After 'The Year Of The Scooter,' The Micromobility Movement is Part Revolution and Part Gold Rush
With scootermania fueling a venture capital trend, micromobility wavers between a genuine opportunity for disruption and overheated hype.
Fewer than 18 months ago, Horace Dediu hosted a small summit during Copenhagen's TechFestival to discuss an idea that he would brand "micromobility." An acolyte of Clayton Christensen and well-known Apple analyst, Dediu had been studying cars and mobility for several years looking for opportunities for "disruption," Christensen's oft-repeated but rarely-understood term for innovations that create new markets and value chains. In his presentation at that first Micromobility Summit, he argued that electric vehicles weighing less than 500 kilograms (about 1,100 pounds) had disruptive potential that he didn't see in electric or autonomous cars.
At almost the exact same time on the other side of the world, a startup called Bird began leaving electric scooters on the streets of Venice, California. Six months later Bird was worth $400 million, 3 months after that it became the fastest startup ever to earn a billion-dollar valuation and by its first birthday the company's shared scooters had served 10 million rides and inspired a rash of competitors. Last week, with micromobility firmly ensconced as the hottest trend in mobility technology, Dediu presided over a coming-out party for the burgeoning sector that drew more than 650 registered attendees.
With an eye toward history, Dediu and his collaborators selected a symbolic location for their first US-based micromobility conference: an Albert Kahn-designed Ford assembly plant built in Richmond, California in 1930, with the profits from the Model T that had just disrupted the mobility technologies of its time. The allusion was not lost on the gathered investors, entrepreneurs, transit planners, urbanists and enthusiasts, who almost universally saw the explosion of electric scooter- and bike-sharing over the previous year as merely the start of a much bigger trend.
Roughly speaking, and with apologies to the outliers, Silicon Valley has launched no fewer than four broad assaults on the century-old primacy of the automobile since the turn of the milennium. Each of these efforts—electric drivetrains, "car sharing," ride-hailing and autonomous vehicles—has been hailed as a long-overdue "disruption" of the privately-owned gas-powered car, only to fall well short of those lofty expectations. The most successful companies in each of these categories may have certainly changed aspects of traditional automobility, like premium market tastes, car rentals and taxis, but with more than 17 million internal combustion car sales in the US last year there are few signs of the promised "disruption"... at least so far.
Over the last year, as autonomous vehicles have become the latest mobility technology trend to start suffering from overheated hype, a fifth front in Silicon Valley's ostensible war on cars has burst into the public consciousness: Dediu's concept of "micromobility." The explosive growth of dockless electric scooter-sharing companies like Bird and Lime in 2018, whose ride counts and private valuations have grown at a rate that eclipses previous tech sector records, has made small, short-range electric vehicles the hot new trend for high-tech investors. This growth is what attracted many of the numerous entrepreneurs and venture capitalists who attended the Micromobility California Conference, bringing a Silicon Valley goldrush vibe to a confab that was otherwise rooted in a surprisingly sober view of the mobility landscape.
Dediu's keynote brought these two strains of the micromobility movement together, demonstrating both a real opportunity to recreate urban landscapes around vehicles more suited to the trips we actually take and an opportunity to attract huge amounts of investment capital for the next wave of high-growth mobility technology startups. In a relentlessly data-driven presentation, Dediu showed that 90% of one-way US car trips are shorter than 20 miles and that the average NY taxi trip is just 2.6 miles, making these journeys far more suited to micromobility devices than the two-ton cars that we use for them. Again and again his charts showed the same rough distribution: a steep curve peaking early and then rapidly fading to a long tail. Even the most committed scooter-hater would have to admit that we could, and should, be using far lighter and more-efficient vehicles for our 90% use cases rather than vehicles purchased with our rare long-distance trips in mind.
