Episode 6 — Going Premium: The iPhone model of bikeshare with Corinne Vogel of Smide
Welcome to Micromobility, a podcast exploring the disruptive potential of light weight utility vehicles. Using the history of computing as a framework we examine how these technologies will upend everything we thought we knew about the future of transport.
The host of the show is Horace Dediu, founder of Asymco.com and I’m his co-host Oliver Bruce.
On today’s episode Horace and Oliver are joined by Corinne Vogel, head of operations at Smide bikeshare based in Zurich, Switzerland.
Smide is a high-end e-bike share system, with speed pedelec bikes that travel up to 30mph/45kph. They’re doing a completely different approach to the rapid blanket approach from e-scooter rollouts we’re seeing elsewhere.
It’s a fascinating discussion — blew our minds.
Specifically, we touch on:
- who and what their customers are, why they choose Smide over other options and how this parallels to iPhone market positioning.<br>
- the importance of having good relationships with cities (and how they’re loved by the governments they work with)
- their unique crowdlending model for financing the launch of new cities
- how they deploy user incentives to help load-balance the network, and the importance of having vehicles that go >70km / 50miles per charge
As always, let us know what you think on Twitter at @asymco or @oliverbruce. Thanks!
Also an offer for our listener community: If anyone want’s to get early access to podcast episodes in return for helping clean up automated transcripts, hit me up on Twitter. Normally takes about two hours/episode. We’ve got some great content coming down the pipe, and it’ll help us focus on getting more guests on!
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Oliver: Welcome back to Micromobility. How is everyone going? We today we have Horace on the line and we have Corinne.
Horace: Good. Thanks.
Corinne: I’m doing great.
Oliver: Great, excellent. I’ll leave it to you Horace to do a bit of an introduction and then Corinne can introduce herself as well.
Horace: Super. As you can tell I’m really excited. I’m really excited as this is our first guest. Today, we have with us Corinne Vogel from Smide which is a company operating speed pedelec bikes as a shared system in Zurich Switzerland. I’m super excited because I’ve known Corinne for some time and I’ve actually asked her long ago to be on the show and we finally made it happen. I’ve actually been very familiar with the Smide system for some time because myself in and another co-founder we’re looking at this space and we met the folks at Smide a bit more than a year ago. What’s great about Smide and Corinnes role in it is that we can get some real operational details about what it’s like really to run a bike sharing system, and I’d love to dig into that.
So I’ll let Corinne also explain her role and a little bit about Smide. Welcome to the show Corrine.
Corinne: Thank you very much Horace. I’m very happy to be here. So yeah, my name is Corinne. I’m from Switzerland. I’m a co-founder of Smide, the world’s first stationless e-bike sharing system. We started Smide in 2015 in Zurich and the purpose was actually to learn about the megatrends of sharing in mobility.
It’s a startup and like in every startup, everybody has like a series of functions and roles. I am responsible for market development and partner acquisition, but I also do look after the operations team in Zurich. We have currently a small Fleet of 250 fast high-end e-bikes that go up to 45 km/h
With this rather small Fleet, we manage to get as many rides as our competitors do in Zurich. It is amazing. You may be asking why are we able to get as much use as all of the competition together?
Firstly, we focus on a very high quality vehicle. We know that people they’re actually willing to walk a bit further to get a premium bike and therefore we don’t require a crazy number of bikes in the city, like we saw in the China model.
Secondly, we are also stationless, so people can drop the bike at their final destination. We know that people will walk up to 300 meter to get one of our bikes. The other service like the station based services, they have a lot of bikes, but you actually only need one bike.
With our app, we’ve implemented some intelligent algorithms as well as incentives, which ensure that there is always a bike in 200–300 meters from a user in our geofence. So people get a bike whenever they want to have one.
Horace: interesting. That’s amazing. I think you gave us so much to dig into but before we go too far, let’s make sure people understand you started off by saying this is this is a special kind of bike.
This is a speed bike. can you tell us about the vehicle? You said it’s a premium product. How how should we think about?
