Three years ago, thousands of candy-colored shared bicycles appeared on Seattle streets, rebranding the characteristically gray-green city with a theme park aesthetic. Despite complaints about clutter, the arrival of dockless bike-share in the U.S. carried an optimistic vision of the future to match the cheerful paint jobs. Seattle would offer a bold, bright, more environmentally-friendly way to get around. The future would be shared, and green (and yellow and red).
But today, Seattle’s shared bicycles have all but disappeared from city streets as mobility companies that were already losing money absorb the shock of the coronavirus crisis. Seattle’s newly vacant streets reflect broader shifts in the largely untested micro-mobility industry.
It may not be the end of the road for scooter and bike-share, but the industry will look quite different on the other side of the pandemic.
The companies that operate dockless bike and scooter rental services are cutting staff, posting losses, and pulling out of cities as they attempt to weather the coronavirus storm. But what demand for micro-mobility will look like after cities open back up remains an open question.
We talked to transportation companies, city officials, and experts about what the future of micro-mobility looks like. Here are the key takeaways:
- The industry will become more consolidated as smaller players fold, but the companies that manage to hang on could see a resurgence in popularity down the line as consumers shy away from crowded public transit.
- Transportation has ground to a halt as widespread shutdown orders have shifted work and education online. As many companies consider a permanent shift to telecommuting, it isn’t clear if demand for mobility services will ever return to pre-pandemic levels.
- Micro-mobility companies will curb their previously lofty ambitions and focus on profitability over growth.
A micro-mobility test lab
Seattle pioneered dockless bike-share in the United States with its novel 2017 pilot. Three vendors were permitted to launch in Seattle, fueled by eager venture capital cash.
Over the next three years, many of those bicycles disappeared, casualties of a quickly evolving industry. Spin pivoted to electric shared scooters and pulled out of Seattle when it couldn’t get permission to deploy the new mobility devices. Ofo shut down operations in the U.S., unable to make the tricky economics of bike-share work. That left Lime, the company behind the bright green bikes and scooters in cities around the country. But Lime wasn’t the only game in town for long.
Uber rolled out its newly acquired Jump bike-share service in Seattle in 2018. Red and green bikes competed for Seattle riders until December of last year when Lime removed its bikes from the city in anticipation of a scooter-share pilot slated to start this spring.
There were more than 2.2 million bike-share rides in Seattle last year, averaging more than 6,000 per day, according to the Seattle Department of Transportation.
Then COVID-19 hit — and it hit micro-mobility hard.
Coronavirus curveball
In mid-April, Lime began winding down service in all of its markets except South Korea, where the coronavirus appeared under control. The company felt the impacts almost immediately. By the end of April, Lime laid off 80 employees, about 13% of its total workforce.
“Almost overnight, our company went from being on the eve of accomplishing an unprecedented milestone — the first next-generation micro-mobility company to reach profitability — to one where we had to pause operations in 99% of our markets worldwide to support cities’ efforts at social distancing,” Lime CEO Brad Bao said in an email to employees. “Needless to say, while we thought we had planned for all possibilities this year, we did not anticipate a global pandemic.”
The same day Lime announced layoffs, Lyft pulled its scooter service from Oakland, Austin, and San Jose, Calif., permanently. The announcement followed 982 layoffs at Lyft. A few weeks earlier, the once high-flying scooter startup Bird laid off 406 employees, about 30% of its staff.
Last week, Seattle’s rival bike-share operators announced they would join forces as both companies suffer blows from the pandemic. Uber led a $170 million investment round in Lime and agreed to hand its Jump bike-share business over to the micro-mobility upstart. The announcement came amid 3,700 layoffs at Uber, amounting to 14% of its global workforce. The company posted a $2.9 billion net loss for the first quarter of 2020 and CEO Dara Khosrowshahi told investors gross bookings in major cities are down as much at 70%. Jump pulled bikes from Sacramento following the acquisition.
“The entities that have the financial wherewithal, the retained capital and the access to money, are the ones that are going to move forward and prosper and [consolidate],” said Jay Townley, founding partner of the micro-mobility consultancy firm Human Powered Solutions. “The smaller entities — in all sectors but certainly micro-mobility — are going to struggle and will have a great deal of difficulty surviving.”
