In this blog post, we’ll be taking a look at the enormous growth potential that the micromobility market possesses, why the sector is likely to experience this growth and highlight how MOBIX is aiming to become a key component within this new, international, transport ecosystem.
As noted within the MOBIX litepaper, the consulting firm McKinsey has estimated that micromobility markets will increase in size to somewhere between $300 – $500 billion by 2030… and it is beginning to look like this was a somewhat conservative estimate. The compound annual growth rate for the industry is now being pegged by analytical and consultancy companies between an estimated 18.8% and 78.7% each year!
In the U.S. a new e-bike is being sold every 52 seconds. Micromobility industry growth across Europe has seen 200% growth since 2019 (exceeding the estimated compound growth rate). But what are some current factors behind the growth of the industry?
- The basic economics of shared micromobility makes it a very lucrative market to both investors and consumers.
- From the perspective of the consumer, micromobility solutions are relatively cheap -in both a fiscal and horological sense- when compared with alternative forms of transport. Put simply, they get the consumer from A to B quickly, for a reasonable price per mile.
- The technology within the MOBIX wallet is also incredibly user-friendly, with AEAs prospectively planning trips on behalf of users.
- This is also positive in the eyes of city planners, as it presents an enticing solution to the ‘last mile’ connectivity issue surrounding urban transport planning.
- From an investment perspective, it is considerably easier to scale up a micromobility enterprise than it would be a car-based sharing one. A new electric scooter costs roughly $400 but a new car costs many times that. Therefore, while the car-sharing solutions of today need many years to produce a profitable return on investment, a micromobility provider could break even on an e-scooter in less than four months.
- Battery swapping technology is making micromobility solutions more available. Fleets of e-scooters have substantially increased micromobility service provider fleet uptimes, both reducing operational costs and increasing revenue through vehicle availability.
- The growing population across the Asia-Pacific, and the increasing level of urbanisation there, is further increasing the demand for micromobility (both powered and not) services across the region. Chinese micromobility providers Ofo and Mobike are at the forefront of a surging micromobility market, and new market operators are also entering the market.
- Governments and local municipalities around the world are warming to the micromobility revolution. In 2018, Chinese Municipal governments subsidized the Public Bike Sharing Program (PBSP) to encourage alternative transport options and offer convenient, flexible, and low-cost mobility options.
- Finally, due to ever increasing public awareness of climate change and environmental pollution, the space is seeing increased interest from consumers, governments (providing incentives for the adoption of environment-friendly transport solutions) and investors.
However, despite all of the factors the micromobility space does have in its favour, there are currently some emerging constraints on potential upside growth.
- Despite Americans losing an average of 97 hours a year due to traffic congestion (which cost them roughly $87 billion, or an average of $1,348 per driver in 2018), some pessimistic reports have estimated that shared micromobility solutions will envelop only a portion of the potential theoretical market size.
- The reasoning for this argument is that the market is constrained by its suitability for certain use cases- such as; limited space when going shopping, micromobility’s lower presence in rural areas, uneven customer adoption, an age and fitness disparity among users and geographical factors such as weather conditions.
- Urban clutter. The proliferation of dockless micromobility solutions has led to some criticising the emerging market. Read more about industry solutions to this issue in our past blog post here.
- Micromobility service providers are having to combat the theft and vandalism of bikes- which has been an emerging issue around the world. Mobike revealed that they had lost 200,000 dockless bicycles to theft or vandalism in 2019. This is becoming such an issue that service providers are being forced to reconsider their commitment to providing micromobility services to certain ‘trouble’ areas. In 2018 GoBee pulled out of Brussels, Lille and Reims when 80-90% of it’s fleet in those cities was damaged or stolen. Also in 2018, Mobike stopped providing service to Manchester city due to rampant theft. This obviously results in large fiscal losses to the companies in question, which will overall hinder the growth of the micromobility market.
- Safety concerns. To read more about these check out our past blog post on the topic!
- For the full market potential of the micromobility revolution and auto mileage cannibalization to become a reality, cities need to support shared micromobility proactively. Some cities today have been hesitant to adopt the service- to read more about some of the issues and reasoning surrounding government hesitancy, read our past blog post here.
- Restaurants on car-free streets have 54% more interest. E-scooter users spend 41% more each day than people who don’t use e-scooters.
- Adjacent industries, even those such as restaurants (that don’t initially appear to be adjacent to micromobility), will likely realise that micromobility will assist their businesses. This could lead to local business-friendly municipalities becoming more friendly to micromobility solutions.
- With the privacy-focused SSI advertising seamlessly incorporated within the MOBIX wallet, it is likely that MOBIX will further bolster wider business and municipality interest in the sphere- which will assist the micromobility market overall.
- Over half of the world’s population now lives in urban areas, and that could climb to two-thirds by 2050. While existing mass transit options obviously remain the most efficient means of moving large numbers of people long distances… getting people to and from these transport options remains a difficulty—the much-discussed first-mile/last-mile challenge.
- Growing populations across east Asia and in India will likely see these markets continue to grow in size, particularly as micromobility solutions are relatively cheap compared to other transport options in the regions.
- Increasing urbanisation overall will exacerbate transit issues, which will require municipalities, even those hesitant to adopt micromobility, to reconsider their positions and welcome the coming micromobility revolution.
- The U.S. government has recently announced new transport grants worth $312 billion in order to combat climate change – and $7.5 billion is earmarked for EV infrastructure.
- In 2020 micromobility solutions in the U.S. offset 29 million pounds of carbon emissions by replacing short car journeys.
- North America does still dominate other regional markets in terms of revenue share contribution to the global micromobility market, making up roughly 40% of all micromobility rides.
- It is likely that a portion of these grants, perhaps moreso than expected, will be used to promote micromobility transport options.
Despite the teething issues surrounding the burgeoning micromobility market, it is not thought that these impeding factors will adversely impact the sector’s growth to a worth of $300-$500 billion (or more) by 2030. As industry solutions emerge to the current issues facing the market and industry technology, such as MOBIX, promotes the sphere, it is likely that the industry will face a consistent period of protracted growth. Local and national governments are increasingly warming to micromobility as a service for their citizens- plus the need to change our lives due to environmental reasons, the basic economics of the sector and the sheer enjoyment from riding something like an e-scooter all suggest that the micromobility revolution is only getting started.
The underlying technology of MOBIX is going to be a key component in this coming transport revolution- and the MOBIX wallet is due to be released tomorrow. Check out our socials, Twitter, Facebook and Telegram, for the latest news!