Scooters for Sustainable Suburbs

Unpacking the social, environmental, and business case for scaling micromobility beyond America’s cities

2018 was the year of the dockless electric scooters. Last year, these motorized two-wheelers became so ubiquitous in American cities that their popularity was infectious for major cities around the world. Behind the hot “micromobility” scenes were some significant forces at play: The proliferation of electric scooter startups smelling opportunity in last-mile transportation, the rollout of hardware and software innovations at breakneck speed, and favorable unit economics captivated investors, many of whom didn’t want to miss out on parking their money in the next Uber. As venture capital loosened its purse strings, the e-scooter dream scaled much beyond the California circuit, littering sidewalk after sidewalk at a pace that stoked regulatory itches in every city it touched.

Despite docked and dockless bikes being part of pilot programs in several cities in the US, e-scooters are unique in that they herald a familiar, fashionable and cost-effective solution to the first/last-mile transportation problem. And it seems that cities, in their drive to increase accessibility and decrease congestion and pollution, are listening. In cities like Oakland, people have shown a preference for electric scooters over bike-sharing services. And business is certainly booming: Just recently, two of the major players, Bird and Lime, made proud pronouncements of completing over 10 million rides in over a 100 cities after an year of launching.

While the long-term profitability prospects of shared micromobility & MaaS companies merits a much longer discussion accompanied by justifiable cynicism, a flurry of short-term successes have certainly uncorked the everlasting flow of VC funding and lent escape velocity to growth-obsessed companies like Bird. The $2 billion-valued start-up, led by former Uber exec Travis VanderZanden, recently boasted of serving 2.1 million unique users, who covered an average distance of 1.4 miles per trip.

However, the desire to achieve long-term growth and sustain profitability will impel micromobility-focused businesses to adjust their roadmap. The next phase of growth for companies like Bird lies in progressing from conquering dense, pre-WWII neighborhoods and cities to the “sleepy” suburbs. Sure, suburbs signal a difficult path ahead, but they also hold a greater reward: If electric scooters can achieve traction in lower-intensity, diverse communities outside of California’s concentrated cities, they can become the staple vehicle for short-distance or short-duration travel. And the biggest opportunity here lies in challenging, and then replacing, the most popular mode of transport found in suburbia — cars.

The Benefits & Opportunities

Making e-scooters available in suburban cities and townships holds promising opportunities for all stakeholders — city governments, residents, and companies. Policymakers would do well to leverage MaaS and micromobility investments as a viable tool to not only to generate substantive revenues, but also meet state- and region-specific environmental and socio-economic mandates — and perhaps more importantly, make progress on their own local-level goals of creating healthy, prosperous and vibrant communities. Scooters would be empowering to the suburban resident, giving them the ability to complete short trips in times of need, save money they’d otherwise invest in a car, save money on fuel if you happen to own a car, and cut down your carbon footprint (particularly if you belong to the burgeoning population of today’s environmentally-conscious millennials).

Thanks to the outward expansion of cities like Los Angeles, San Diego, and San Jose, California typifies the fact that America’s suburbs outstripping its urban clusters in terms of population growth. These growing communities stand to gain immensely from having access to multiple transportation options that find that delicate balance between cost, simplicity, and convenience. The convenience factor is compelling: It takes just a couple of swipes on an app to get started, and riding these scooters feels equal parts of thrilling and dorky. By increasing the number of transit options in low-density suburbs, micromobility services will not only help existing residents with their commute, but also draw in a more diverse crowd of visitors from neighboring cities and towns. This increased traffic can inject these local economies with investments and patrons: American suburbs have been enduring a relentless phase of economic bust since big box retailers moved into their neighborhoods and online retailers began undercutting them at cost and convenience. The availability of micromobility services can afford these vulnerable businesses and low-income populations living in neighborhoods lacking proper access to the public transit system a viable, last-mile transit option. Moreover, they can create a whole new set of jobs in the gig economy, bringing more economic opportunity to these communities. Thus e-scooters have a realistic shot at transforming the socioeconomic health of California’s suburbs.

For micromobility startups, suburbs present a cogent business case: Serving suburban communities will open up new revenue opportunities as well as prolific funding channels. Meeting mobility needs idiosyncratic to suburban contexts (defined by low population density, longer commute distances between points of importance, and safety concerns relating to children and elderly) and understanding the archetypical rider will be a challenging feat to accomplish, prompting the start-ups to do what they do best — innovate. And the resultant attractiveness of their platforms will bring in valuable swells of new customers and data — and new generations of commuters not wedded to cars as the only option — whirring into motion a virtuous flywheel of growth.

