Shared Micromobility: Impact on Climate Change & Sustainable Development by Renat Lokomet

To address the rapidly growing issues of climate change and greenhouse gas emissions, and to promote sustainable development, governments and businesses have introduced numerous strategies and policies. A prominent global trend tackling these issues is the rise of shared micromobility solutions, which have become ubiquitous in major cities. Such solutions are available in the form of rentable e-scooters, e-bikes and e-mopeds.  

But is it really a big deal? Uncover the data, meet the players driving this change, and explore the implications in our latest deep dive with our venture partner Renat Lokomet in his article.  

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The Rise of Green Energy Transportation and Micromobility in Europe

With the need for more sustainable and greener solutions, transportation powered by renewable energy has become increasingly prevalent. Over the past decade, the rise of shared micromobility globally, and more specifically, across Europe, has been staggering.

Since 2017, and the inception of both Bird and Lime, shared micromobility e-vehicles have seen remarkable success. In 2023, there are countless rentable bike and scooter operators across Europe, including Tier, Bolt, Dott, Voi, Wind, Human Forest, Lime, etc. Major cities where these solutions are abundant such as London, have multiple options to choose from, with both dockless scooters and bikes by startups, as well as government-funded Santander bikes available from docking stations all across the capital. 

The trend towards micromobility is ubiquitous enough that established players can thrive without forcing out new startups, allowing companies like Zelectra and Skok to grow, especially in regions not yet dominated by multiple major players. There are also several software developers such as ATOM Mobility who have developed solutions for micromobility services to make fleet operations faster and more efficient. All of these human-powered and all-electric options reduce carbon emissions dramatically, offering an alternative choice of transportation to private and public transport.

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The Fall in the Popularity of Ownership

It’s worth noting that those most likely to use micromobility solutions are those in generations much less concerned with ownership. Last 3 years new car registrations in Europe declining and in 2023 it was minus 5% in comparison to 2021, primarily due to GenZ’s shunning of purchasing vehicles outright. Obvious economic considerations such as rising living costs, employment instability and higher student loan debt, mean younger generations are prioritising their money in different ways, opting to spend away from outright ownership, among other big-ticket purchases. GenZ and Millenials in particular, generally prefer flexibility, and micromobility options offer that in multiple ways.

Possessing a greater thirst for exploration, younger generations can spend money more wisely on international travel, saving thousands on both the purchase itself and having that money sat in a vehicle they won’t use as often. This flexibility also extends to day-to-day living, with the ability to travel anywhere without the worry of parking, especially in major cities like London, Paris, Berlin, Hamburg and Munich. Even for longer journeys, many people are still rejecting purchasing cars, and choosing to rent cars, specifically electric cars via services like OX Drive, due to the reduced running costs, as well as environmental consciousness. Millennials are recognised as preferring a ‘sharing economy’ where borrowing assets like vehicles is a much more appealing option.

For an age range of people who are extremely technologically savvy having grown up with it, the option to simply connect with transportation when needed via smartphone apps, rather than the burden of ownership or maintenance, is a much more preferable one. This is why, for so many, shared micromobility solutions are such an appealing option.

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Last Mile Connectivity

Rentable scooters and bikes also fill a vital gap for commuters, connecting people from transit stations and bus stops to their final destinations. This ‘last-mile connectivity’ and alternative for shorter journeys, has the potential to replace 70% of car trips. In the UK, 50% of all car journeys are fewer than 5 miles, and in urban environments, nearly 70% are fewer than 3 miles. Currently, it is estimated that half of the current e-scooter journeys are replacing what would have previously been a car journey. Shifting people away from cars, and public transportation, towards scooters and bikes for short trips, helps to alleviate traffic congestion and reduce overall energy consumption.

When considering the urban metropolis of Paris, and its 13M residents and 30M visitors annually, according to the Fraunhofer Institute for Systems and Innovation, the reduction in greenhouse gases thanks to e-scooters is estimated to reach 66 tonnes of CO2 each year. However, not all Municipalities are welcoming micromobility, for example in 2023 Paris tries to ban shared micromobility in the city, but it is unlikely that it could stay that way forever due to its overwhelming popularity among passengers. 

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The Profitability of Flexibility and Convenience

Realising the appetite for overall flexibility and convenience, many micromobility startups offer much more than just dockless scooter or bike rentals, and for some, that wasn’t their starting product. For example, both Bolt and Uber started out as ride-hailing (taxi) companies and have both moved into the micromobility space with scooters and/or bikes, and both also operate food delivery services, via Bolt Food and Uber Eats respectively.

“The long-term future of micromobility will depend on the extent to which it becomes integrated into broader services. I think the idea that we have an app on our phone for each individual service is not going to have a long shelf life,” says Professor Tim Schwanen, director of the Transport Studies Unit at the University of Oxford.

Nowhere is this more true, than in the South-East Asian ‘Superapp’ Grab which, just like Uber and Bolt, started out as a ride-hailing service, but is now also a micromobility and vehicle rental operator, food and grocery delivery service, parcel delivery service and most significantly, an online payments service. Grab has taken the subcontinent by storm and is now available in 8 countries. Similarly, Gojek in Indonesia offers more than booking motorcycle taxis which is how they started - they now offer medicine and food delivery. Offering so many services for users is highly convenient, providing more flexibility to modern lifestyles. Other micromobility technologies are also on the rise in Asia, an example is a prominent micromobility startup Oyika. This Singaporean company is focused on accelerating the development of battery swapping infrastructure in the region. Their advanced technology solves the biggest issue faced by EV users by providing them with a convenient charging solution.

Micromobility as a service (MaaS) companies can utilise consumer behaviour data to evaluate who would benefit from additional services such as food and grocery deliveries which can be directly advertised to users.

What is becoming clear is that providing shared emission-free transportation options, benefits the environment, users and, if operated strategically, the shareholders too. While offering greater flexibility to consumers is key, the most flexible MaaS companies will win big, by offering low-cost, cheaper vehicles, tech advancements and more services available in the same application. The giant industry potential coupled with consumer behaviour changes allow for new tech-advanced companies to challenge the existing leaders and improve the micromobility industry as a whole.