Corinne: Yes, premium means a very fast powerful motor. Zurich is also quite dense and the Topography is very hilly. You can actually go faster, further with that high quality bike.
Horace: Right. So so you can go uphill very quickly. And what is this bike? Can people buy this bike?
Corinne: Yeah. It’s it’s a bike available now. It’s a Stromer bike. They’re one of the best ebikes available in the world right now. Yep, and people can also buy them.
Oliver: I’d love to just jump in here because this is this is such a different model from the from the American scooter model and Chinese bike model. You know, as you were saying, you know, those bikes are anywhere from $70–100 dollars. We know from the US that those scooters are around 400 dollars. Going really high end that that’s a really different model for Europe. Can you talk us through sort of how you’re thinking?
Corinne: I mean for Europe especially Swiss people, they like to have a very good quality bike. We can also see, if we look at vandalism in Zurich because in Zurich there used to be four different bike sharing companies. I mean Swiss people are very respectful people. But even they started like to vandalism of the cheaper bikes because you can tell they’re from a foreign company and they shouldn’t be here. So people really like premium products.
Horace: That’s really fascinating because you know, you would think that in a place like Switzerland, people are not likely to vandalize, to damage property, but they do tend to dislike these other low end bikes, but they tend to also not damage your bikes. That to me is fascinating. It seems anomalous. It seems strange. But are you confident that that would also be the case in other cities?
Corinne: I’m confident about Europe, for example Germany, in which the culture is very similar to Swiss culture. I would also think England will also have people respecting a premium bike more than just a cheap model.
Horace: The bike you use, the Stromer, it’s very much like a Porsche. Yeah, I mean it’s not maybe Ferrari because it’s not exotic but it is it is powerful and good-looking and it has a certain presence. So I think that you can see it far away and you can sort of identify the design language of it and so on. I wonder if if people are more likely to respect something that that has that presence versus something that seems to be more polluting or kind of just seems to be you know background noise in a city. So there’s something interesting to me. Also coming from a phone background, I think about the way people treat a Mac or they treat a an iPhone. They sort of automatically give it some respect. As Jony Ive likes to say, you know, they put a lot of effort into the design and it hopefully that shows that they care and they’re for other people will also care about the product. So the product reflects what was put into it.
So there’s something to say about that and I also like the lower density because of them fewer numbers, but how do people how do people deal with that? If the bike is in near them? How do you expect them to to use the service because there’s so few bikes and they have to walk maybe a kilometer or something. Are they willing to do that?
Corinne: No, no! I also I mentioned before that we’ve implemented intelligent algorithms as well as the incentive system for customers, which ensures that our bikes, the 250 bikes, are spread well within the geofence, so that people won’t have to walk longer than 300 meters. They know that maybe they have to walk 100–200 meters, but they’re very eager to get like a Smide bike because then they know with the speed pedelec, they get faster and further to a final destination. So they’re willing to go two hundred meters.
Oliver: So it’s different in some ways compared to anything else. Can you talk through what they can what the competition would be? So if I’m in Zurich and I’m like, I want to get somewhere. What are the other options that might be available to me that I would be comparing to from a customer perspective?
Corinne: There is one company. It’s subsidised from the cities. It’s actually a station based system, but they only have like stations in the core city. They will have up to 2000 bikes at the end of this year, but it’s a mixed fleet. With those bikes you only go for short trips in the core City. You can’t go further out. I mean you can but it takes you longer.
Oliver: W hen you say it’s a mixed Fleet, is that a mixture of electric and non-electric?
Corinne: Exactly. It’s made up of normal bikes as well as electric bikes. But the electric one goes up to 25 kilometers an hour. We are actually the only one in Zurich focusing on the speed pedelec, the one which goes up to 45 kilometer an hour.
Horace: But 45 kph, which is about 30 miles an hour, isn’t that regulated as a separate type of vehicle with the number plate and with other regulations like a helmet and a driver’s license? Doesn’t constrain the user base so that people not everybody can ride?
