Micromobility and sharing electric scooter start-ups rapidly attracts cash and customers

Stakeholders have invested more than $5.7 billion in micromobility start-ups since 2015, with more than 85 percent targeting China. The market has already attracted a strong customer base and has done so roughly two to three times faster than either car sharing or ride hailing. In just a few years, for instance, several micromobility start-ups have amassed valuations that exceed $1 billion.

Two circumstances have driven this accelerated expansion. First, most launches of shared micromobility take place in conducive environments. Urban consumers already value and use solutions for shared mobility, such as car sharing, ridesharing, and e-hailing. What’s more, micromobility appears to make people happy—it’s faster than car-based trips in many situations, and users often say the freedom of being in the fresh air traveling to their destinations while avoiding traffic jams puts a smile on their face. Micromobility is perceived as “intuitive mobility” by design—it’s easy and liberating to buzz through traffic. It’s really quite simple: people feel rejuvenated, and the experience takes them back to their first time riding a bicycle or a scooter.

Favorable economics ensure lower break-even points

Second, the economics of shared micromobility are largely favorable to industry participants. Companies find it much easier to scale up micromobility assets (for example, electric bikes) compared with car-based sharing solutions. For example, the current acquisition costs of an electric scooter are about $400, compared with the thousands of dollars required to purchase a car. Thus, while today’s car-sharing solutions need several years to become economically viable, an outside-in business-case estimate of a leader in shared mobility shows that an e-scooter could break even in less than four months

 

More than a quarter of the world’s population lives in cities with more than one million inhabitants. And vehicle traffic speeds in many of those city centers are now averaging as little as 15 kilometers an hour (9 miles per hour). This can be a frustrating and stressful experience. Micromobility offers some city dwellers an escape from that stress: higher average speeds, less time spent waiting or parking, a lower cost of ownership, and the health benefits of being outdoors.

How big is the market?

How big is it? Micromobility could theoretically encompass all passenger trips of less than 8 kilometers (5 miles), which account for as much as 50 to 60 percent of