If you run a search for micro-mobility on Google, the first link you will find is that of Micro Mobility Scooter Worldwide, a company founded in 1999 to reinvent urban mobility. Wim Ouboter, the inventor of micro-scooters, founded the micro-mobility system with the vision to bring about a micro-mobility revolution in the ’90s. However, he failed to do so at the time. Now, just two decades later, the micro-mobility revolution has begun.What is micro-mobility?Micro-mobility — bicycles, skateboards, skates, mini-scooters, e-bikes, small electric vehicles with one or two seats — is making headlines around the world, not only for the huge sums of money raised (over $5 billion) but also for the concerns regarding safety and operational viability of these businesses. In general, micro-mobility is defined as small transportation modes propelled by humans or electric motors with speed in the range below 50 km/hour.Solving the problem for the masses - first and last mile(s)Despite the presence of cab hailing apps such as Ola and Uber, the majority of the Indian population still travel by private or public transport — personal cars, buses, local trains, and metro. With an increase in traffic and congestion, governments have moved fast to strengthen public transport. Citizens have also switched to public transport to reach their destinations in a more predictable and hassle-free way.To give you a sense of the scale in India, everyday an estimated 25 million people travel via Delhi Metro, an estimated 7.5 million people take the Mumbai local trains, and about 4.5 million people take the non-AC bus service in Bengaluru.However, traveling very short distances — a few kilometres or less — to get from your origin to or from the nearest transportation hub is still a huge unsolved problem. A common example is walking 800 metres to the nearest metro station or from the metro station to your workplace or home.Here's where scooters, e-bikes, bicycles, and other personal transit offer consumers a compelling alternative to bus transfers, pricey ride-hailing services, and long walks on India’s pedestrian-unfriendly streets, because of their low prices, predictable speeds in cities (often faster than driving), and on-demand availability.“Growing traffic congestion and longer urban commute durations have led to people scouting for alternative ways to reach their destination in the most convenient, affordable, and time-efficient manner. With public transportation improving in Indian cities, startups are finding innovative solutions to build effective first-mile and last-mile connectivity. We are excited about the prospects of partnering with startups shaping the future of mobility and possibly disrupting ownership of vehicles going forward.” — Vani Kola, Managing Director, Kalaari CapitalIn the US, micro-mobility company Lime reports that its top urban markets see 40 percent of trips starting or ending at public transit hubs in addition to contributing to an overall 25 percent increase in bike share trips in 2017.“Congestion in major Indian cities is much higher than comparable mega cities in Asia. We believe scooter sharing is the right model to help solve this. The vast majority of commute in India is in the micro-mobility segment — under 10 km. Scooter sharing fits the bill here, providing a hassle-free, affordable easy-to-use solution alternative for consumers of all demographics. This works across use cases — be it first or last-mile feeder to public transport, short intra-neighborhood trips or daily commute.” — Anand Ayyadurai, CEO, Vogo RentalsSolutions around the worldVarious micro-mobility startups have sprung up in the last couple of years, primarily in China, US, and now in India. All have focused on the same problem. However, they have different modes/forms suited best to the culture, road conditions, and local regulations. There are two business models — self-serve scooters or scooter rentals (the more popular one), and bike taxis.China, where bicycles have been a preferred mode of locomotion since the early 1890s, has seen the birth of multiple bike sharing companies, notably Ofo (total funding of $1.3 billion), Mobike ($949 million), and Hellobike ($1.52 billion). Of course, it is important to note also that all these companies have had their share of ups and downs, with Ofo being at the centre of them all.In the US, mini-scooters are the most popular choice of commute, with Lime ($754 million) and Bird ($418 million) being market leaders. Uber has also made its presence felt by acquiring JUMP Bikes ($19.5 million) and tying up with Lime to make it available on its app.India saw a wave of bike taxis in 2015 with Rapido, Baxi and 15+ startups in this space. Ola and Uber also launched their versions. Still, given the heavy discounts offered on rides, most startups with limited capital were unable to survive. Rapido was the only one that came out stronger and bigger.“People prefer good experience compared to discounts for a product like bike taxi as it’s already in the affordability range and it is something that they use for their commute purpose on a daily basis. We focused on the customers’ needs and concerns, and developed our product accordingly, which helped us scale much faster. Bringing a new mode of commute to this country needs more focus, and for us bike is core and we are trying to do it best. Focus on safety helped us gain trust with the user.” — Aravind Sanka, Founder, Rapido Bike TaxiCome 2018, a number of cycle rentals companies were started. Ofo launched in partnership with Paytm, Yulu Bikes was launched in Bengaluru, and the well-funded Zoomcar also launched its version Pedl. Later in the year, the scooter rental market saw a funding explosion with two large players emerging — Vogo ($108 million), backed by Ola, Matrix, Kalaari, and Stellaris; and Bounce (earlier known as Metrobikes) ($24 million), backed by Accel and Sequoia Capital. There are other players as well - Onn Bike ($7 million) and Y Combinator-backed Wheelstreet.“We believe that dockless scooter sharing is logically the solution that is most scalable and the best solution which will work in countries with scooter culture. The obvious benefit of the solution is also the biggest challenge. Not having a driver to the vehicle means it’s an execution game supported by tech and operations. Understanding the nuances of each demography plays an important factor in winning or losing the game. A copy paste solution won’t work in dockless sharing solution irrespective of the form factor. — Vivek Hallekere, Founder, BounceVenture capital bets in India - The cat and mouse game has startedTraditionally, transport technology companies have required a large amount of capital and the new wave of mobility startups will be no different. Vogo has taken an early lead by raising a large round of $100 million, a combination of equity and debt, and aligning itself with Ola (you can book a Vogo from Ola’s app). As mentioned earlier, Uber also entered into a similar partnership with Jump and Lime; it later acquired Jump.