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Thursday, Aug 11, 2022

Micromobility Companies Are Ready to Roll Again

Going into 2020, the micromobility industry was already experiencing some growing pains.

Millions of curious customers were taking spins on the sharable electric scooters and other vehicles deployed around cities worldwide by companies such as Bird Rides Inc. and Neutron Holdings Inc. (doing business as Lime).

But cities were pushing back on these programs due to concerns about safety and sidewalk clutter while investors had begun to raise concerns about the costs of distributing vehicles and keeping them operational long enough to generate a profit.

Then, with the onset of the Covid-19 pandemic, these small vehicles began to disappear altogether.

West Hollywood-based Wheels Labs Inc. temporarily shut down its electric bike sharing service while Lime and Bird pulled scooters from many cities. It was a major blow to the industry.

Santa Monica-based Bird reportedly laid off nearly one-third of its workforce at the end of March 2020, with Lime and Uber Technologies Inc. (the former owner of Jump Bikes) also making major staffing cuts. Wheels had already undertaken a round of layoffs in February.

Some observers predicted that the industry would not survive the ravages of the pandemic. A year later, new challenges have emerged, but local micromobility companies say they are optimistic about what the future holds.

In one of the clearest signs yet that the industry is ready for a restart, Bird recently revealed plans to go public in the third quarter through a special purpose acquisition company, or SPAC, that would value the company at $2.3 billion.

“When you’re working for a startup, you always have to be quick on your feet and adapt to any challenges,” said Paul Vizcaino, chief development officer at Wheels. “We’re just built that way.”

After temporarily suspending operations last year, Wheels worked with NanoTouch Materials to install self-cleaning handlebars on its e-bikes to mitigate risk of virus transmission between riders. The company’s helmets, which are included in rentals, were wrapped in biodegradable liners, Vizcaino said.

“Wherever the bikes were being touched, we wanted to make sure it was as clean as possible,” he said.

Wheels also rolled out a new rental program tailored to more frequent riders. Users of the company’s private program can order a bike delivered to their home — or pick one up at a local service center — rather than tracking one down in their neighborhood. The new rental arrangement also allows riders to keep vehicles for up to a month at a time.

Shifting demands

Bird also altered its vehicle deployment strategy to account for the shifting demands of riders.

Rebecca Hahn, chief corporate social responsibility officer at Bird, said the company observed that customers began taking longer rides on the scooters during the pandemic.

“We saw people usi
ng scooters for their entire trip, as opposed to just the last or first mile,” Hahn said in an email. “We adjusted our fleets to make sure that we had the right number of vehicles available in the areas where people were using scooters in that way.”

With the travel industry at a standstill, use of the vehicles was dominated by local riders rather than curious tourists, Hahn said.

Vizcaino said as the public learned more about how Covid-19 transmission occurs, micromobility transportation options started to become more appealing.

“People are looking for open-air, solo-rider opportunities to get to and from their destinations,” he said.

A report released last year by McKinsey & Co. noted that the number of consumers willing to use micromobility transportation options on a regular basis had increased slightly compared to pre-pandemic levels.

According to Bird, the company’s scooters have attracted more than 3 million new riders since March 2020. Hahn said limited road closures and street safety measures implemented by many cities over the last year may have encouraged first-time riders and customers making “essential trips around their neighborhoods.”

Supply shortages

Ely Khakshouri, founder and chief executive of Vernon-based bicycle manufacturer Xander Bicycle Corp. (doing business as Retrospec), said demand from customers for the company’s products shot up as cities went into lockdown and many people found themselves stuck at home for most of the day.

“Our company for the last decade has spent so much time advocating for analog recreation and entertainment — anything that encourages people to get away from screens,” Khakshouri said. “During a time when everything feels so digital-centric, we’re really happy to offer that way for people to disconnect.”

Unfortunately, rising interest in micromobility options like scooters and bicycles has been accompanied by severe supply shortages stemming from manufacturing disruptions and shipping backups impacting industries worldwide.

Khakshouri said keeping bicycles in stock has been a major challenge that’s prevented the company from fully capitalizing on high levels of rider enthusiasm.

“The supply chain issues are a real challenge,” he said. “We have a lot of catching up to do … it’s not just about getting enough bikes here to get them out to all the people who want them. We have to fill the shelves.”

Pasadena-based Urban Electric Co. (doing business as Urb-E) has also been dealing with supply chain challenges, said Chief Executive Charles Jolley.

“It’s a nightmare,” Jolley said. “We have shortages of electronics, gears, brakes, you name it. There’s huge wait times, so we need to place orders way in advance. And now shipping is becoming a big issue.”

Urb-E recently pivoted its business away from the manufacture and distribution of collapsible electric scooters and is focused on developing an electronic bike-based delivery service that’s now up and running in New York.

Jolley said the company has enough supplies on hand to continue the planned rollout of the service in Santa Monica later this year.

“What we had to do is place a lot of orders way in advance,” he said. “We basically ordered for the entire year in November.”

In spite of these logistical challenges, Jolley said demand for Urb-E’s delivery bikes is “skyrocketing” amid an ecommerce boom.

“There’s been a huge increase in demand from consumers, and it’s really increasing the realization of companies that they can’t achieve the kind of density of deliveries they would want with cars,” Jolley said.

Advanced batteries

Helping companies like Urb-E along are technological advancements in the design of electric bikes that allow batteries to be quickly swapped out — eliminating the need for vehicles to sit idle while charging.

Jolley said Urb-E is developing a charging facility in Manhattan where batteries can be charged and deployed to the facilities at which bikes are stored.

Micromobility industry consultant Alexandre Gauquelin said swappable batteries have allowed bike and scooter companies to improve the “economical and environmental sustainability” of their business models.

Workers tasked with maintaining vehicles no longer have to drive around in trucks, collecting devices and bringing them to a charging locations. Soon, Gauquelin said, riders themselves might even be able to change out batteries at facilities within a vehicle’s operation area. That would further drive down operating costs for companies deploying bikes and scooters.

Wheels has already moved to a swappable battery system, though Bird continues to use batteries that are not easily removed. The company, however, boasts that its batteries are durable and long-lasting enough to be reused once the body of a scooter is no longer usable.

Gauquelin also pointed out that recent design changes have improved the durability of devices deployed by companies like Bird, which once struggled to prevent vandals from tampering with the brake systems of its vehicles — or simply snapping them in half and tossing them in the nearest dumpster.

Hahn said the company’s new Bird Two devices, now being rolled out in Los Angeles and other U.S. cities, are built for longevity. The aluminum-framed vehicle is “designed and verified by an external lab to withstand 60,000 curbside impacts,” said Hahn.

More durable and cost-effective vehicles could help micromobility companies in Los Angeles and beyond survive through supply shortages and the economic impacts of the pandemic. According to the McKinsey report, early signs point to a “U-shaped recovery” for the industry.

Vizcaino said further technological advances will drive the industry ahead.
“We’re always looking to innovate and be at the forefront of safety, sustainability (and) accessibility,” he said. “Whatever we do as a company, those are the pillars of where we spend our time and effort.”


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