Micro-Mobility Market Potential Widens

From e-scooters to robotaxis, transportation is undergoing massive shifts.


The mobility market is beginning to splinter into more segments as advanced technology gets applied to devices such as e-bikes, e-scooters, and even tiny e-vehicles with three or four wheels.

This doesn’t mean that existing pieces of the mobility market are falling off. The automotive electronics market is booming as carmakers race to build more assisted and ultimately autonomous features into cars. But getting from one place to the next doesn’t necessarily require a car, and being able to grab these devices whenever they are available and not have to lock it up or take the vehicle off your hands is catching on in a big way. In fact, McKinsey and Co. forecasts the worldwide micromobility market could be worth $300 billion to $500 billion by 2030, with the U.S. accounting for 60% or more of the market.

Yellow, a Brazilian firm that provides a dock-less bicycle and scooter service, and Grin, a Mexican e-scooter startup, are merging to form a new company, Grow Mobility, with 135,000 vehicles in six countries of Latin America. The company is applying for permits to operate this year in southern Europe and the U.S.

“This match [between Yellow and Grin] makes a lot of sense given our plans. We are already the dominant player in Latin America and will be very successful here given the limited transport infrastructure and climate, but we will move forward with our global ambitions,” says Marcelo Loureiro, Brazil co-director for Grow Mobility. “Both Yellow and Grin were bound to get funding and be successful in their own right, but rather than getting into a fight for regional competition, we are now united in our global expansion plans and are much more powerful together.”

Yellow debuted micromobility service in Brazil last year and received $63 million in Series A funding led by GGV Capital. Grin, which also was established in 2018, last year raised $45.7 million in Series A funding. Y Combinator was an early backer of the company, which also took in private funding from Sinai Ventures, Liquid2 Ventures, 500 Startups, Monashees, Base10 Partners, and other investors. Its total private funding was $72.7 million, according to Crunchbase.

Nicolas Inchaustegui, a Frost & Sullivan consultant, says mobility is essentially “any way that people or goods move. The services and products under this umbrella are pretty numerous. It could be a personal vehicle, a taxi, an airline, private jet. It could be a bus, an 18-wheeler. Increasingly, mobility is returning to a service-based model that is like an ownership-based model. Services are really going to have to expand during this time. Those are going to include ride hailing, car sharing, again, personal vehicle. Any service or product to get somebody from point A to point B.”

Inchaustegui says microbility is particularly interesting for first-mile and last-mile solutions. “It could be like a small pod bus. In Detroit, we have these small autonomous shuttles that are closer to the size of a car, but they’re still helping people to get that last couple of miles in the parking lot to work, or vice versa. It could include small electric cars, Segways—even walking, which in my opinion is kind of like the most basic micromobility. When I define micromobility, I first ask if this is solving the first-mile/last-mile transportation. They’re going to work for some people for their commute if you already live in an urban area. I’m really betting on this market to grow as mobility-as-a-service grows, as people relinquish car ownership, as they move to cities more and more. In Detroit, we just introduced e-scooters, and, boy, they were a lot more successful than I expected.”

One development Inchaustegui says is particularly intriguing is the SoMo application, which combines maps, navigation, and social ride-hailing, connecting people who need to get somewhere with family, friends, and co-workers for sharing rides.

While ride-hailing has become very popular, thanks to Uber and Lyft, ride sharing and car sharing has yet to catch on in a big way in the United States. Zipcar and Maven are addressing the car-sharing market, among other companies.

In London, in contrast, car sharing is very popular. And China has definitely taken to ride hailing with the dominance of Didi Chuxing, he says. Europe, with its strong taxi unions, has restricted ride hailing for the most part.

“Asia is going to be the biggest market right now, followed by North America,” Inchaustegui says. “Europe has been slower to adopt, but there’s definitely going to be mobility services there. Whether they’re from the major companies, like Uber and Lyft, or more smaller players, I think it’s going to lean toward the latter.” Ride hailing is gaining in Latin America and South America, he notes.

Shifts across the mobility market
Jeremy Carlson, principal analyst for autonomous driving/automotive at IHS Markit, says the whole market for moving people and goods is changing.

Autonomous driving, electrification of the drive chain, and mobility are leading topics in the automotive industry, he notes. “When all three of those come together, we see the strongest argument or the strongest benefit when we are able to layer all three of them together,” Carlson says.

