This was a tumultuous year for micromobility, both in the shared and private realms. The year 2022 brought with it an increase in the sale of electric bikes, the adoption of smarter e-scooters that can detect bad driving behavior, and the drying up of venture capital funds for scooter and bike companies.
We also saw further consolidation in the shared micromobility industry, electric bikes and e-mopeds beginning to make a dent in delivery and logistics networks, and some promising policy initiatives that could move people out of cars and into factors of smaller shape.
With 2022 in our rear view mirror, we can now see how technology, policy, and public sentiment will drive the micromobility trends of 2023.
E-bike companies will begin to join public markets
The electric bike manufacturer Sondors filed for an initial public offering in October 2022. If and when the company goes public, it will be the first electric bike company in the US to do so. Could other e-bike manufacturers follow suit in 2023 and beyond?
“Public markets are less about the biggest and baddest technology and more about something that is perhaps simpler and has been shown to generate profit”said James Gross, co-founder of Micromobility Industries. “Companies that are publicly traded right now are companies that can show cash flow.”
Sondor S-1 it showed a company that was operating at a net loss, but has the potential to become profitable. And unlike many of the EV companies that have gone public through special-purpose acquisition mergers in recent years, Sondors is already building and delivering vehicles.
Gross further speculated that Rad Power Bikes could be next door to public markets. In November, founder Mike Radenbaugh stepped down from his role as CEO and took over as chairman, placing the former president of Sony Electronics and Dyson America in his former role. Gross said it was a "very strong test point toward a public market offering."
More bike companies in public markets could help push the narrative about electric bikes selling better than electric cars in America.
“Part of being public is the professionalization of the category and the reports to show that there are more of these things on the market, maybe we should pay attention to that,” Gross said.
Further consolidation in the shared micromobility space
2022 was a year and a half for the shared micromobility space and it started with at least one major acquisition.
Following the acquisitions of Wind Mobility's Italian subsidiary and bike-sharing startup Nextbike, Germany-based Tier Mobility bought Spin from Ford Motor in March. With each purchase, Tier's market reach in the shared micromobility landscape increased. Another notable purchase in 2022 was Helbiz's October purchase of Wheels.
Beyond mergers and acquisitions, consolidation has occurred for those who win by default or for those who have stayed. Bolt Mobility gave up some ground this year after it disappeared, and Bird has had to tighten its belt significantly enough to withdraw from several dozen US markets, as well as Sweden, Germany and Norway.
At the same time, we've seen from Bird and Helbiz, the two public micromobility companies, that this is a tough market to turn a profit in. And Tier, despite making a strong push in the US through Spin, actually decided to pull out of several US markets because they weren't profitable.
So who will survive? The group is getting smaller, but we believe there is still room for cuts. Only a few operators will remain by the end of 2023, and they will be very entrenched in their markets.
Shared companies will force cities to adopt better regulation
One of the main reasons shared micromobility companies are leaving is because it is an unsustainable business model.. Certainly there are ways to reduce capex and increase ridership, but nothing will help turn revenue into profit if the relationship most carriers have with cities still borders on hostile.
Shared companies started out thinking cyclists were customers, when in fact their customers are governments. Many companies have already realized this, but are still in the relationship phase. Operators have foundered trying to appease cities and obtain permits in a competitive land grab and, as a result, have often found themselves in over- or under-regulated markets and operating at a loss.
2023 could be the year these companies lay down some ground rules for cities and their ridiculous RFPs so they can have a chance at profitability.
“Most scooter tenders are one- or two-year trials or tenders,” Gross said. “Most of the time, when you sell to the government, you sell five to XNUMX-year projects. The idea that we start with these short projects and see how they go has not worked well. It leads to a very difficult structure to invest in.”
“Imagine you've been in a bid for a year and now they want six new pieces of technology in one product,” Gross continued. “Have you predicted that? Have you budgeted for that? It's incredibly difficult to build a business that way."
In the past, governments knew that these companies were pursuing a growth model backed by venture capital funds, so they could ask for whatever they wanted. But now, as traders are actively exiting unprofitable markets, they will have to push governments back and refuse to complete RFPs which will lead to more of the same.
Tendency towards ownership
We already know that people are buying electric bikes and it is estimated that by the end of 2023, sales will have increased 46% in North America compared to 2021.
Scooters, a cheaper electric mobility option that can be folded up and carried up stairs and on the subway, will see a surge in sales next year. According to a Future Market Insights study, the market for folding electric scooters is projected to grow from $626,8 million in 2022 to $806,3 million in 2032. That increase is partly due to joint ventures for carrying skateboards into the mainstream. Now if you ride an electric scooter you don't look like That one much of a jerk.
As we see more scooters on the market for private ownership, we'll start to see better premium scooters as well. Taur, for example, builds a forward-facing scooter that's fun and stable to ride (I know from experience) that's in the $1,500 price range. Carson Brown, co-founder of Taur, says that while expensive at first, Taur's scooters pay for themselves in a few months and provide the comfort and safety people need to rely on scooters for everyday use.
More subsidies at the grassroots level
In April 2022, the Denver Office of Climate Action, Sustainability and Resiliency funded an electric bike rebate program through a $9 million contract approved by the city council. The program was meant to fund electric bike incentives through 2024, but in less than six months, Denverites claimed all available subsidies. El show will return in 2023 due to its great success.
While President Joe Biden's Inflation Reduction Act included incentives to buy electric cars, electric bikes and other small form factors were left out of the language of the bill. That doesn't mean there's no future for electric bike subsidies in the US. Denver's program can and will be a model for other cities and states looking to advance sustainability goals and get residents off cars, and we look forward to seeing more similar incentive programs introduced at the grassroots level. Outside of Denver, Rhode Island already has a statewide electric bike subsidy program, and states like California and Connecticut are working on theirs as well.
Advanced cyclist assistance systems on private bicycles
2022 saw a rise in shared micromobility operators implementing scooter ARAS, systems that help detect and prevent curbside driving and parking. That same kind of technology is slowly making its way to privately owned electric bikes as the industry looks to convert would-be riders.
“There is a huge convergence taking place where bike technology is rapidly catching up with car technology. There are more connected bikes on the market every day,” said Will White, co-founder of Mapbox, an online mapping provider. “Bikes are already starting to ship with built-in ADAS features, such as radar for rear vehicle detection, but this is just the beginning. Soon, we will start to see more technology to keep passengers safe and comfortable, including cameras equipped with artificial intelligence for hazard detection and smarter turn-by-turn navigation that guides passengers along the most comfortable route out of harm's way."
White said safety and security are top concerns for potential electric bike buyers. Aside from road hazard alerts, features like navigation to avoid dangerous roads and asset tracking to deter thieves and enable stolen bike recovery will help spur further adoption.