Corinne: Absolutely. For those bikes customers need to have a driving license. We have to check their registration and the bike also has to come with with a helmet and we know that actually this limits the customer segments. We know this this but on the other hand having faster ebikes also offered more use cases. And that’s actually the explanation why the overall usage is larger than with the competition.
Horace: Yeah, you end up with a different user base. Maybe not as young and maybe not as not as adventurous because you have the helmets regulation. But but you also you probably also get people who are willing to spend more because they’re going to you know, be a bit more affluent than having a driver license. Having a licence requires having some more means in Switzerland. It’s not the US where everyone has a license. But I want to ask a bit about competition so how does this service compare? What is the price? What is it relative to the other either micromobility or transit system in Switzerland. How do we think about it?
Corinne: Yeah you can just buy a package of minutes and now we charge like 25 cents per minute. But we also offer monthly subscription as well as yearly subscriptions where you get some free minutes daily. As I mentioned before, also one of our keys is incentivising users to drop the bikes where we want to have them so they can on the other hand also earn three minutes worth of riding. W hat we did is we set up a charging grid. Their customers charge the bikes for us and so we can also lower the operation expenses.
Horace: Right. Lime and B ird need to collect the scooters every night and they need to take them to someone’s house. Typically they use a crowdsourced service person who can go and charge the bikes overnight andthey have to pay $5 per per vehicle per charge and actually having the user do that for you, that’s that would save a lot of money in operations.
Also, who are you competing with? Are you competing with scooters? Are you competing with walking? Are you competing with Transit? what you’re offering is speed and presumably the range because you’re going to go further and faster.
And so is this commuters? Are these people who are just going out for a fun ride or how do you segment the customers and what they do?
Corinne: Yeah. As you said, people like our speed vehicles for long trips and therefore also Smide competes like with ridesharing such as Uber and also public transport. Our competitors are not the other bike sharing companies — it’s the car, its public transport. We also have studies showing that our ebikes, and that’s also what the city likes about us, actually bring people from the car to the bike. So actually it reduces cars and public transport in the long term.
Horace: I wanted to talk a bit about also thinking again outside of this context, outside of Zurich. Are you looking to grow into new markets? If so where and you planning on for example going to other parts of Switzerland?
Corinne: Yeah, we’re just launching our second place in Switzerland. It’s going to be the capital of Switzerland which is called Bern. Three weeks ago, we got the exclusive right to run station less bike-sharing there. We had to go through some long talks with the city by the yeah, we succeeded.
So we going to build up Bern with the same system as in Zurich. We’re going to have a small fleet with high-end speed pedallecs. What we also did for Bern which was very successful is we launched a crowdlending campaign. We were all surprised. We knew that everybody loves Smide, but after 24 hours, we already hit our first goal.
Horace: We’re not familiar with this.
Corinne: Yeah, we offered our customers, and the wider community, a very nice to deal. They could invest in Smide at 5000 Swiss Francs which will be repaid over the next three years. During this time you get a little interest, but you can also ride Smide for free for the next three years. So you get like a free monthly subscription.
Oliver: Wow!
Corinne: We were surprised that yeah after 24 hours we found 50 people who did that straight away.
Oliver: So just for context is about 5,000 Swiss francs is about 5,000 USD. Is that is that correct?
Corinne: Yep, that should be correct.
Horace: Yeah, they’re about 1 to 1 so let me let me try to rephrase this. So instead of crowd funding this is crowd lending. T he average person like myself could give 5000 dollars as essentially a loan to you and then I would get the money paid back to me instead of kind of hoping that you send me some product. In this case because it’s a service I get a free subscription, but that’s not going to be worth $5,000, but I’m presumably just going to get my money back and interest and get the free service. That seems like a great deal.
With most of these, you know, you’re sort of hoping that the person will pay you back but it sounds like you guys have a pretty good business model. So, 5,000 dollars, 50 people, that’s $250,000. So is that enough to deploy that many bikes in Bern?
Corinne: Yeah, we did this so we get we can actually start sooner. In Bern, we’re going to get 50 bikes to be deployed this October.