Jump bikes also disappeared from Seattle streets as the companies prepare for the shift in control, though Lime says they will return soon. Lime did not give a specific timeline but said riders can expect an email with more information within 30 days.
“Whether Lime brings bikes back or not, it’s time to talk about what the next phase of bike share looks like in Seattle … It’s hard to think of another sustainable transportation program that has created such a swift, low-cost and effective shift in how people move around our city,” wrote Seattle Bike Blog’s Tom Fucoloro when Jump bikes started disappearing. “Losing bike share would be a big step backwards for our city.”
Seattle scooter pilot idles
Meanwhile, the electric scooter-share pilot Seattle Mayor Jenny Durkan announced last year remains in limbo. The program is in the environmental impact review process awaiting a decision from a city hearing examiner before it can move forward.
“With that said, we recognize that the COVID-19 has impacted all areas of life including new mobility companies, and we are evaluating our options with these impacts in mind,” said Ethan Bergerson, communications lead for the Seattle Department of Transportation.
Before the pandemic, Uber, Lyft, Lime, Spin, Bird, Ojo, and a handful of other companies all expressed interest in launching scooter-share services in Seattle, according to emails obtained by GeekWire via a public records request. But it isn’t clear which of those services will still be operational and eager to rollout in Seattle or other markets when cities re-open.
Before the sudden proliferation of dockless bike-share, cities across the country debated whether the new mode of transportation should be public or private. Seattle first opted for a hybrid of the two, launching a public-private bike-share service called Pronto in 2014. But the program became insolvent due to operating losses and ultimately shut down three years later. Seattle’s private bike-share program saw 10-20 times higher ridership last year than Pronto, according to SDOT.
Portland’s public-private service, Biketown, fared better and allowed the city transportation officials to slash ride costs to 1 cent per minute in April to promote safe travel amid the pandemic.
Update: Lime and Bird said Thursday that they will deploy small scooter fleets in Portland to help healthcare workers get around, The Oregonian reports.
Micro-mobility companies were already struggling to make the economics of their cost-intensive businesses work before the pandemic struck. Backed by more than $6 billion in venture capital funding since 2018, they focused on growth and user adoption in the hopes of eventually turning a profit.
As their businesses grind to a halt, the return of micro-mobility will likely mean fewer competitors and more modest ambitions. Lime, for example, is focusing on markets it believes have the highest chances of success.
“We have shifted our focus as a company from growth and expansion to profitability, building a sustainable long-lasting business where we control our own destiny through profitability,” said Alex Youn, who works in communications for Lime. “We will continue to analyze the performance of every market as we have over the past two years, to determine whether cities meet our minimum business volume requirements.”
It’s a major shift in strategy from the days when a crowded field of mobility companies sought to elbow each other out of the way by launching in as many cities as possible.
The road ahead
Despite strong headwinds, mobility companies that do manage to stay afloat could benefit from the new landscape.
Lime ridership in South Korea has returned to about 80% of what it was prior to the pandemic, according to Jonathan Hopkins, who works in government affairs for the company. Two weeks ago, Lime launched a program in select cities that provides small fleets of scooters to help essential workers get around. Hopkins said Lime is seeing strong adoption of the program in Salt Lake City, despite strict social distancing mandates.
When Jump bikes were still in operation in Seattle, the company disinfected them whenever they were serviced. Lime has enhanced cleaning methods and frequency in markets where it is operational.
“When we get to a point where the pandemic is eased, and there are treatments, and there is a vaccine, consumers still are going to be reluctant … to get into crowded transportation environments and are looking for alternate ways to get to or from work or school or shopping [centers],” Townley said. “Bicycles and human-powered transportation are certainly an attractive way to continue to social distance and to allay fears of the ramifications of being in crowded environments for several years to come.”
The micro-mobility survivors will also face fewer competitors, which was once a key challenge.
But the ultimate longevity of the industry will depend on whether it can find an economically viable business model. As investors become more conservative, telecommuting becomes more prevalent, and city dwellers limit their travel, micro-mobility faces an uphill climb.
