COVID-19: What's in Store for Micro-Mobility Providers

Due to COVID-19, micro-mobility sharing providers are having to pause and reduce operations across the globe. Bird and Lime, two of the largest sharing service providers around the world (operating in 80 and 120 cities respectively), have paused their services to reduce the risk of spreading the virus. Other providers, however, such as Citi Bike NYC and Next Bike in the United Kingdom, are continuing to operate their services while ensuring that they are putting relevant health and safety procedures in place to ensure that the vehicles are being disinfected in between use when possible.

Citi Bike claims to have seen a 67% increase in the number of riders in March 2020 in comparison to the same month last year, when no virus was present. It is likely the public is utilizing the sharing systems to ensure they’re able to get the daily exercise that governments allow while encouraging people to stay at home whenever possible.

For the larger service providers, such as Bird and Lime, having to halt services has also seen operators make drastic expenditure cuts by cutting their workforces. Bird has reported a significant staff reduction (30%), which is necessary for these service providers to stay financially afloat as the global pandemic continues to take its toll. While the larger service providers within the market are halting their services, smaller providers are trying new methods to be able to minimize the risk of the virus spreading while continuing to offer their services. Voi and Wheels, both e-scooter and e-bike sharing service providers, are offering self-cleaning devices and including gloves and sanitizing equipment with their vehicles to maximize disinfection without having to employ more staff.

The micro-mobility market will see a drastic change in the manner that the available vehicles are being used. With many more companies enabling remote working and more of the public working from home in general, it is less likely that operators will see a spike of usage in rush hour periods. Fewer “last-mile” journeys will be made due to the work-from-home ethic, and more people will be using the sharing systems, the standard push bike more so, to get some form of exercise. This will likely mean rides will be longer in time than average. It is also likely that, especially in cities that have service operators up and running, exercise will be the reason for an increase in use, as many people may not want to purchase their own push bike due to it being unlikely that they will opt to ride a bike for exercise purposes once normality returns and places such as gyms reopen.

ABI Research’s recent Smart Bikes, Scooters, and Pedelecs: Expansion of Two Wheel Shared Transportation Market (AN-5271) Application Analysis Report included forecast data in regard to the four main micro-mobility transportation methods and forecast that the market will reach a total installed base of 50 million by 2026. With the larger service operators that would be expected to rollout significantly larger fleets in the future halting their services, it is likely that any new projects that were expected to take place this year have also halted. To prevent a loss of assets, it is recommended that the service operators that are halting their services have employees collect their vehicles to be stored away in their depots. In the past, large service providers have had problems with the theft and vandalism of their vehicles; therefore, to prevent this happening and minimize future expenditure to replace vehicles unnecessarily, sending out workers to collect the now unused vehicles for storage would be a wise move.

While not all providers are halting their services, it is unlikely that they will be planning rollouts of new fleets to take place in the near future. Currently, with social distancing regulations in place, offering larger fleets will not be a viable business decision to make; as with a large number of cities requiring service operators to run with a dockless or hybrid infrastructure business model, larger fleets will not be possible due to users being required to keep their distances from one another. Additionally, although the vehicles are relatively cheap for operators to purchase—depending on the vehicle they offer within their fleets—it wouldn’t be financially sane to increase expenditure by rolling out new fleets. Though there have been no complete restrictions put in place to prevent these services from being provided to the public, if a ban on sharing services is put in place, it will be very likely that many providers may not survive. Therefore, saving their capital and running their current fleets would be the best approach.

For smaller firms that are currently still running their services, ensuring that cleaning practices are maintained is crucial. If service operators are able to ensure their users that their service is safe to use with little risk of possibly spreading the virus, it will likely mean that customers will continue to use their service, which could help them survive this pandemic and become more profitable in the long run. With the two largest service operators halting their services, there will be a larger flock of users looking for alternative operators to ride with. It would be ideal for the up and running service operators to review their current business models and adapt to make them more competitive. Having riders join due to Bird and Lime halting their services gives the smaller operators the ability to keep these riders in the long erm, rather than just until things go back to “normal.”

Operators still continuing to run their services may want to reconsider their pricing options or, if they have not already done so, implement a service plan for loyal ridership. With the use of exercise likely to be one of the most growing reasons to ride these shared vehicles, and therefore elongating journeys, this should be considered with these possible strategies. Having service plans, like Lime has in place, for example, reduces the cost for loyal riders by minimizing the unlocking fee and offering reduced rates for the cost per minute used after a specific amount of time. Many providers offer their service to unlock the vehicle for a fee, then offer a free period of riding, and then continue to charge for every minute in use after this free period has ended. Not only will adapting the prices for the COVID-19 period possibly increase ridership—not everyone is able to work and many are without much of a disposable income, so a cheaper price could entice more of the public—it could also create a more loyal rider base and therefore continue to allow smaller companies to survive this pandemic.