Micro-mobility technology encompasses a wide range of transportation options that are lightweight and afford short trips. Not only is this technology eco-friendly, it is also affordable and provides accessibility to people who would not be able to use regular modes of transportation. The growth of micro-mobility is a reflection of the growing trend of sustainable living. There are several reasons why this trend is becoming popular. Some of the reasons include the increase in environmental awareness, the development of
new transportation technologies, and the increase in urbanisation. Micro-mobility has gained a lot of attention in the recent past, with companies such as Uber, Lyft and Amazon offering their services in this sector.
The global micro-mobility market was estimated at USD 42 billion in 2021 as per Straits Research. European Transport Research shows that the market value of micro-mobility will reach USD 41 billion by 2028.
Global micro-mobility sharing has shown outstanding growth in the past years. The Shanghai government plans on increasing the shared micro-mobility market due to heavy traffic in the urban areas. Factors such as market size, growth, share, growth restraints, technology innovations, stocks, market analysis, values, and market trends are essential parameters for consideration to excel in the global micro-mobility sharing market. Statistics show over 10 million customers of shared mobility in Shanghai, including 1.5 million bikes shared between more than one individual.
The 3 Major Trends Driving the Market for Shared Micro-Mobility in 2022 & Why They Matter
Traffic congestion in urban areas triumphs the growth of the global shared micro-mobility market as it affects individuals and the environment alike. It promotes the use of bikes for covering short and long miles of distance. If the traffic congestion remains unaccounted, it will pose destructive environmental threats shortly as the pollution in China costs £1.5 million to the government. Similarly, to gain speedy mobility in trafficking areas, an alternative to heavy automobiles is requisite, which can be made possible through the healthy nurture of a shared micro-mobility market. To foster this trend, shared micro-mobility firms raised USD 1 billion in 2020. The USA and Europe started shared micro-mobility to adapt to this market trend for tourism and intra-city movements.
The bike and scooter sharing booms in China and the United States, changing the trends in the town. Bird and Lime, a scooter manufacturing company founded in 2017, working in the United States, invested USD 0.8 billion in scooter-sharing following the trend of shared micro-mobility in the market. Uber in Pakistan has integrated bikes in 55+ cities of the country to help people. Uber Technologies Inc., San Francisco, California, the U.S., has collaborated with Lime USA to encourage micro-mobility in the world. Uber aims to transfer jump electric bikes and scooters to lime; the two companies formerly agreed to rent scooters and bikes to the people to grow this market.
Long Commute in Less Time
Short distances over less than 5 km prove to be the primary growth driver for micro-mobility. Heavy vehicles make it difficult to cut long distances in a short time, thereby invoking micro-mobility to show its power. Europe has the highest number of micro-mobility startups with USD 75 million funding. Private and corporate investors have reached over USD 5.7 billion in scooter and bikes startups as of 2018.
However, only a few generate the desired revenue; others still struggle to set up this trend. Scooter sharing startups were settled in San Francisco, the U.S., and eventually grew to other cities of the USA, Washington D.C, Florida, Texas, and Colorado. Three scooter startups work in Barcelona, Europe. India has also started growing in this industry, with Yugo contributing to the growth in this industry.
Although the COVID-19 pandemic has negatively impacted the industry, electric vehicles are ready to make a significant space in the automotive world. Electric technologies have taken the world by storm in the past few years. Electrical automobiles are found in excessive cities worldwide. With the introduction of e-bikes, electric bicycles, e-scooters, pedelecs to the public sharing, the market value of light vehicles has increased.
GPS tracking, smart card identification, stationless systems, and multimodal platforms have increased the growth by winning the trust of maximum people that opt to buy micro vehicles.
Challenges Posed in the Growth of Micro-Mobility Market
Lack of Favorable Infrastructure
An increase in the growth of electric vehicles spurs the need for a proper, trendy infrastructure to meet user requirements. The number of on-road electric vehicles in the U.S. is expected to rise to 25 million by 2030. The problem stems from the setup of charging stations in the cities. There is a need for enormous charging stations in different cities worldwide to charge electric vehicles. A shortage of charging stations can pose a threat to the electric automotive industry.
Varying Regulatory Framework
Due to the distinctive nature of cities worldwide, the structure and demand for electric vehicles vary, hindering the market growth. Agents, infrastructure, vehicle operators, and charging plug-ins are the basic requirements for electric vehicles. However, every country does not have the same revenue and resources to entertain a proper infrastructure of electric vehicles for shared micro-mobility.
Theft of Vehicles
A survey showed that due to the phone-operative nature of electric vehicles, 36% of riders could not lock their bikes because their phones had died or faced other issues. The theft rate of rented vehicles is high. Gobee bike shut down its operations in Europe due to excessive bike losses. Many companies have announced to improve their GPS tracking systems in vehicles. It will, however, require a lot of time and improvements.