“Servicing the micro-mobility needs of any city requires the solution to be nearly ubiquitous. It’s simple; the more the scooters, the closer and more relevant it is to consumers. Across the world, the growth of the micro-mobility space has been about building out larger and more reliable fleets. This is particularly crucial for dense and congested Indian mega cities. At Vogo, we’ve built strategic partnerships that solve for this by adding lakhs of vehicles in a short amount of time.” — Anand Ayyadurai, CEO, Vogo RentalsEven though, Bounce has raised a smaller amount, it has marquee investors such as Accel and Sequoia who are investors in global micro-mobility giants such as Bird, Lime, Ofo, and Mobike, who have collectively raised in excess of $5 billion, giving it the muscle power to go against the Vogo-Ola partnership.Yulu Bikes, led by seasoned entrepreneur and Inmobi Co-founder Amit Gupta, with its cycle-first approach has shown considerable traction with an estimated $7 million it raised from a clutch of Indian (Blume Ventures, 3one4 and others) and international VCs.It seems large pools of capital will be poured in to drive demand and invest in supply and product, and solve India-specific problems. Global behemoths such as Ant Financial/Alibaba, Uber, and Didi, who have been active investors in global scooter companies, are still on the sidelines, waiting to find the right partner and time to get a piece of this pie.Electric vehicles - driving unit economics in micro-mobilityThe single largest bet that these new-age startups are taking is on electric bikes -- pedal-assisted cycles or e-scooters/e-bikes.A standard two-wheeler in India (say Honda Activa) is in the range of Rs 35,000-Rs 60,000. Fitting it with IoT devices costs about Rs 7,000-15,000, which makes these two-wheelers very expensive. To add to that, these scooters have an average running cost (including maintenance) of around Rs 1.7 -Rs. 2.5/km.An alternate solution all micro-mobility startups are exploring is electric vehicles — from procuring directly from OEMs based in China and Japan, or working with them to create vehicles more suited to the Indian market. Typically pedal-assisted bicycles cost as low as Rs 15,000 and can go up to Rs 30,000. The average running cost (including maintenance) is around 20 paise to 40 paise/km, which makes e-bikes/scooters or pedal-assisted cycles a very viable business proposition.“Electric vehicles are the perfect solution for micro-mobility — they’re green, easy to maintain, and have much lower running costs. Given the nascent nature of the electric vehicle market in India, financing them is the key challenge in building a large fleet. We’re working closely with our strategic partners, OEMs, and other players in the electric ecosystem to bring a large and reliable network of electric scooters to consumers in the near future.” — Anand Ayyadurai, CEO, Vogo RentalsThe two-wheeler segment, in fact, has gained a headstart with companies such as Hero Electric, Electrotherm, and Ather Energy selling electric scooters in India. The mainstream companies, though, are yet to launch their own electric two-wheelers.Across the world, battery costs for electric vehicle are falling and are expected to continue to drop moving forward. Lower manufacturing costs will make electric bikes and scooters more affordable, allowing sharing platforms to scale their systems more cost-effectively. This, along with the government’s thrust on electric vehicles, and allowing private charging stations coupled with investments in public transport, primarily metro, will transform the landscape of mobility. Challenges: is this sustainable in India?Cities need infrastructure Indian roads and cities are not among the most well planned in the world. The rapid pace of urbanisation means cities constantly outlive their infrastructure. Most roads in cities don’t have sidewalks or dedicated cycle lanes. This, along with low regard for road safety, makes two-wheelers the most dangerous mode of transport in India. The numbers speak for themselves: 31.6 percent of all road mortalities in India are on two-wheelers.“Citizens, corporates, and city authorities (government) need to collaborate to bring this change to our big cities. The government needs to contribute by building infrastructure for dedicated lanes for non-motorised transportation (bicycles, microlight scooters, etc), provide space for their parking, and build pedestrian-friendly footpaths. [Micro-mobility must be augmented with public transportation, and] awareness and policies that incentivise stakeholders in its adoption.” — Amit Gupta, Founder, Yulu BikesAccessibility and operationsLike all mobility systems, management of the fleet can be difficult. Supply of vehicles may not be readily available at all points within the city or not be dispersed equally, which could lead to a sub-optimal experience for the user. Theft and VandalismVandalism and theft have been a problem in many cities where these services have been launched. Existing players have faced issues like missing helmets, while some bicycle sharing companies have had their bicycles stolen. These startups are hoping that this will wear off quickly as the community comes to love the service.Regulation — it’s complicatedThere are no laws that explicitly govern dockless mobility services in India. In China, lax regulation around dockless bikes allowed companies to pile in and aggressively expand, leading to an oversupplied, mismanaged bike-sharing ecosystem. In the US, dockless electric scooters are now littering streets and sidewalks in a number of cities, as e-scooters are largely unregulated. State governments in India have to be wary to not over-regulate but create an environment for these startups to serve the customer and solve the urban transportation problem.Next unicorn?“Just like Amazon sells third-party goods, we’re going to offer third-party transportation services. We want to be the Amazon of transportation.” — Uber CEO Dara KhosrowshahiSimilar to ride hailing, bike and scooter sharing is a land grab. Outside of price, users care most about convenience, which can only be achieved with efficient supply. All micro-mobility companies will evolve into multi-modal transport options and will become part of the larger transportation companies — Uber, Ola, Grab, Didi, Go-Jek, and Lyft — either via partnership or via acquisition. Micro-mobility may be trending, but it appears to be much more than just a short-term concept. With benefits to the quality of life in urban areas and a clear ethos of inclusiveness, this cost-effective mode of transportation could be one answer to the urban transportation crisis.