CES 2019 was a big event for taking the temperature of the electric vehicle market. Concept cars shown there and at auto shows around the world are challenging the standard notions of coupes, sedans, trucks, and vans, with pod-type cars coming to the fore, in the form of light vehicles and personal vehicles.

“Ride hailing is definitely taking the lion’s share of the interest,” Carlson says. “That’s not to say car sharing or ride sharing are necessarily any different. There’s a lot of exploration happening in all of these areas—Daimler and BMW, for example. When autonomous does enter that mobility space, it’s basically the ride-hailing business model that most of these others would morph into. It’s kind of the best example that we have, as far as what the future autonomous mobility-as-a-service business model would look like, but it’s also incredibly easy to use. It’s mostly ubiquitous at this point, so it’s something that everyone also intuitively understands, and most people have tried or even used regularly…The convenience factor is quite high there.”

While some industry experts wonder how mobility-as-a-service will affect public transportation, Carlson sees mobility technology complementing public transit, possibly through ride sharing replacing bus shuttles.

The McKinsey Quarterly presented a report, “The Road to Seamless Mobility,” which outlines three scenarios for the evolution of mobility technology. The three scenarios presented by McKinsey are business-as-usual urbanization, unconstrained autonomy, and seamless mobility.

The McKinsey partners wrote, “Imagine a world in which population growth continued, but large cities managed their transport systems largely as they do today, with little innovation in pricing or policy. Imagine further that complicated traffic patterns, setbacks in technology development, and delays in consumer adoption deterred the large-scale deployment of AVs, and that vehicles did not electrify in large numbers.”

The report said the results of that kind of model are discouraging. “Transport demand would increase in line with population growth (about 15% by 2030), and greenhouse-gas (GHG) emissions could rise proportionally. City dwellers would travel in mostly the same ways as they do now, and private cars would continue to account for about 35% of passenger-kilometers. Average travel times would increase by 15% because capacity would be strained. In the United States, without substantial change, this is the likely scenario: few cities, even the largest, have comprehensive plans that consider new and forthcoming technologies.”

McKinsey noted that the partial displacement of fixed bus routes by robotaxis could reduce wait and walking time, and if they were electric then air quality would improve. But congestion would get worse, and average travel times would rise about 15%. But a mix of existing transportation infrastructure plus robotaxis and different transport models could help. “Our analysis suggests that pooled AV shuttles could grab 25% of the market (twice as much as in the unconstrained-autonomy scenario), and private cars and privately used robotaxis could provide about 30 percent of passenger-kilometers in 2030, compared with 35% for private cars today,” the firm concluded.

Deloitte, meanwhile, identified four automotive trends that are foundational to the future of mobility – connectivity, electrification, shared transportation, and vehicle autonomy.

“Most scenarios involving future transportation systems center on the hyper-optimistic view that everyone will take full advantage of integrated, electrified, shared mobility networks that have unfettered the ordinary consumer from the bonds of fossil fuels and personal vehicle ownership,” said the Deloitte report. “Yet there are still many hurdles to clear. And perhaps one of the most important, yet often overlooked, is the question of consumer adoption. What proportion of people, for instance, will actually buy an autonomous vehicle (AV) or use shared transportation? Will this proportion be enough to transform mobility on a large scale? Is it possible that such technologies and behaviors will remain niche phenomena in a future that looks more or less the same as today?”

Tractica and TU-Automotive conducted an online survey in December, garnering 515 qualified responses from around the world. The leading topics identified by respondents were, in order of their importance: automotive cybersecurity issues, advanced driver-assistance systems, vehicle-to-vehicle (V2V) communications, connected-car services, vehicle-to-infrastructure (V2X) communications, artificial intelligence for automotive, autonomous vehicle use cases, consumer data privacy and security, intelligent transportation systems, and vehicle localization and mapping.

Technology providers who participated in the survey had slightly different priorities. They were, in order of importance, connected-car services, auto cybersecurity issues, V2X communications, consumer data privacy and security, autonomous vehicle software systems, V2V communications, AI for autos, vehicle data management, and sensor networking/data fusion.

Mobility technology is going to change lives in dramatic ways. It won’t happen all at once, of course. Incremental change will come over the next two decades, and many technology prognosticators point to 2040 as a turning point in mobility advances. No one can predict with absolute certainty what will emerge by that year, and it is likely that technology will yield changes we can’t foresee now.

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