Furthermore, micromobility startups can assist cities with an urgent, long-standing problem — addressing the impacts of pollution and climate change. In order to develop their cities more sustainably, city councils across the country have doubled down on changes in planning and policy commitments, most notably through the Climate Action Plans; Sustainable Communities and Climate Protection Act; and the changes to the California Environmental Quality Act, under senate bill SB 743 that emphasizes on the reduction of Vehicle Miles Travelled (VMT) metrics for new development. As an example, the Climate Action Plan adopted by the City of Berkeley has set a 2020 target to bring GHG emissions to 33% below pre-2000 levels. Similarly, in neighboring Oakland, the city council has also set a 2020 target, striving to reduce GHG emissions to 36% below 2005 levels. As part of its strategy, the city hopes to reduce vehicle miles travelled by its residents, workers, and visitors by 20 per cent. And that’s where the newfangled MaaS options fit in. In Oakland, there is high potential for their impact on the city’s goal to save 24 million gallons of oil by reducing vehicle use and encouraging more efficient transit choices.

For the suburban communities and policy-makers, scooters promise an effective linchpin to secure social and environmental impact at scale. But that is not to discount their economic impact, presenting sizeable revenue opportunities to city councils: In cities like Oakland, micromobility companies have to pay the city administrative office $2,500 just to apply for the permit to operate. When approved, they are required to pay $30,000 plus $64 per vehicle in annual fees in order to operate their fleets in the city. Even by allowing 3 scooter companies into their domain, suburban municipalities can raise sums large enough to fund major priorities, cover costs to oversee the scooter program, and engage in moonshot projects.

Smart micromobility providers can also accord benefits to existing transit networks. In suburbs with large institutions located within miles of each other, there is a massive demand for easy-to-use and cheap transit services to complete short trips (examples include your average walk to class or the walk every doctor must complete from their building to the parking lot placed at the edge of the medical campus). In these scenarios, e-scooters offer a cheaper substitute to the bus or van shuttle that has typically ferried commuters within campuses as well as between different venues. In fact, daily commuters, tired of waiting for shuttles and standing in overcrowded buses, would embrace scooters without the slightest hesitation.

Furthermore, once transportation and environmental policies at the state and regional level start nudging suburbs towards adopting more compact and mixed-use development, the value of micromobility services would become more essential for such projects to succeed.

The Concerns & Challenges

Electric scooter companies need to understand that foraying into new communities and markets will require a certain degree of amicability — and thereby, cooperation — with local city officials. Without winning their trust or support, e-scooter companies risk scripting the all-too-familiar tale of the ride-sharing companies, continuing to suffer from regulatory unease in American cities. In fact, some of them have already irked regulators, who’ve responded in kind with temporary bans or redrawing their service boundaries.

Top logistical concerns with scooters comprise pedestrian and rider safety, sidewalk cluttering, and rider age restriction. While these concerns will take time to solve, Lime has found ways to use its technology to work out a creative solution, designating “low speed zones”, no-parking, and no-riding zones in areas with high pedestrian density or traffic congestion.

The other public policy issue arises when bad actors enter the fray. There have been reports of theft, vandalism, speeding, and irresponsible parking. Addressing these concerns, perhaps in concert with regulators, policy, and planning officials, will have to take priority if micromobility services want to think about entering suburbs.

Another emerging area in the e-scooter debate is user privacy, especially on the fronts of data collection and management. Given the spate of privacy violationsincurred by Big Tech, cities are reluctant to allow scooter companies to collect, use, or share vast amounts of their constituents’ data. Suburbs, traditionally even more protective of their time-worn populations and carefully-managed communities, will be an even harder sell.

Lastly, micromobility services can make urban spaces more accessible for all. They offer a path away from the existing low density, single-use development pattern so unfairly skewed towards the private automobile users. Though the caveat for micromobility startups would be to find creative approaches to serve such communities while generating enough revenues to sustain their services. This may require thinking laterally with some hybrid formats, platform sharing,and community and advocacy group partnerships.

The Future Outlook

Going forward, micromobility providers would benefit from keeping the following principles in mind. In order to fully realize the opportunity offered by suburbs, micromobility start-ups will have to wrestle with these strategic considerations:

Use growth strategy as an opportunity to remake community planning: For MaaS companies, the strategy to expand their suburban footprint will necessitate more than a stamp of approval from the local municipal authority. Success in these communities will necessitate the generation and maintenance of demand, which will require companies to identify and respond to pain points in the local transit ecosystem. And the technological innovation coming next year will certainly help in this task. Companies would do well to apply this innovation towards the development of a single platform that would provide multiple modes of travel and distribute modal points in a manner that addresses the contextual needs of different neighborhoods. For example, a platform that include scooters, e-bikes, car-pooling and flexible route local transit, that advises the user the best option during a give time period would be able address the variation of distances, costs and ride-availability within a suburb.