The contingent of urbanists, city transit planners and the companies working with them see in Dediu's data an opportunity to reshape American cities around vehicles that are far more suited to them. By replacing cars with smaller, more efficient micromobility devices, these optimists see a chance to reclaim cities developed for cars into cleaner and more human-friendly places, returning streets to their vibrant pre-car status as the "third place" (a social meeting space that is neither the home or the workplace) that is now relegated by cars to places like Starbucks. But for this group, micromobility is just one piece of the puzzle: they believe that, in the words of Alex Roy, "all mobility leads to transit." By integrating scooters and e-bikes into existing transit ecosystems, they can serve as "last mile" solutions that strengthen traditional public transit and essentially become part of a city's broader mobility infrastructure. Building on Roy's idea of "universal basic mobility," these humble devices show profound potential to achieve the now-cliched visions of both "disruption" as well as the democratization of mobility for the millions left behind by car-based mobility.
This sober and focused group of micromobility enthusiasts exists somewhat uneasily alongside the runaway hype and unicorn visions that come along with any Silicon Valley goldrush. For every data-driven urbanist at the Micromobility California Conference there was at least one entrepreneur or investor who seemed to be motivated by the massive financial opportunity, and would spout lines calculated to capitalize on the hype unleashed by micromobility's stunning growth. From companies presenting devices that seemed like absurd approaches to Dediu's opportunity, like a "water bike" that was presented as a way to turn urban waterways into bike lanes, to companies trying to reinvigorate existing technologies with lofty ambitions, like the self-balancing electric unicycle company CEO who called the devices "a first step toward transhumanism," there were nearly as many moments that resembled an episode of "Silicon Valley" satire as there were rational explorations of the very real opportunities for micromobility-based disruption.
This odd mix of the sublime and the absurd made the event something of a Rorschach Test for observers, striking some as the start of a world-changing movement and others as the peak of yet another tech-sector trend that will ultimately collapse under the weight of its pretensions. And to some extent, both views are accurate: yes, all the opportunities to create new industries and value chains while making the urbanizing world a better place are very real, but at the same time the rush of capital flowing into all things micromobility all but ensure an inevitable shakeout. Even the most hype-happy companies had to admit, with varying degrees of candor, that the "year of the scooter" saw growth outstrip the quality of the products in shared scooter fleets and the ability to deliver sustainable unit economics. In the words of one scooter-sector entrepreneur, "profits are like a deferred goal right now" as companies chase the insane growth that keeps venture capitalists shoveling money at their companies. And even the biggest scooter optimists admit that pursuing growth at all costs has brought scooter companies into conflict with some of the cities that they are ostensibly supposed to be saving from the car, and that copying Uber's "ask forgiveness rather than permission" approach has helped fuel a backlash.
With Bird's runaway valuation suddenly hitting a speedbump as investors realize that the pursuit of growth has outrun the quality of its products and its operational fitness, we're seeing a phenomenon that should worry the entire mobility technology sector: the "hype cycle" that every hot startup and sector has gone through is accelerating and becoming shorter. During the upswing, like "the year of the scooter," the compressed growth cycle of companies like Bird makes it all the more attractive, but the speed at which it has hit its operational limits and regulatory walls makes it all the more concerning. Having already seen a boom-bust cycle in China's shared bicycle market, where booming growth led to a staggering crash that has been compared to fruit fly populations, the extreme growth and short hype cycle of scooter sharing raises the possibility that next year's Micromobility California Conference could become more like the slightly hungover autonomous vehicle conferences of 2018.
Still, it's important to come back to the data and remember that all the trappings of a "Silicon Valley" episode at this year's conference are a product not of micromobility itself, but of the trend-chasing venture capital and startup ecosystem that has created booms and busts in countless other technology segments. Indeed, the "year of the scooter" and the gold rush vibe at Dediu's conference is not so much the product of a global trend, but of the car-obsessed US market discovering something that has either been growing for some time in places like Europe or is the status quo in developing markets where cars are still broadly unaffordable. Even in the US, marginalized pro-bicycle activists have been making all the arguments about urbanism and matching modes with real-world use that were made at the conference.
It will be fascinating to see what happens in the micromobility sector between now and next year's conference. Will the broad, data-based opportunity that Dediu and others see continue to grow deployments of scooters and e-bikes, or will the increasingly-compressed venture capital trend cause more operational struggles and cause over-inflated expectations around the micromobility movement to crash? In the aftermath of the "year of scooter" both possibilities seem equally likely.