In this article, I would like to share a new idea that I think is quite powerful: decentralised ownership in micro-mobility.
Bike-sharing, as we know it today, is not a sharing business. It's a rental business. You source capital, invest it in assets, and rent those assets out to users. The only way it actually differs from traditional bike rental is that the check-in / check-out process is fully dematerialised, making it so much more convenient.
Ultimately, what we have today at pony, is a bunch of bikes, each making revenue on every ride, which amounts up to a return after a few months.
The question we ended up asking ourselves is: “what are these bikes doing on our balance sheet?”. As a company, owning your entire fleet requires putting in a sizeable amount of money and brings no competitive advantage. So why do it?
The bikes generate a return and are each like an independent little business. We don’t need to own each and every one of them. Let’s share and let the people have them!
Let users take control of the mobility infrastructure of the city they live in ! They pay for the bike upfront, we design it, we produce it, we deliver it, we manage the local operations of it, collect the revenue, and give a share back to the bike owner. Owners can sit back, the bikes are working for them.
We think this is a good idea for so many reasons:
- changes the financing paradigm: Bikes or scooters are not making 100X returns, which means as an investment they are not attractive for VCs (the assets not the operators). Decentralising the fleet ownership creates the ability to onboard backers of all sizes at no marginal cost — minimising the need for working capital. The network of vehicles grows organically, and in line with the need of each city. Equity capital can instead be allocated, conveniently, to Product and R&D.
- solves the acceptability problem: people today complain about scooters that “they came out of nowhere”, that “no one ever asked for them”, and that “they are cluttering the city”. Yet, somehow nobody seems to complain about the zillions of cars parked on the sidewalks, which is a problem much more likely to impact people's daily lives. Decentralising the ownership of the pony bikes means they don’t feel like an alien invasion, someone specifically asked for each one of them. They belong to real people.
- may even contribute to reducing the vandalism problem. A sense of community is naturally created. The owners have an incentive for the scheme to work and naturally become its biggest advocates: they convince their friends and colleagues to use it, they report any issue they see on the field, they help us identify antisocial behaviours, etc.
- solves the lack of moat & defensibility problem by creating a network effect: more owners = more bikes = more value to users = more users = more value to owner = more owners.
- in the long run, it’s where we are all going. New technology allows for improved convenience and new usage, which is what we are seeing now.
But it also enables disintermediation. It’s already a powerful trend in several sectors (investment banking, tourism, consumer goods, music) and we believe it’s only going to get bigger. No one wants a world where the only choice to go from A to B is to use services from big faceless international companies. Here, the bike you use belongs to your neighbour, and profits stay in the community. Further down the line, with high volume, there comes a securitisation aspect in which micro-mobility becomes a new type of asset-class, but let’s not get ahead of ourselves 😅
Obviously this raises questions about the backers’ appetite. When I discuss the idea, I am often asked “But, do you really think people are keen to invest $200 in a bike”. In fact, the real question is, why would they not ? Bikes, scooters etc. are generating a return, if you are looking for accessible investment opportunities, why would you not want to be the beneficiary of this return ?
It’s an opportunity to invest in something local and tangible, that you can see and use everyday. Your investment contributes to improving the mobility offering where you live, so that you benefit directly from the externalities of it. The backers live amongst their assets, so they can immediately tell if their investment is doing well or if — god forbids — there is something wrong with their ponies. Heck, they can even chip in and go check their bikes out if they feel the need to. Finally, the backers benefit from free access to the scheme and even the opportunity to abduct and privatise their bikes if they want to take them to a festival or something.
In any case, no more need for speculation — we are doing it now, so we will see where the journey takes us 😀.
It’s called adopt-a-pony ! Here is what it looks like:
Users buy ponies via the app. When they do, we say they ‘adopted a pony’ and they become a ‘pony angel’. They receive a notification when the pony starts riding or when it’s been cleaned, moved or repaired by a staff member (more info here).
A decentralised network of ponies grows organically without the need for external capital. This really is turning the table: real people become the owner and the beneficiary of their local mobility.
This is why our tagline is ‘take the reins’ !
In practice, what we are building is a platform for a three sided market place that brings together, users, owners and staff (and ponies!). Each party benefits from the others. The more of them the better for everyone involved.
It's asset-light, defensible, personable, scalable: simply put, the platform model is a game changer.
Not just getting around.
Changing the way the world goes round 🤗
A dozen of happy angels are currently beta testing. Early bird offers will be announced in a few days. They will be exclusive to people registered on the waiting list (via the app or by registering on the newsletter here).
Drop an email to firstname.lastname@example.org if you’d like to join the beta group and give feedback.
Public launch will be in September :)
We’ll let you know how it goes.