Micro mobility - not just good for the environment

Summary: Our cities need micro mobility (scooters and bikes) to work if we are to reduce car use, as they can replace short distance trips and first/last mile travel. Perhaps unsurprisingly, micro mobility availability seems to help some types of commercial activity.

Why this is important: As we wrote in a previous blog, electric vehicles are a key technology to decarbonise road transport, a sector that accounts for 16% of global emissions. But despite what you might think, it's not just about cars, or even trucks & buses. If you look outside of Europe and North America, two/three wheelers are really important. And they could be important in developed markets as well, as we transition toward a lower car use future in our biggest cities.

The big theme: Transport is not an end in itself. We travel to go somewhere, to do something that is important to us. This means we need to think about transport in its wider social and economic context. For this to work we need to leverage all sources of benefit. So, in addition to the direct financial benefit, we need to add lower pollution, better quality of life, faster journey times, and economic gains by local businesses.

Summary of a study published by Emory University:

Dock less shared micro mobility services (e-scooters to you & I ) have grown substantially in recent years, but their impact upon consumer demand has remained largely unstudied. The authors looked at how the largest and fastest growing segment of this market -- the dock less electric scooter sharing industry - impacts spending in one of the largest segments of the local economy, the restaurant industry.

The authors found that the introduction of e-scooters in a city significantly impacts restaurant spending, increasing spending by approximately 4.4%, driving incremental spending of at least $10.2 million annually across all cities that first allowed e-scooters to operate over summer 2018.

Let's look at why this is important...

The micro mobility sector has had a tough time recently. And as Hilary Lamb argues, the shift to Mobility as a Service (MaaS) could make their life even tougher. Why ? Because MaaS is mainly about the software, not the hardware. An interesting example of this concept being trialled is the MaaS Global project in Helsinki. Here for €59.70 per month, customers get unlimited public transport and bicycles as well as €10 in taxi travel. For €499 per month, they have access to unlimited use of all types of transport. Schemes such as this could end up shifting the competitive advantage to the software provider. Yes, the e-scooter hire company could get more bookings, but as a commoditised product, bidding against other options.

So, if micro mobility service providers are to flourish, they probably need to think about alternate approaches. Which is where this research might play a part. If the economic effects they identified are positive, then the beneficial impact of e-scooter programs on local GDP growth (and thus job creation and sales tax revenue) may make city legislators more amenable, at the margin, to e-scooter programs, and make local restaurants more active supporters. This all assumes of course, that local government agencies get to keep the financial uplift.

The research implies that the impact varies by restaurant type, with a strong positive effect upon fast food spending, and a small effect upon sit down restaurants. No surprise there. Additionally, E-scooter entry into a market facilitates discovery of new restaurants by prospective customers and increased repeat business from already-acquired customers. And the study infers almost no impact on non-restaurant in-store spending - implying the positive effects observed in the restaurant industry are not offset by negative effects for other local businesses.

Does this suggest that a successful micro mobility hardware model might involve a large element of fast-food brand financial support?

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