Scooting Beyond.

The next big thing in shared mobility is rather small: Micro-mobility. As cities become more densely populated and streets become more crowded, these services could replace privately owned cars and ride-hailing trips and function as first and last-mile solution for public transit. During the last two years, micro-mobility has been exploding all around the world. First, millions of free-floating bikes and motor scooters flooded cities all around the globe and now kick scooters are following.

A Micro-mobility vehicle is per definition a compact sized vehicle designed for personal mobility and one or maximum two passengers, mostly running via electricity. More specifically, Micro Mobility covers every one- or two-wheeler, from bikes, over larger scooters and mopeds, to segways and kick scooters and even these funny looking things called e-skates, go-carts and One E.

Scooter craziness and where the money flows

Investors are pouring hundreds of millions into scooter companies hoping that the best-capitalized scooter company will win. Within less than two years, scooter companies have raised more than $ 1 billion in VC investments. But as the prior rideshare and bikeshare wars demonstrated, money alone is not enough.

Who are the players?

Source: Company websites, Crunchbase

A bird doesn’t always need wings

In November 2018 — just 14 months after its stealth launch, US-based scooter startup Bird had launched in more than 100 cities around the globe, counting over 10 million rides in total and more than 200.000 per week and reached unicorn status faster than any other startup, notching a $2 billion valuation in less than a year. Let’s put that into perspective: It took Uber four years to reach a $ 1 billion valuation and Airbnb needed three.

Source: CB Insights, 2018

Of course, these numbers don’t go unnoticed and hence, ride-hailing giants Uber and Lyft are themselves entering the scooter market trying to conquer a piece of the cake. That is why Uber’s deal with Lime — Uber invested in the $335M Series C round that valued the e-scooter company at $1.1 billion (as of February, Lime is valued at $2.4 billion), is likely to be the first step towards a potential acquisition. In addition, Uber acquired Jump Bikes, an electric bike and scooter rental service, for $200 million.

Keeping in mind their aspirations to become MaaS providers instead of solely providing ride-hailing services, Uber realized that scooters fill a need their current services can’t. See also Newsletter #4 for more in-depth information on the Uber Strategy and Newsletter #12 “What if… Amazon will be the Amazon of Transportation?”.

Launch first, explain later vs. partnering up

So how do scooter companies actually conquer markets? Largest players Bird, Lime and Spin became known for their Uber- and Ofo-like launch strategy of begging cities for forgiveness rather than first asking them for permission. The launch-first, explain-later policy backfired most prominently in San Francisco when a new city law, which went into effect June 4th2018, banned scooters from the streets and the city decided to start licensing companies: ultimately Scoot and Skip won the only permits. Recently, Bird actually found a way back into the city of San Francisco. They will now be offering monthly rental options for their scooters that come at a price of $24.99/month and in addition started selling their Bird Ones.

After experiencing a similar story with bike sharing operators in late 2017 and 2018 (at its peak we counted 7 operators in Berlin only) in Germany, for scooter companies the only way to succeed in the German market is collaborating with municipalities and public transport operators. Knowing this, a bunch of European players are preparing for their launches while keeping in mind strict market entrance regulations (See Graph below).

Regulations in Germany

There is always a flipside…

Let’s talk about the “dark side” of Scooters. They are perceived as menace not only because these scooters are way too fast to use on the sidewalk. But also, people tend to use scooters in an inappropriate and reckless way and trough that, become a threat to pedestrians. People have already died.

Conquering Germany — Who will?

For all the attention and money that Bird, Lime, Spin, TIER, GoFlash, VOI and others have raised, they are not going to win the Scooter Wars. The Uber of scooters is going to be Uber. It is already a dominant incumbent with significant advantages. Let’s challenge this hypothesis.

As a result of increasing city regulations, there can only be so many electric scooters on any given city street. The holy grail for conquering cities, and especially in Germany, are good and strong ties to municipalities and public transport operators (hello Deutsche Bahn and SBB) who can help facilitate the market entry. Even more so as there are no major differentiators between all these different scooter startups. Meanwhile, investors have mostly placed their bets on the likes of Bird and Lime and with Lyft and Uber now making their scooter plays, we believe it’s going to be really hard for other, smaller companies to compete. But then there are also the large OEMs like Volkswagen considering to enter the kick scooter business or Hive, which was launched by Daimler-owned MyTaxi last year. We are beyond excited to see who will make it in the German market.

Sidefact Voi x Tier: In response to the impact and expansion of U.S. rivals to Europe, local scooter startups TIER and VOI reportedly held early-stage discussions on merging their operations.

P.S. Ninebot: Silent winner in the background

What most people don’t know: The hidden champion and true winner in the scooter race is hiding out in China and is called Ninebot (acquired Segway in 2015). After most scooter startups started off using Xiaomi scooters, they now are switching to manufacturer Ninebot who just unveiled their newest model at CES in Las Vegas. For Ninebot it’s going to be a big year.