Work with city governments, don’t shun them: To secure long-term and sustainable growth, MaaS start-ups should learn from Uber’s mistakes in obstinately and recklessly rushing into new cities. The ridesharing story clearly demonstrates how alienating local governments sets up a future of pain. Instead of deriding local regulatory bodies as indolent and slow, micromobility companies should recognize them as integral stakeholders with the power to unlock their business potential. Invitations, not rejections, to regulators is what’s going to dictate their future ability to be in business. Building on the success of the “Portland method”, the next Birds and Limes should consider ditching the cavalier approach and collaborating with city governments to design, execute, and iterate controlled pilots. This would immensely benefit micromobility companies, reducing resistance from city councils, earning them local goodwill, and smoothing the path to mass adoption.

There are further opportunities for micromobility companies to collaborate with city governments, in helping them achieve state mandates and regulations regarding GHG reductions, equity in mobility, and achieving CEQA requirements. As suburban communities try to balance the regulatory requirements with local needs, micromobility companies can step in and demonstrate how their services can yield a cost-effective pathway for suburbs to achieve the environmental benchmarks.

Work towards a cohesive model balancing business growth and social impact: In fact, collaborating with local policy-makers and planners can lead MaaS startups to serendipitous discoveries — such as new product opportunities that maximize promote public policy goals and various benefits customers enjoy. Just as a rough example to get a sense of the opportunity: Akin to campaigns like Lime’s “Respect the Ride”, a micromobility company could kickstart “Zip to School” program, working with local councils, transportation authorities, and transport equity-focused nonprofit groups to identify low-income neighborhoods demonstrating strong, unserved demand for daily mobility options that are both affordable and convenient. They could then extend discounted rides to specific segments, like high school or college students without personal vehicles. For micromobility companies, this achieves multiple objectives — boosting their rider volume in certain areas, making their service more appealing to neighboring communities and policy-makers, and availing them the chance to market themselves as a “shared value” exemplar realizing both community welfare with profits.

Leverage data to improve our cities and environment: Indeed there is potential for micromobility companies to deploy their technology capabilities, particularly their treasure trove of ridership data, to help policymakers understand the pressing needs and pain points in suburban communities. While tech companies’ data collection and use practices is currently under scrutiny — and rightly so, there is an opportunity for micromobility startups to learn from these mistakes and put their data to benign use. And looks like third-party organizations have already stepped up, helping cities like Los Angeles to analyze trips and fleet data. The goal is to use the gathered insights to sensibly guide their infrastructure development plans in the short and long term.

In addition to targeting new programs to serve marginalized segments, data from the micromobility companies can equip local governments and planners with powerful insights they need to make swift and significant progress when it comes to reorganizing and augmenting public infrastructure to maximize efficiency, sustainability, and affordability at scale — whether that’s building more protected lanes or increasing curbside utilization. In fact, upon successfully proving their ability to create indispensable benefits for suburban populations, micromobility startups can entrench themselves as a key stakeholder in city planning initiatives (think Smart City pilots, but tailored for low-density suburbs). Not only could city administrators use the data to plan discrete and demarcated parking spaces for micromobility and larger vehicles, but they could seize this opportunity to shift development standards away from automobile-based standards to a new set of standards focusing on diversified mass mobility. This would encompass reframing land-use regulations and rethinking lane, sidewalk, and parking infrastructure, strategically placing sensors into suburban landscapes to collect and analyze real-time data on how people interact with various infrastructure modalities, and investing in building and materials design that are most suitable and sustainable for pedestrians, bicycles/e-scooters, and transit, with the ability to accommodate cars where needed. The final outcome would be the transformation of the suburbs, hosting efficient mobility options that cut down the region’s share of pollution and GHG emissions, provide safer and cleaner streets to all, and connect areas of opportunity to transit deserts.

Become the ideal partner in the city-level battle against climate change:Realizing a strategic partnership between a micromobility startup and a suburb’s municipal government body can facilitate high-impact projects such as optimizing infrastructure to serve high traffic areas, reducing congestion in target zones, or creating integrated transport programs that expand the scope of transport service while reducing operational costs for service providers and usage fees for customers. In fact, the opportunity becomes even more glaring when you look at ongoing efforts by nonprofits and cities to improve the quality and equity of mobility outcomes or when you read each city’s Climate Action Plans intended to curb their sizeable negative impact on the environment. Oakland’s plan formulates “integrated planning” and “transit-oriented development” as strategic priorities to achieve its goals, leaving the door open for partnerships with micromobility companies.

By presenting themselves as partners in help suburbs achieve transit equity and environmental protection goals set at the state, regional and local level, micromobility startups can help communities gain public investment monies to improve infrastructure. Furthermore, companies can work to help advocate for better design by partnering with regional, state and national agencies and groups such as Caltrans, FHWA, NACTO and ITE to help remove the automobile bias that has been long established in road right-of-way building standards.

Co-written with sustainable urban development wonk, Bharat Singh.