Currently, personally owned cars and bicycles, public transport, and walking continue to dominate urban transport, but this is beginning to change. While shared on-demand mobility accounted for around eight percent of trips in megacities in 2021, this share is expected to rise to nearly a fifth in 2030. This increasing demand is reflected in the projected growth of the shared micromobility market value, which is expected to triple between 2020 and 2030, growing to 28 billion U.S. dollars. To address this emerging market, a plethora of micro-mobility start-ups have begun offering their services in cities around the world.
High competition challenges new-comers
Micromobility start-ups have been entering a highly competitive market, with many operators and an unstable operating environment. Sharing services are not yet uniformly regulated across regions, and policymakers are still deciding how and where operators can offer -them. Backlash towards this can result in whole segments of the market being banned, as in Paris, where shared e-scooters were taken off the street in 2023. Nonetheless, sharing providers have been some of the most successful electric micromobility start-ups in terms of raising funding, with Bird, TIER Mobility, and VOI Technology topping that list. However, consolidation of the market and a tighter grip of policymakers on regulating access to local markets is making it harder for newer sharing scheme start-ups to establish themselves.Instead of focusing on operating sharing schemes, some micromobility start-ups entering the market now are focusing on other areas, such as business-to-business solutions. Start-ups bidding for funding in recent years include some focusing on long-term bicycle leasing or bicycle hire to delivery riders.
Investment in a growing market
Investors have taken note of the potential of the shared and private micromobility market. Investment in mobility services start-ups, including services outside the micromobility market, totaled 18.6 billion U.S. dollars in 2021. Early-stage venture capital funding for two- and three-wheeler start-ups stood at 52 million U.S. dollars worldwide, climbing to just under 66 million U.S. dollars in 2022. Investment levels have, however, been variable. Venture capital funding had stood at a similar level in the early 2010s but dropped dramatically in the following years before shooting up again in 2019.While there is clear potential for growth for the micromobility market as a whole, it is less certain how micromobility start-ups will fare in a market with increasingly established market leaders and a trend towards consolidation, yet innovation and new product niches could continue to provide a path to success for new start-ups entering the micromobility market.