Horace: Okay, so for $5,000 you essentially are sponsoring one bike and therefore that’s enough to purchase it and probably operate it for sometime and generate some income. How big is the population of Bern?
Corinne: It’s about a hundred and fifty thousand people. We’ll scale up to two hundred bikes by next spring in 2019 and then go up to 400 later on. Yep.
Oliver: That just strikes me as really low.
Corinne: Well, it’s a start.
Horace: It sounds like it’s just the bootstrapping phase. A hundred fifty thousand by the way is a very small population relative to what we think of in the United States or even in larger cities in the Europe. It’s hard to believe that that’s the capital of Switzerland, but none of nonetheless, you know, you’ve got to start somewhere.
So I think it’s 50 going up to 400. Reasonable for this product which brings me to this point about the fact that this represents a high-end offering, premium you could say. It’s not meant to work without multimodality, in other words, it’s part of a spectrum of choices people have. So in the city where you have good transit, where you have personal cycling, where you have certainly high car ownership as well, people can choose this to complement some of the other modes they may have available.
So it’s interesting how I always believed in segmentation in terms of this service that there will be something for everybody. There will be some high end, a low end and they’ll be something in the middle. And in that case you don’t need to be dominant across the whole space. Again, going back to the phone business, Apple is satisfied with fifteen percent market share because they have the best 15%. They have the best customers and part of that is by creating a product that is premium. The customer owning that product signals that they have means to buy it but also that they’re willing to spend which is which is a signal to software developers and others to develop for the platform because you know the buyers more likely to spend money. This again leads to the question of how you can leverage this audience to do more than just ride bikes? I mean, I’m sure you can start thinking about selling other services or working with the customer to deliver something new. I love the idea of premium and in this space, which is considered predominantly to be the cheaper the better where I think the Chinese got us thinking that that you have to have many many bikes and they have to be very very cheap but that has not worked in Europe, we’re seeing this alternative there emerge.
Oliver: I mean, yeah, you’ve seen Ofo and Mobike are pulling out of the US and Australia/New Zealand. T his is such a different mentality. Forgive me Corinne for saying it’s so small, but it’s just so antithetical to the ideas that you see with the deployment of the scooter market in the US where they’re just like let’s flood the entire city with these with these scooters.
Horace: Cities don’t like this too. You see San Francisco limiting to 650 scooters per operator and and that’s a scooter business and I think that’s 650 for a population of something close to 800,000 people.
So, you know, you’re dealing with many multiples of Bern and yet still you don’t have the super high densities available of New York City, which has 15,000 [citibikes] for a population of eight million people in New York City.
So it’s proportional to the market and I think we’re starting to see the beginning of intelligent marketing for Micromobility and really thinking about what are the customer segments? What are the right price points? How do you work with cities so that the utility value is also not detracting too much from the space that’s being occupied which by the way is public land and therefore shouldn’t be abused by private interests.
Oliver: Corinne, how do you how do you work with regulators in terms of parking enforcement and that sort of thing?
Corinne: Yeah regulation is a big thing. It’s very important to talk to cities. Zurich is very liberal, and that why they accepted even the Chinese model to come. Now in Bern, you have you have to get an exclusive right to be able to come to Bern because bike sharing systems, they have been all over the world, and everybody knows the downsides around cluttering, so you have to take fear from the cities and you have to talk to them proactively.
We are doing fine in Switzerland. Cities are very happy about us with our small premium fleet. We know where our bikes are because the bikes have got a modern tracking sensor inside. We also don’t clutter streets and that’s becoming more important for the cities.
Oliver: So just out of curiosity, when someone goes to you know, finish up with their bike, can they only park in specific areas? Do they have to lock it? Do they lock it to something? How does that how does that experience work?
Corinne: No, the bikes are free-floating. We work with a geofence where you can ride and give your bike back.
It all works through an app. You can you open the bike and you close the bike through the app and the motor actually blocks then when you close the bike. We try to advise customers to park the bike at the public bike stations, but they don’t have to in Switzerland. You can park your bike everywhere, you just have to make sure like there is enough space for the people who like to walk.
