End of my ride with Mobike - What did I learn?

12 min. reading time

I arrived from Singapore on the 9th of February 2018 to launch what it would be the first free-floating bikesharing service in the region. My welcome message was: "You are already in Barcelona? Perfect. On Sunday at 12am we have the truck arriving to deploy the first batch of bicycles. See you then". My ride had began at a pace matching that of micromobility's growth: full throttle.

In this article I share my learnings about micromobility in Spain for the past 3 years and, to a certain degree, in Europe. However timelines, policies and actions varied city by city and country by country, I try to share an overview of the general tendencies that I observed, and the learnings that came to me, with a focus on the relationship between micromobility players and cities.

Why did Micromobility appear?

Mobike was one of the the first clear leaders to introduce the concept of free-floating Micromobility in 2015, as well as the biggest bikesharing player in the world deploying more than 10m bicycles worldwide. Horace Deidu, a micromobility expert, said that bikesharing in China was the fastest growing technology platform of all times. Tailing along came E-scooter sharing companies that in 2018 were just waking up.

But they didn't take long to catch up. While Mobike had managed to reach valuations of around $3bn by 2018, e-scooters overtook the dominance in the western world through an aggressive expansion.

In 2018 the micromobility rage had gathered momentum in Europe.

In a way, it seems only normal that this trend kicked in so strong. In a world where city population is growing at a fast pace (68% of population is expected to live in cities by 2050), where we waste more than 100h a year stocked in traffic , where more than 60% of car trips are less than 10km, where cities allocate more than 50% of space to cars, where cars are unused 92% of the time, where 9 out of 10 people breathe unsafe air and transportation is responsible for 30% of such pollution (with cars representing the majority of this pollution), it only seems normal that society immediately jumps at a low-entry barrier alternative to city transportation that is faster, cheaper and non-polluting than the current solutions.

However, the still short past of micromobility in Europe tells a different story of that of a well-received and highly adopted technology. If we look at Mobike itself, it was launched in 2015 in China. In just 3 years, it expanded to over 200 cities in 19 countries. Such an international expansion, however, presented its challenges. And in an effort to sustain its economic viability, in April 2018 Mobike was sold to Meituan for $2.7 billion. Throughout the next year, Meituan slowly offloaded most of Mobike international branches to local players (Yes, I went through 2 M&A and was employed by 3 different companies during my time at Mobike).

But challenges did not only come to Mobike. Almost all of the other bikesharing players closed operations in Europe. And the second wave of micromobility players, the e-scooter players, started to see growth and valuation reductions, M&As and closures just over a year later.

So, why would one of the fastest adopted technology solutions in the world face such challenges?

2018 - Micromobility Startups vs City Councils

I don't know if you had the opportunity to work with city councils. But it's likely no secret that Startups and city councils work at different speeds. While one is worried over a growth of 100x not being enough, the other is rightfully worried over the affections a change of 1x can have given the history, infrastructure, optics, compliance, population, etc. Essentially, a difficult mix.

At the beginning, when city councils started to see a shy number of company's executives (including myself) proposing what it was going to be the biggest revolution in mobility their cities had ever seen, and at no cost for their public funds, you could see sparks in their eyes. They all were very aware of the current mobility challenges their cities were facing and eager for a solution.

However, over the next few months, investment started pouring into anything that had the name tag of micromobility. A growing number of micromobility startups started to have their pockets filled with money, and a single mandate on how to spend it: Growth. Words such as profitability, localisation, efficiency were not spoken during this phase of micromobility.

In the late 2018 we lived what I would call the micromobility fever. The initiatives that city councils once welcomed without much regulation had take a turn. A wave of up to 10 different micromobility companies started to invade the sidewalks and the city council were not prepared. This soon led to several complaints from different collectives, and cities took action.

Learning Number 1:

It was no longer enough to have a good micromobility product and preach the huge advantages of micromobility to city councils. It became imperative to account for the intricacies of each city, its needs and its challenges, and figure out a way to adapt to them while keeping a healthy, competitive, business model.

2019 - City Councils vs Micromobility Startups

Authorisations, tenders, bans. Those were the words marking the start of the hyper-localisation of micromobility startups. In a very short amount of time city councils were pushed to put order in their streets and regulations started.

Police officers and city council workers became micromobility prosecutors. Several cities completely banned micromobility vehicles on their streets. From this point onwards, if you wanted to operate, you had to request a permit, apply to a tender and/or pay certain fees.

Micromobility startups had to pivot from the approach of being a shiny unicorn that doesn't fear anything, to become a horse that city councils could ride. And while micromobility startups were trying to re-adapt their strategies, city councils were releasing new regulations.

At this point, the need for reaching out to city councils became paramount. All players started to heavily invest on anything that had the words Policy on it in order to be able to influence some of the new regulations that were being drafted by city councils. Simultaneously, they were fighting to adapt their operations to comply with recently published regulations that, in some cities, were impossible to comply to.

Big players, which had secured significant funding, were able to withstand the losses that this new regulations and the need for increasing policy efforts brought. Smaller players, however, started to see an environment that made it very tough for them to sustain or raise further capital. Consolidation began and small players were faced with a hard call: Sell or face empty bank accounts. Some of this players ended up having an existence of less than a year.

