lightweight vehicles (generally operating at speeds below 15 mph or 25km/hr) that users employ to seamlessly navigate highly populated urban areas.

These vehicles are specifically designed for short trips and thus do not rely on internal combustion engines (though many are powered by electric motors). Such vehicles include bicycles, e-bikes, and electric scooters, as well as shared fleets of such vehicles.

Unlike rickshaws, tuk tuks, or other small vehicles, these micromobile vehicles are operated by the users personally.

What are the advantages of micromobility vehicles?

As cities become more densely populated, traffic has increased exponentially. Traditional means of transport cannot address the growing population’s needs. According to the 2019 INRIX National Traffic Scorecard, Americans lose an average of 99 hours per year due to traffic congestion. Financially speaking, that translates to losses of almost $1400 per driver (or roughly $88 billion nationally).

The rise of sharing platforms for electric bikes and scooters is one response to the traffic congestion issue. Another is the manufacture of electric vehicles with embedded sensors that can detect traffic and propose alternative routes. Such sensors and apps can also encourage people to use public transit for longer trips.

In short, the future of micromobility has the potential to:

• • Reduce traffic congestion

• • Save commuters time

• • Lower the cost of transportation

• • Increase access to existing public transportation

• • Reduce carbon emissions & noise pollution
    
    

Are electric scooters really environmentally friendly?

Though the micromobility sector is growing rapidly, there are still a number of issues that need to be addressed. Primary among these is the question of sustainability. 

Some dispute the “greenness” of e-scooter rentals. According to one 2019 study, e-scooters (202 grams) produce more CO₂ than electric mopeds (119 grams), electric bicycles (40 grams), bicycles (8 grams), and even diesel buses (82 grams) throughout their lifespan per rider. 

Meanwhile, a 2020 study claims that e-scooters produce 13,000 metric tons of greenhouse gases. To put it in perspective, that’s the equivalent of what a small town could produce.

Despite all the disputes, some e-scooter companies are focused on reducing the emissions of manufacturing and operational emissions, which make up 93% of the carbon footprint of e-scooter rental.

Who is at the Forefront?

The COVID-19 pandemic significantly slowed investment in this sector. Scooter startups like Bird and Lime initiated upwards of $2B worth of VC investments initially. VCs spent an additional $5B to help startups build their infrastructure (i.e. charging stations) as well as the scooters themselves. 

Yet, after the pandemic, micromobility startup valuations are going down. For instance, Bird is trading as a penny stock. Bird would need to increase its $135M market cap by 2,000% to meet its 2019 valuation of $2.9B. On the brighter side, Bird’s revenue has increased 48% year-over-year.

Meanwhile, in July of 2022, Bolt Mobility – which has publicly raised $40.2 million – seemingly abandoned all its operations in the U.S. After weeks of silence, it was discovered that the company failed to provide both updated insurance and pay huge annual permit fees to cities across the country.

The future of micromobility

While micromobility providers may appear to be struggling, consumer surveys show that the future of micromobility will see increased demand for such solutions and longer average trips.

Simultaneously, cities around the world are supporting initiatives to make the urban landscape more bike-friendly. According to a McKinsey survey, consumers willing to use micromobility on a regular basis will increase by 9% for private micromobility solutions and by 12% for shared solutions as compared to pre-crisis levels.