2-Wheel Electric Urban Mobility on the Rise: Uber and Lyft Setting Eyes on Bikes and Scooters

Across the globe, two-wheel mobility is finding its second (electric) breath. Electric scooter and motorbike sharing initiatives are popping up in many cities, either as trials or as larger commercial deployments. At the same, traditional, sometimes decade-old, bike-sharing schemes are upgraded to include electric bikes. While China has long been regarded as the birthplace of bike and scooter sharing, the United States has recently been catching up, initially mainly in California, with Bird and Lime expanding aggressively, driven by VC investments.Electric scooter-sharing company Bird has raised US$400 million in 4 months (US$300 million Series C funding round recently announced) from the likes of Sequoia Capital, Tusk Ventures, and Greycroft Ventures, reaching a (rumored) US$2 billion valuation in its first year of existence.

However, it is the interest from ridesharing behemoths Uber and Lyft themselves that hits home the realization of how important two-wheel mobility is anticipated to become in the future. Uber participated in Lime’s recent US$335 million financing round, led by Alphabet’s GV venture arm, valuing the electric scooter company at US$1.1 billion. Naturally, Lime’s e-scooters will show up on the Uber app as an alternative mobility option. Uber also acquired dockless bike-share company Jump.

Lyft recently acquired Motivate, the largest U.S. bike-share operator, for US$250 million. It has also confirmed to be working on the integration of bike and scooter sharing options into its platform.

While electrification seems to be the biggest driver, the two-wheel mobility revolution is also firmly rooted in the dockless paradigm, allowing citizens tracking and identifying the nearest available vehicle via a smartphone app and leaving it behind wherever their journey ends, to the despair of some city governments threatening to ban this type of sharing scheme cluttering curbs, sidewalks, and other public spaces. Clearly, public space will need to be redefined to accommodate future massive uptake of two-wheel dockless shared mobility. This will be covered in the upcoming ABI Research report Smart Urban Spaces.

As far as electrification of two-wheel vehicles is concerned, the dominant “recharging” paradigm is based on swappable batteries. While convenient, it does add considerable cost for operators due to the ongoing manual replacement effort. There is limited outlook for any form of wired or wireless recharging for this type of dockless sharing schemes.

Importantly, driverless operation of two-wheel vehicles, which would only be an option for motorbikes anyway, is inconceivable due to the need for the rider to lean in proportion to the amount of steering in order to shift the center of gravity and keep balance. This precludes two-wheel vehicles operating autonomously and picking up customers on-demand, a key advantage of future driverless car-sharing fleets. However, some forms of three-wheel vehicles might yet support driverless operation in the future.

Two-wheel vehicles offer the unique benefit of being able to bypass traffic congestion, making it the fastest urban people transportation mode in dense urban areas for last-mile use cases. Importantly, electric powertrains are opening up two-wheel mobility to a wider urban audience in terms of age and fitness level while increasing convenience and practical operating radius. Moreover, cost per mile of shared electric two-wheel mobility will be a fraction of that of cars, potentially as low as 5 cents per mile.

The rush towards two-wheel mobility is happening amidst increasing awareness about the limitations of cars to address the urban mobility challenge on their own, whether through ridesharing or future driverless car sharing. It also coincides with a reality check about the readiness of robo-taxis in the wake of the Arizona Uber fatality. However, before being carried away too quickly, as both VC firms and ridesharing brands seem to be, (partially) redirecting their efforts to the two-wheel opportunity, it is important to consider inherent disadvantages of and issues with two-wheel transportation.

First and foremost, the lack of driverless operation preempts the possibility to achieve a zero-fatality environment, squarely putting the onus on other types of vehicles to avoid crashes. Between 2013 and 2016, the European Union-funded Autonomous BRAking for Motorcycles (ABRAM) project was aimed at studying and testing the feasibility of equipping Powered Two-Wheelers (PTWs) with Autonomous Emergency Braking (AEB) systems. While ADAS and/or V2X could allow for much safer operation of at least motorbikes, users of bikes and scooters will remain very vulnerable, unless urban spaces are redesigned to give them their own dedicated lanes and over- or underpasses. For operators of shared motorbike fleets, this translates into an additional cost and process burden in terms of checking driving permits/licenses during the registration process, offering some basic training, and signing up for appropriate insurance. Secondly, two-wheel mobility is not well suited for countries with frequent inclement weather conditions. Finally, adoption will also heavily depend on cultural patterns, with two-wheel mobility in regions like Southeast Asia and Southern Europe already widely established and deeply rooted in local culture, only requiring a shift in usage patterns (service and sharing mobility modes). Adoption in other regions will take more time.

However, despite the hurdles mentioned above, it’s quite clear that next-generation two-wheel mobility is here to stay, not only as a convenient last-mile complement to cars (as a service), but also as a genuine alternative and replacement of cars altogether. This multimodal shift and extension towards two-wheel mobility represents another nail in the coffin of car makers. Expect car OEMs to invest in both two-wheel OEMs and sharing operators.