A Wake-Up Call For The Micromobility Industry
Big news hit the shared mobility community this week when Bosch decided to shut down Coup, the company’s moped sharing business (https://joincoup.com/). And despite the fact that the overall market is showing strong growth, Coup’s closure is bad news for the whole industry.
Many people are discussing whether this is the beginning of the widely anticipated market consolidation of sharing providers. However, it’s my view that Coup is not the trigger for an upcoming market consolidation and my concern lies with other contributing factors, which this article highlights.
First. Let’s Understand The History
Like many companies, Coup started with big ambitions and was able to attract talented innovators such as the former co-founder of Tier who become part of the founding team that incubated Coup within the Bosch Group. By the time Coup got off the ground, they no longer enjoyed first-mover advantage, and Berlin-based Emmy had already prepared the market for moped-sharing and Gogoro (https://www.gogoro.com/) had already established a solid reputation.
What’s more, access to capital seemed endless, given the transportation giant Bosch’s solid financial backing of Coup. In fact, back in 2017, I can vividly remember the fear amongst all the moped sharing operators when we discussed the arrival of Coup on the scene.
Why is This Important to Know?
It’s important because the co-founder of Tier had spent merely a year at his previous company, Coup, before leaving to establish establish Tier, and my sense is that he was not able to deliver on his promises of rapid growth. Tier gave him the freedom to deploy his high growth strategy and cover multiple cities within months, whilst Coup’s plans to roll out within a short time in multiple cities had fallen flat, with a meagre presence today in only 3 cities — Berlin, Paris and Madrid. And whilst this may be seen as a major achievement, it’s not exactly the global footprint you want to demonstrate if you have plans for being the dominant player in the mobility market.
Fear Of Consolidation
Coup’s history tells us more about past mistakes than foreboding any industry consolidation. For sure, a consolidation is expected, but I believe we’re a long way off this, and it will most likely be a headache for the more dominant operators. Kick-scooter companies are still well-funded, and VW, Daimler, BMW, Europcar, Sixt and other corporates are all very active in this burgeoning industry. Every day local operators are still launching profitable ride-sharing businesses and enjoying good reasonable margins across a number of cities.
Which Can The Micromobility Industry Learn From Coup’s Demise?
1. A combination of slow decision-making, being afraid to take risks and an over-emphasis on a profit-driven mentality made them loose the blitzscaling race (https://www.blitzscaling.com/)
2. Coup’s product development philosophy was centred on developing everything from scratch with the exception of the IoT hardware. This meant multiple implementation fronts, and a lack of streamlined operations
My personal advice is that, unless you’re Apple, it’s just not possible to develop bad-ass scooter-sharing software, implement high-class operations processes in maintenance or spare parts management systems, establish marketing processes as well as continue to develop your vehicle hardware all at the same time. Something will give.
A laser-like focus is the key to establishing superior transportation services, as it will have an impact on drivers’ perception of value:
- Which vehicle am I driving (vehicle type)?
— What was my experience of the ride (vehicle experience)?
— How can I rent it the vehicle (user application)?
3. Make sure you implement the right KPIs to measure your success. One important metric widely used by operators is the number of rentals per day per vehicle. And we have seen how service providers are continuously trying to improve this metric through factors such as relocation, user growth and partnerships. These are all valid and important ways to work on the efficiency of the service. At the same time, maintenance and uptime rates of fleets have not been treated with the same level of priority and have only been tackled once daily operations become so vast that they can no longer be ignored.
For this reason, I would recommend that every implement two key metrics: rentals per day per vehicle and out of order time per vehicle per day.
Getting Maintenance Right
Maintenance is for sure one of the greatest challenges. On the one hand, customer acquisition costs are usually pretty low as the vehicles on the streets are visible enough to attract enough users in the beginning. On the other hand, however, ensuring that all vehicles are fully charged, shift-planning for service teams is working, spare parts are available to keep downtimes low and prioritising scooters in high-demand zones for maintenance sounds much more complex. There can be no bigger frustration for customers than a vehicle that cannot be unlocked due to hardware failure.
Without sophisticated software solutions automatising and documenting these processes, the task facing operators is huge and cannot be left to simple excel sheets for managing fleets of hundreds of vehicles and thousands of rentals per day.
Here are two ways we can use tools to improve the maintenance challenge:
Machine-learning models can help plan routes for service team members to keep vehicles in high-demand zones in good shape.
— The provision of easy-to-use service apps allows workers to repair vehicles on the street without other distractions.
Focus Is Critical
In 2016, we started an electric moped-sharing scheme in Vienna to understand the key challenges of running a daily operation. From this experience, we took all the key learnings and developed sharing software to address those market needs we had witnessed on the streets. This was critical because we viewed sharing operators who implement our technology as our partners, and it was important we saw the challenges with our own eyes. That’s why we have defined the above-mentioned metrics as key to our software development success.
By viewing ourselves as a not just a software company and more of partner helps us to really understand what it means to be on the streets, and is certainly of tremendous value for any operator out there, no matter the its size of operation.