Strict Government Regulations
Europe has the highest share in the market, constituting 50% of the global market, with Spain being its largest market, comprising Barcelona, Valencia, and Madrid as the growing regions. India contributes about 20% to this market. Due to problems, such as stealing and shoplifting, the government has posed restrictions to take e-vehicles to the roads. Large fuel agencies would never want the electric auto industry to grow. Diesel and fuel are the primary sources of revenue for a country, so there are profound challenges for the electric automotive industries worldwide.
The Rebalancing Cost
The global scooter market exceeded 100,000 units in 2020 at different prices worldwide. It is expected to grow to 700,000 units by 2025 at a compound annual growth rate of 46%. As electric vehicles comprise many needs, the varying costs in different countries might cause a problem for the major industries in delivering these vehicles globally.
Micro-mobility Technology Trends for Product and Marketing Managers to note:
The growth of 5G networks and the Internet of Things (IoT) has revolutionized the industry with the perks of high band connectivity, better navigation services, map updates, improved security, traffic updates, fleet monitoring, entertainment opportunities, and more. These vehicles now come with software-driven features that increase customer interest in the market. In August 2020, Saic Motor Corp and Guangxi Automobile group claimed to have sold more than 16000 electric vehicles.
The e-bikes contribute 35% of the overall bike fleet, whereby China makes 98% of the e-bikes globally.
The introduction of new battery technologies can reduce the rebalancing cost. Didi’s Qingjue Bikes, based in China, Beijing, has partnered with battery manufacturer Phylion to supply 1 million units of lithium batteries.
McKinsey & Company conducted a global survey, which states that the number of people interested in shared mobility has increased by 12%. HelloBike, Meituan Bike, and Qingju Bike are the largest bike-sharing companies in China. China’s contribution plays a crucial role in overall bike-sharing in Asia-Pacific.
Softbank-backed Ola in India announced the launch of its electric scooter on August 15. The founder of this company, Bhavish Aggarwal, claims to have put major effort into the making of this exceptional electric scooter. The company claims to be the largest scooter factory worldwide.
The electric-micro vehicles, if properly integrated, can create a significant place in the rural areas as well. It is due to the pressing need for low-cost transportation in these areas. The factors associated with the cost of an e-scooter include charging, maintenance, insurance, operations, payment processing fees, and depreciation. The challenge is for the companies to keep a healthy balance between the selling prices and manufacturing costs, keeping in view customer satisfaction.
PowerBox is an easy-to-use battery-swapping station built in Europe that allows the replacement of old batteries with charged batteries. Electric vehicles can open the doors for new markets globally.
E-bikes are constructed for people aged 16 years or above. A few countries, such as France, allow 12-years-old users to have licenses. It will increase the helmet manufacturing markets as well.
Micro-mobility growth opens new vistas for the concerned operators. Initially, the e-bikes operators in Europe were making per-minute pricing, now per hour, per day, and per month charges have been introduced by the operators to make sure that they run steady businesses of their own.
The U.S. first introduced dockless electric bikes that are advantageous over docked e-bikes as these bikes do not require physical docks for parking. A survey shows that about 70% of Americans keep a positive perspective about e-bikes.
Market Developments Expected in the Upcoming Years
Cities, being the flooded areas of traffic, are expected to show significant growth shortly. The infrastructure expansion will lead to more employment opportunities for people in the urban areas.
Fenix, based in the U.A.E, is ready to foster the future micro-mobility to the Middle East and North Africa. The company has also introduced a mobile application to book rides across the city.
Integration of electric mobility with MaaS (Mobility as a Service) and Mobility on Demand (MOD) is necessary to meet the local needs and first and last-mile connectivity.
In Europe, vehicle parking fees were increased by the operators. Startup companies require more capital to adapt to changing technologies. A new, well-trained staff is required with the introduction of the replaceable battery technology. Maintenance and service markets can find new ways to flourish with the advancement of technology. Gen Z can get more attracted to e-bikes if the cost is affordable for them and can play a vital role in nurturing shared micro-mobility globally.
About 60% of the movements in the United States are five miles or less that can be covered using a bike instead of a car. Increasing collaboration between tech providers and cities to understand micro-mobility patterns is likely to tackle the heavy traffic in rush hours.
Micro-mobility has the potential to change the way we live and work by eliminating environmental concerns and making life easier during heavy traffic hours. The pressing need of the moment is for governments and enterprises to join hands and bring better reforms to introduce this technology to this world. As you read this article, subscribe to our newsletters to stay updated on the latest developments!