Micro Mobility market pedals to acceleration

The pandemic has fundamentally changed the way that people commute. The onset of Covid-19 forced governments to temporarily shut public and shared transport services. As we adapt to the new normal, these services are being gradually resumed. However, people remain understandably reluctant to use these modes of transportation due to the high risk of infection that is associated with being in a crowded environment such as a bus or metro rail. According to the consumer research conducted by AutoTrader, nearly half (48%) of UK public transport users said they would be less likely to use it even after restrictions were lifted.

This reluctance to use public transport does not automatically translate into an increase in demand for cars and cab services. The pandemic has severely impacted the financial health of consumers and this is prompting them to look for budget-friendly alternatives that do not compromise on safety. An interesting solution has emerged to this dilemma — micro mobility.

Micro mobility refers to small, lightweight vehicles designed for personal use such as bicycles, e-bikes, electric scooters etc. These environmentally friendly vehicles are best suited for travelling short distances in congested urban spaces. Micro mobility options are significantly cheaper than private transportation and cab services since they are incredibly energy efficient and have significantly lower costs of production.

This has led to a mass adoption of micro mobility in recent months. Ties Carlier, co-founder of VanMoof, an e-bike manufacturing company, commented: “E-bike adoption was an inevitable global shift that was already taking place for many years now but COVID-19 put an absolute turbo on it to the point that we’re approaching a critical mass to transform cities for the better.” Estimates predict that the E-bike market is set to surpass $46 billion in the next six years. Deloitte estimates that the number of e-bikes in circulation world-wide should reach 300 million by 2023 — a 50% increase over 2019’s 200 million.

Manufacturers that design, manufacture and sell e-bikes have seen a significant rise in consumer interest. Prominent players like Vanmoof, Rad Power Bikes, Cowboy, Segway, and Ampler Bikes have witnessed 131%, 53%, 35%, 166% and 47% increase in their website traffic respectively over the last 6 months.

This surge in business and their vision for expansion have prompted these companies to bolster their workforce. Vanmoof, Rad Power Bikes and Ampler have seen a 33%, 42% and 26% employee growth YTD. This growth is even more impressive considering the stagnation and the layoffs which have characterized the transportation industry in the wake of the pandemic.

This optimism of the future of micro mobility is reflected in the investment in the sector in recent times. European VCs poured $165 million into e-bikes startups in 2019 and 2020, more than the previous four years combined, according to data from PitchBook. E-bike manufacturer Vanmoof raised a $40M Series B to enable it to take advantage and expand globally. Voi Technologies also raised $30M with launch of its fourth generation scooters while Cowboy raised a $23M Series B round in July. Vanmoof has experienced a spurt of demand and realized a 220% global revenue growth during the worldwide lockdown and sold more bikes in the first four months of 2020 than the previous two years combined.

It is not only the e-bike manufacturers which are benefitting from this change in transportation trends. Companies that offer e-bike rentals through apps have seen a boom in business. The resumption of people’s commutes has resulted in a rapid bounce back in the rankings and usage of these apps. Rental companies like Lime, Spin, Bird and VOI currently feature in the Top 10 in the Travel Category on the Apple Store. They have fared similarly well on the Play Store. The surge in engagement of these apps can also be observed in the increase in the review counts of the app.

In the wake of COVID-19, companies face an uphill task of surviving and continuing to grow. But based on the data, we can easily conclude that e-bikes are more than equipped to handle steep hills, both literally and figuratively.