This time also forced collaboration between the survivors. Different associations across countries were created and executives and policy managers from competing micromobility startups joined forces in order to speak to city councils with one voice, and to promote one solution. Well, ok, maybe it wasn't as straightforward as this, but we did achieve significant alignment between players.

Learning number 2

Micromobility became a sector, and it needs to speak as a sector if it wants to help build a regulation that is both acceptable for cities and the business models of micromobility players. This is essential in order to fulfill its promise of making a positive change in the mobility of the cities. Any player whose strategy is to go solo and accept regulations that generate heavy losses is not only killing the market in the short-term, but jeopardizing the micromobility's future, one that requires profitable business models to survive.

2020 - Covid vs Micromobility

And then, 2020 arrived. When micromobility was starting to stabilize, when cities started to get the hang on how to deal with the ordeal of players in a way that is sustainable, Covid-19 hit.

With a standstill during strict lockdowns across several european countries in the early stages of Covid-19, micromobility players were not seeing any revenues. During this time, investments significantly reduced and solvency was severely challenged in the industry.

This was a big hit for the micromobility sector which was still in the baby stages and, most of it, entirely depending on VC's pockets. Micromobility companies were pushed to the extremes and had to get creative on how to survive this new challenging scenario. Valuations started to drop and operations started to contract resulting in the closures of several cities and/or countries for some players. As a result, hundreds of micromobility employees were let go. Some of the players who survived 2019 had no choice but to end up closing shop.

But Covid-19 also introduced a spark of hope for a sustainable future. While citizens were locked in their homes, while offices were empty, while roads saw the quietness that only isolated villages' roads enjoy, some cities took the chance to introduce drastic changes such as expanding pedestrian space and increasing cycling lanes. Even though some of this changes were set to be temporary, my opinion is that it is highly likely that Covid-19 in Europe marked a starting point in the transitions of cities to a sustainable mobility.

And while Covid-19 will continue to challenge micromobility startups for the next several months, it is also likely that once the "smog" of Covid-19 leaves those cities, there is fresher air than ever and car-centric mobility emerges with a much smaller grip.

EBIT Positive - The Italian Way

For me, however, 2020 was a year in which I discovered a unique side of micromobility. At the end of 2019 Meituan offloaded Mobike in Europe, and I transition to lead Italy and Spain for the new employer that acquired the assets from Meituan: Idr bk Srl (commercially known as Movi by Mobike). Idri bk presents a curious case of micromobility in Europe.

To begin with, it has an EBIT positive operation. It also has deployed more than 20,000 bikes across 13 cities during its first 2 years of existence. It never raised any funds from VC. And, what's even more rare, it has an extremely good relationships with municipalities across the country, so much so that it receives subsidies in more than 70% of the municipalities it operates in. How is that possible?

Idri bk Srl acquired the franchise for Mobike in Italy in 2017. That meant that, on the one hand, it had all the know how, hardware and software capabilities of one of the biggest micromobility players in the world and, on the other, it could write its own playbook on how to deploy and grow, without pressures form an internationally distant HQ pushing. Over the course of the past 2 years Idri bk transformed biksharing in Italy by understanding the needs, budgets, concerns and constraints of each city and offering a solution that both city officials and citizens would value.

Such symbiotic relation is rare in the micromobility industry, but it shouldn't be. It presents one of the most viable scenarios I have seen so far, one in which the micromobility player and the city work hand in hand in order to offer a solution accounting for both long term sustainability of the operator and the needs of the city. This is really close to how any other mobility operator works in cities (including traditional docked bikesharing), except in the cost, allowing the city to enjoy the advantages of micromobility in the long term: the cheapest, most efficient, and most user friendly mobility option they have ever had.

Is this the future of micromobility?

Learning Number 3

Micromobility players are mobility operators with high impact in the cities they operate in. Most of the city mobility operators (bus, undergrounds, trams, etc) work under strict city council guidelines in order to ensure they serve the best interest of the city, and are heavily subsidized. Micromobility players need to learn how to integrate their services in the complexities of a city. City councils need to learn that, however micromobility has the lowest cost and impact to transport citizens from A to B, they still require help in the form of subsidies and/or cooperation if they are to have a future.

In late 2019 Idri bk did the big step of incorporating the hardware and software side of the business leveraging Mobike's expertise and knowledge, positioning themselves as a unique micromobility operator with profitable operations and a unique product differentiation. Keep an eye on them!

End of the ride

After almost 3 years of having the joys and pains of spearheading a micromobility giant such as Mobike in Southern Europe, and after a huge bag of personal, professional and sector-specific learnings, it is time for me to step down of my two-wheeled orange friend.

In micromobility I found a network of incredible professionals that have endured through some of the harshest challenges I have yet seen in my professional career. I take my hat off for the outstanding people behind the micromobility initiatives around the world. I hope that society will learn to incorporate the incredible benefits that the micromobility revolution brings, transitioning car-centric cities into multimodal smart-cities: cities where the fastest, cheapest, most efficient vehicle is used for each journey.