The days of the shared, dockless micromobility model are numbered. That’s essentially the conclusion reached by Puneeth Meruva, an associate at Trucks Venture Capital who recently authored a detailed research brief on micromobility. Meruva is of the opinion that the standard for permit-capped, dockless scooter-sharing is not sustainable — the overhead is too costly, the returns too low — and that the industry could splinter.
“Because shared services have started a cultural transition, people are more open to buying their own e-bike or e-scooter,” Meruva told TechCrunch. “Fundamentally because of how much city regulation is involved in each of these trips, it could reasonably become a transportation utility that is very useful for the end consumer, but it just hasn’t proven itself to be a profitable line of business.”
As dockless e-scooters, e-bikes and e-mopeds expand their footprint while consolidating under a few umbrella corporations, companies might develop or acquire the technology to streamline and reduce operational costs enough to achieve unit economics. One overlooked but massive factor in the micromobility space is the software that powers the vehicles — who owns it, if it’s made in-house and how well it integrates with the rest of the tech stack.
It’s the software that can determine if a company breaks out of the rideshare model into the sales or subscription model, or becomes subsidized by or absorbed into public transit, Meruva predicts.
Vehicle operating systems haven’t been top of mind for most companies in the short history of micromobility. The initial goal was making sure the hardware didn’t break down or burst into flames. When e-scooters came on the scene, they caused a ruckus. Riders without helmets zipped through city streets and many vehicles ended up in ditches or blocking sidewalk accessibility.
City officials were angry, to say the least, and branded dockless modes of transport a public nuisance. However, micromobility companies had to answer to their overeager investors — the ones who missed out on the Uber and Lyft craze and threw millions at electric mobility, hoping for swift returns. What was a Bird or a Lime to do? The only thing to do: Get back on that electric two-wheeler and start schmoozing cities.
How the fight for cities indirectly improved vehicle software
Shared, dockless operators are currently in a war of attrition, fighting to get the last remaining city permits. But as the industry seeks a business to government (B2G) model that morphs into what companies think cities want, some are inadvertently producing vehicles that will evolve beyond functional toys and into more viable transportation alternatives.
The second wave of micromobility was marked by newer companies like Superpedestrian and Voi Technology. They learned from past industry mistakes and developed business strategies that include building onboard operating systems in-house. The goal? More control over rider behavior and better compliance with city regulations.
Most companies playing to win have begun to vertically integrate their tech stacks by developing or acquiring new technology. Lime, Bird, Superpedestrian, Spin and Voi all design their own vehicles and write their own fleet management software or other operational tools. Lime writes its own firmware, which sits directly on top of the vehicle hardware primitives and helps control things like motor controllers, batteries and connected lights and locks.
Vehicle operating systems are a piece of the tech stack that tend to be outsourced, particularly to companies like Particle and Comodule, which essentially provide a SIM card with internet connectivity and GPS so each vehicle can communicate with the back end.
The OS orchestrates firmware and vehicle operations, connects firmware to vehicle applications and the cloud, and acts as a platform onto which operators can build applications like fleet management, predictive maintenance, battery and range management systems.
“We have a lot more capability on board the scooters than really anyone else in the industry, and that’s by design,” Goss Nuzzo-Jones, Superpedestrian’s VP of software engineering, told TechCrunch. “Electronic and embedded subsystems give us flexibility to change behaviors over time because we designed them and wrote the firmware rather than picking those up off the shelf.”
Defining micromobility and its potential to be bigger than autonomous vehicles
The potential of vehicle OS
In March, Superpedestrian announced an update to its OS that would improve its LINK scooters’ geofencing capabilities and battery efficiency. The update itself wasn’t a big deal per se, as Superpedestrian’s competition has comparably good geofencing and battery life capabilities. However, the messaging around the release was a hat tip toward cities still considering which companies they’d allow to grace their streets — a not-so-subtle attempt to position the company as the best choice for cities.
The announcement was also a chance to flex the LINK scooters’ vertically integrated software, which is run on the Vehicle Intelligent Safety system, a self-diagnostic and self-correcting onboard system that relies on AI, 73 sensors and five microprocessors. This intricate bit of tech gives the company an edge over the giants and potentially opens the door to different ways of making a profit in the long run. The VIS system is expected to save the company money on servicing and maintenance, but having a robust, original platform can enable them to scale quickly by layering new software on top of the OS as new ideas crop up.
“The operating system as a platform has a lot of interesting applications because it really allows these vehicles to become more than just their A-to-B utility,” Meruva told TechCrunch. “Whether you want to stack regulatory compliance on the vehicles, do safety features like ADAS, or add mapping content, you kind of need this platform where you can actively develop and launch new apps on the vehicle without having to bring it back to the factory.”
The Great Schism of micromobility?
Riders of shared, dockless models deserve to have the safest, smoothest, most exhilarating vehicle on the road, but the fact remains that at this stage, sophisticated tech might lose out to sheer size and force. Lime and Bird seem to be trying to take advantage of their network and may eventually build out a MaaS platform that integrates with public transit and ride-hailing companies. Perhaps they realize that the unit economics of micromobility, at least within the shared context, aren’t great enough yet to commit resources and develop a fully integrated system in-house. Moreover, the average rider probably can’t tell the difference anyway — they just want a reliable and accessible service, which Lime and Bird provide.
“For customers in transportation, reliability is the most important thing you can deliver,” Joe Kraus, Lime’s president, told TechCrunch. “If they’re going to shift their mode of transport from a car to micromobility, they have to be able to count on it, and that’s why we do demand forecasts. We can use our data from over 200 million rides to predict where demand is going to be in the next few hours, in this city, on this block. That allows us to do things like supply repositioning.”
While Lime doesn’t write its own IoT (yet), the company is focusing on a customer-centric approach. It recently announced new product features that would allow new riders to pay without downloading the app, and nixed the additional cost of reserving a vehicle.
Spin, with its Tortoise partnership, also wants to increase its impact. Tortoise provides an automated repositioning platform that will integrate within Spin’s IoT to send phantom scooters to locations where they’re most needed, thus increasing ridership through convenience. They’re piloting this technology in Boise, Idaho, and Spin pitched a small pilot to test its S-200 with Tortoise in the New York e-scooter bid, but it was not among the companies chosen for the pilot in the Bronx.
Showing up in as many cities as possible with an accessible product is great, but that might not be enough to keep the dockless model afloat. Many are still optimistic that consolidation will lead to profits, and whether you’re in that camp or in Meruva’s, one equally expects Lime, Bird and Spin to consider building their own OS for the vehicle, especially if they decide to expand into the owned or subscribed model.
As Uber (reportedly) squeezes Lime, scooter startups run low on juice
“Vehicle performance becomes a lot more impactful on the consumer experience when the consumer owns the vehicle or subscribes,” said Meruva.
Outsourcing technology doesn’t only affect vehicle performance, it also affects a company’s bottom line. For example, Voi and Spin are testing computer vision technology that helps the scooter detect things like lane departures, parking spots and pedestrians, but relying on outside vendors for this cuts into an already slim margin. Down the line, it would make sense to streamline such services, open up new business lines or join forces with public transit.
Or, they might do a combination of all three, copying each other’s tech to diversify their offerings and stay in the game. Ultimately, software is going to be the piece of the puzzle to watch as a marker for the direction of the industry. Scooters can only get so much sleeker, and electric motors only so much faster. People in the industry have been referring to e-scooters as iPhones on wheels for some time now. They’re not quite there yet, but maybe someday they will be.
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