by Joseph Brennan, a cofounder of Zoba. Originally from a small town, Joseph has fallen in love with more than a few cities on two wheels — Bangkok on a motorbike, Beijing on an electric moped, and Boston on a Bluebike. Joseph is a graduate of Harvard College and Peking University.
Zoba provides demand forecasting and optimization tools to shared mobility companies, from micromobility to car shares and beyond.
This is the first of several posts exploring the impact swappable batteries will have on the micromobility world. Here we broadly set the stage before future posts dive into specific topics.
Micromobility operations will dramatically change in 2020 due to the introduction of swappable battery vehicles, which allow the battery to be changed in place. Swappable batteries will drastically increase fleet uptime while substantially reducing operations costs. The new model introduces operational complexities in an industry just getting its feet under it. At Zoba, we provide rebalancing and deployment optimizations to swappable battery fleets across many different markets. In this piece, we will explain how the shift to swappable batteries profoundly impacts micromobility operations. In subsequent posts, we will explain how to deal with this new reality.
There are over 50 kick scooter operators across more than 250 markets globally, and most of the shared kick scooters on the street today do not have swappable batteries. Some operators already have partially swappable fleets and many moped companies, like Revel, have fully swappable fleets. Large numbers of swappable kick scooters will begin the streets in the spring, throughout the summer of 2020 and beyond. As they do, the nature of fleet operations will shift dramatically — and largely for the better. Swappable batteries will reduce some operational costs and increase fleet uptime. Coupled with increasingly robust scooters that last far longer than first iterations, swappable batteries will move the industry closer to profitability.
While the upside of swappable batteries is well understood, most operators are not ready for the additional operational complexity they will introduce. Swappable batteries create a whole world of new challenges to the quickly evolving industry.
Today, scooter companies charge their vehicles in two ways: (1) they pay gig workers to take the vehicles to their home, charge them, and place them on the street, or (2) they hire local operations teams (or specialized firms) to take them to a warehouse and charge them. In either case, vehicles are removed from the street when they drop below a certain battery level to be charged. The next day — typically very early — the vehicles are redeployed into the market. While numbers vary, oftentimes 20–40% of the fleet cycles in and out every night. Some cities require that all vehicles come off the street each night.
The key takeaway about the existing charging model: moving vehicles is not optional. Substantial vehicle placement is baked into the operational model.
For example, in a fleet of 1000 scooters with moderate to high usage, 200–300 may need to be removed, charged, and redeployed every 24 hours. Scooter companies use this opportunity to deploy the vehicles where they think most optimal for the next day. Zoba supports just this sort of optimization, for which we find the certifiably optimal distribution of vehicles for the day’s deployment. We’ve worked with companies to increase revenue as much as 50% by altering the morning deployment pattern. When done well, daily deployment can be a powerful lever to improve the performance of a fleet. But it is invariably expensive. Operators are either paying gig workers to place the vehicle or are supporting the expensive process of hauling 60 vehicles at a time in trucks to and from a warehouse.
With swappable batteries, operations teams can replace a vehicle’s battery in place. This removes the cost of either hauling the vehicle to the warehouse or paying someone to charge it in their home. It also increases vehicle uptime. For these reasons, nearly every major scooter company is hoping to move to swappable fleets in 2020. Swappable batteries — and more robust, longer-lasting scooters — should drastically improve scooter unit economics. But the operational model most operators were just starting to optimize — remove, charge, deploy — will be completely upended.
When batteries are swappable, most vehicles can remain on the street day after day; the operator is only forced to deploy vehicles which are new or returning from maintenance. The primary change this causes is that moving vehicles becomes entirely elective — what most in the industry call rebalancing (some car shares call it ‘repositioning’).¹ Today, many micromobility operators dabble in rebalancing as a means of increasing fleet performance. But few do it often and fewer do it effectively — and for good reason.
In a rebalancing and battery swap oriented world, the level of operational decisions required to operate a fleet increases substantially.² In deployment, operators decide just one thing: where to place the vehicles. In a rebalancing world, operators must decide: (1) if, when, and how much they should rebalance, (2) where to pull vehicles from and (3) where to move them to. In this framework, there are many more opportunities to make a mistake. An operator risks taking a vehicle from a relatively good location and moving it to a relatively poor location. And, since they could have left the vehicle in place, they would be actively paying to reduce the performance of their fleet. What’s more, rebalancing is highly time dependent and optimal distributions change drastically between, say, a morning and afternoon rebalance.
All the same, not rebalancing is not much of an option either. We will cover this in depth in a different blog post, but usage will leave vehicles in suboptimal areas — often near the edge of a service zone, in an oversupplied downtown, or at the bottom of a steep hill.³ Less obviously, vehicle allocations at the end of the workweek are often very suboptimal for the weekend. To keep vehicles in high demand areas, some degree of rebalancing is almost always necessary. But how much, when, from and to where are all difficult questions to optimize for in an ever-changing market.
Managed correctly, the shift to swappable batteries should be a boon for micromobility operators. But most are still struggling with basic optimization of their non-swappable fleets and are not prepared for a swappable world. To help alleviate the anxiety we see in the micromobility space around the transition, we will be sharing content on best practices over the coming weeks and months. Rebalancing is a primary area of support at Zoba and we will aim to share some of what we have learned from across markets and operating models.
If you have specific questions, email me at email@example.com. As always, we are happy to provide sample results to operators looking to optimize their rebalancing operations.
¹Rebalancing is not new or unique to micromobility. But it will become a bigger part of micromobility operations as swappable batteries become the norm. Zoba also supports rebalancing for other types of services, like car shares, where logic is similar but costs are higher (cars are moved one at a time).
²I have focused here on the ways swappable fleets impact the type of operational decisions we are focused on at Zoba. There are many other complexities it introduces — many related to charging infrastructure and operations.
³In part, this is because of the flat rate pricing models of most operators. In future posts we will cover our approach to incentivizing riders to rebalance through pricing and discounting.