Horace: So, let me let me just build on this a bit because I think maybe people didn’t catch one detail which is that these are hub motors. So the motor is in the back wheel and you can electrically lock it because it acts as a generator. The cool thing is that you can remote lock the bike with simply by having the motor act as a brake and then people would have a hard time moving the bike. That is pretty clever because you don’t need mechanical locks, it’s a purely electronic, and the communications happens through basically a module that acts as a cellular phone and you can obtain data and send data to the bike directly. It also knows its location and so on so it’s a very smart bike. I think I think what’s different also from the purely mechanical bikes which have a lock on them like the Chinese model, which uses a locking system that is based on a little bit of battery power that’s available either the user inputs that through a dynamo or small solar panel that keeps the battery charged on the bike itself, but only the lock is intelligent. The cool thing with this is that you have essentially a smart bike with loads of power. Can you tell us about the range and how do we how many times do you have to charge the bike?
Corinne: The range you can actually drive is about a hundred kilometers with one battery. It actually depends on how much you want to get supported by the motor. So if you drive on the highest support level, you can go for 70 kilometers before swapping batteries. We have pretty good weather in Switzerland at the moment so our bikes are getting driven quite a lot. So we have to swap batteries every second day.
But what we’re starting to do is build an electric charging grid not only for our bikes but also for other bikes and incentivise a customer to charge our bikes and if they charge our bikes they get like three minutes. It helps us recharging the whole fleet.
Oliver: What I would really love to know from your perspective is about safety. I mean 45 kilometers an hour is fast. I took out a Stromer when I was in Dublin and they don’t make you wear helmets. The guy at the bike shop was like, yep, just go ahead and I was zooming around Dublin and I was like, oh my goodness. To my to my New Zealand sensitivities where we all have to wear helmets for everything, I had a minor freak out because those things are like rocket ships, you pedal in them and then all of a sudden you realize you’re going as fast as the cars. I’m kind of curious for you guys how do you mitigate for accidents. Has that been an issue with with having faster more, higher powered bikes?
Corinne: It has been an issue. When we first talked to the city of Zurich, they were concerned about having more accidents. So when we started our ebikeshare Zurich we agreed to put puts the maximum support level to 35 kilometers an hour and not 45 kilometers an hour. We have been running with those bikes for one year and after one year, we had our statistics and we saw that there hadn’t been more accidents than in private use. Actually with our Fleet bikes there have been less accidents.
Now what we do is that for new customers, they have to start with a support up to 35 kilometers per hour, but like people who are using Smide regularly and who are used to driving the Stromer, they can go up to 45 kph.
Oliver: So you can do that via the software? You’re only allowed to go up to 35 kilometers an hour until you’ve done an hour worth of riding. That’s cool. Well, let’s just say Horace, I see what you’re on about this. That’s really impressive.
Horace: Yeah, I mean it’s what I thought when I first saw the system. Mind you, it’s something that ran already since 2016. So they’ve been doing is longer than anybody. Back then, there were very few free-floating systems, only in China but also certainly no one was doing free float e-bikes. They’ve really gained a tremendous level of competency and experience because they’ve learned so much over these few years. They’ve also grown organically into their market rather than trying to expand using you know, fire first and ask questions later type approach. So I like that I like that a lot and that’s one reason I was attracted to the to the whole system there.
Okay, so just thinking about growth. Switzerland certainly seems a doing great success there. Are you now you mentioned also Germany and potentially England, maybe London. Do you think fundamentally this works across Europe? Is this something that could could be expanded? You know, we’d love to see that for example up in Finland.
Corinne: Yes, I’m very convinced. Our service would work in other countries. Germany for sure as the culture is very similar to Switzerland. We would also like to go like in bigger cities like Berlin and Munich. Also London will be very interesting London has put a lot of money into the bicycle infrastructure and also banning cars from the city center. That would be very interesting to get there.
Horace: indeed. I was just I was just in Copenhagen as well and just last week and there was for this Micromobility conference and it’s shocking how many bikes there are in that City and how calm everyone is using them?
It’s very much like Amsterdam, but but Copenhagen seems bigger and and it seems like people are using it very structurally. It’s like it’s part of the part of the infrastructure, part of the culture and it’s the idea of the speed pedalec I think would be interesting there because most people don’t have e-bikes. In Germany very very many people have tried now e-bikes but this is this is an interesting question about which cities are the best ones to enter because you have some cities with very high modal share for bikes but many people own them. So maybe they’re not as likely to use a shared service. Now from your experience Corinne, how do we think about Swiss people as your customers people who normally cycle have their own bicycles, but find using Smide more convenient?
Corinne: Our customers want to be very time efficient and they like to get very fast from one place to the other. We have private bankers as well as like students who have to go up uphill to study like for the ETH in our customer segments. Of course, you got more men. Women customers tend to be a little cautious to ride a fast ebike. But generally, yeah people want to have like a good bike a very good bike.
Horace: that’s amazing is you know, I would imagine most people have their own bikes, but they’re still not the ones that maybe they would buy because the ones you have are going to be faster. It’s very rare when you have a shared system whether it’s public or private, ie a Transit Network or even the car rental service, you don’t usually expect those vehicles to be premium or even better that you might then you might own yourself. You don’t usually go to a rent an exotic sports car, although some that’s beginning to be a business model, but it’s it’s probably less than 1% of the volume. it’s most likely that you’re going to get very boring and generic cars. Also if you’re going to get on the bus or on a train, you don’t expect the performance oriented vehicle, but but it’s still fundamentally interesting that here in Micromobility, you have an opportunity to offer a premium experience on a vehicle that no one would actually buy themselves. A few people would buy themselves and even if they did they probably wouldn’t bring them into the city because they have to deal with you know theft and and other issues and they’re not very portable because you can’t just bring them up the stairs with you.
Oliver: I was thinking about that 5000 Franc offer and it’s like well, you know to buy a stroma is what 6000 Euros and that’s an expensive bike, but if you were going to go buy that it’s like ‘Well I only really want to use it on the street. I mean I want to be able to use it when I’m in the city and all of a sudden I can do this and you get the money paid back after 3 years and you have free use of that bike for three years. That’s an incredible deal.’
Horace: I think so, I think in fact that you know, you really should roll this out everywhere. I think it’s there’s there’s a market for premium everywhere. We seeing this not just with the iPhone and you know and in the case of the iPhone, we have 800 million of them.
In use over 1.5 billion of them have been sold as is by no means iPhone is not an exclusive product. I mean, it’s premium product. But if there’s there’s there’s there’s probably one in five people who can own it who do own it and you know in some markets is one in two people.
When you think about the idea of premium there are people who are willing to pay for quality everywhere and having this option, even if you’re not going to saturate a market, then you’d only capture 20% of it. It’s still a very interesting market and I think it’s possibly the best, the best quintile, the best fifth of any given market is the one that’s being targeted here.
Anyway, I’m probably saying too much here because really gold.
Oliver: Like my mind is being blown here because it’s such a different approach to this to this model.
Horace: Just a quick point that came to my mind.
So here’s an opportunity where a sharing business takes on the high-end where the consumer does not and it’s very interesting. I haven’t even figured it all out, but it sounds really fascinating.
Corinne, you’ve been wonderful guest and we really enjoyed learning about the Swiss ebike system and Smide. How can people learn more about this? Is the website available in English?
Corinne: Yep, there is a website available in English as well.
As you can also download our app. It’s also in English and but the best thing is of course planning your next vacation in Zurich, a stopover or even longer and try out our service!
Horace: It’s www.Smide.ch right?, that’s right. Great. Highly recommended as well. I’m a user and I’m a fan and I’ve experienced it in its in its beauty. Check it out Smide.ch and thanks Corinne for joining us on the Micromobility podcast.
Oliver: Yes, thank you.
Corinne: Thank you.
