“The industry isn’t a shiny new toy anymore–it’s time to focus on what's crucial for business.” – Industry Insiders #7

Augustin Friedel is a well-known expert and advisor for shared mobility and mobility transformation solutions. He works as Senior Manager at MHP–A Porsche Company. Augustin and the mobility transformation team at MHP is working with cities, private and public corporations, and authorities on today's mobility challenges, as well as on future mobility projects. "Thanks to our competencies and network at MHP, customers could implement concepts and solutions for smart city and mobility platforms in partnership with the company. We partner with our clients early on to develop the vision & strategy based on our deep industry knowledge and expertise. We create an implementation roadmap with the involved stakeholders to reach the project goals".

Fluctuo: Where does your interest in shared mobility come from?

What initially caught my attention was the impact of shared mobility on wider urban mobility. We are now seeing so many effective ways to travel around cities, which means that today my interest is more about how we can take it further. We need to have more efficient and less emission-based transport options in as many cities as possible.

What are your predictions for the future of micromobility?

In terms of operators, we have more consolidation than ever before. I think we have witnessed an increase in new operators in the last couple of years because it has previously been quite easy to get started as a new company. Due to the public attention and the hype around new shared options, it was not too difficult to find a founding team and scale the employee base. Micromobility vehicles and required software platforms for shared services are available as off-the-shelf plug and play solutions. It was also fairly easy to get funding to scale up services without putting enough focus on the business model and unit economics. Now, however, the focus is on efficiency and increasing operational excellence to have good unit economics in order to get started on the path towards profitability.

For micromobility as a whole, I’m predicting a transition from sharing to ownership for cheaper vehicle types (e.g. kick scooters–which you can get for a few hundred Euros). My view is that the affordability factor will make it more popular to own them than to share them. Look at France, their private scooter purchase numbers are crazy; the amount getting sold per annum is growing year by year to the point that we can identify it as a trend. 

This prediction leads to what I think the shared mobility should focus on to keep themselves in the loop: e-bikes. They are set to be the dominant mode in the sector for a few reasons. One is the price tag: owning an electric bike can be quite expensive. If you live in cities like in Paris or in Berlin, it can be a challenge to store them in a safe place. You don't want to have a €2,500 - €3,000 e-bike sitting on the streets of Berlin because of vandalism or theft; but with compact city-living, storing it or taking it into your apartment is not an easy feat. In my opinion, that’s a big reason that even regular users will continue to choose the shared option.

Plus, I don’t think riders will give up the electric aspect. Users prefer e-bikes; they prefer the ease that comes with the contemporary version. Shared mobility is a completely different story now than what it was at the beginning. You now get decently sized wheels, good traction, good motor support and so on. 

It's just a fact that cities like bikes more than any other micromobility device. There are other modes that have the same ease as e-bikes such as mopeds or e-cargo bikes, but I think they play more of a niche role in the shared micromobility sphere for cities. There are obviously some use cases for them, but I don't see their hyper-scaling curve in the same way that I see it for e-bikes. 

Healthy unit economics paves the way to profitability for operators. What do you think is the most crucial part in getting unit economics right?

For operators, I think what we want to see now is that they cut away the cost incentive and high investment aspects of their businesses. If you look at the energy networks that were planned, I think they're on hold because there is a lot of money needed to build them. Also, the technology of vehicles is one place to maybe cut extra costs, but not at the cost of a full focus on operations and building that operation excellence.

What will this switch from sharing to ownership mean for scooter companies in the short-medium term? You mentioned France as a good example, how do you think they will fare after the Paris scooter vote? 

There's definitely room for shared scooters. If you look at the fleet sizes like Paris (15,000 e-scooters currently), although that seems like a lot, and the companies are selling it to us as a massive loss, in the grand scheme of things and across Europe, that’s a small amount. I did a quick calculation, and if you add up all the trips and miles done by scooters in the shared mobility community, my estimate is that the Paris portion is around 0.2% of daily urban trips made by shared micromobility.

“So, I think the shared scooter market is not going anywhere, and there is still room for shared scooter operators to create sustainable businesses and grow.”

Additionally, I think that market selection is about to become more and more cautious. In the past, operators needed to be everywhere; markets were untapped and they didn’t want to miss out on a potential hotspot for their company. Instead of widespread conquering, I think operators will start considering factors like the potential room to grow their services, the current infrastructure for the vehicles and the future plans for it, and the alternative modes of travel already in place and how reliable they are. They’ll be assessing what the opportunities in each city will be in the long term, rather than short-term gratification.

If larger operators are more selective over which markets they operate in, will that open up the opportunity for regional or national operators to win market share?

It’s a difficult one. I’m not sure that this change will guarantee room for smaller companies. I think in general the demand for sustainable mobility services is huge, so it’s tough for smaller companies regardless. Smaller operators also need to maintain some of that selectivity in order to maintain a path forward. 

“You have to prioritise operational excellence and unit economics, even if you are a smaller company.”

If the full focus is on operational excellence, it is possible to save on costs elsewhere with second-hand vehicles or something similar.

What changes would you like to see in the industry?

Public bike systems in cities across Europe are getting subsidies to encourage ridership. Personally, I think it would be interesting to expand that vision beyond bikes. Maybe scooters, mopeds, cargo bikes. We’ve seen it in some cities, but more widespread adoption is definitely something I would like to see. 

Speaking of shared-bike schemes, I would also like to see them be slightly more flexible. In terms of tenders, I think that we’ve learned that being flexible and adaptable to demand is important, and I think the industry is progressing using that information. We need to move with the city, to make sure operators can adapt to where people are choosing to live and where businesses are located. 

A change I think we would all like to see is how the industry is viewed by the general public. There are a lot of negative stories or headlines about riding on the pavement, and other cases of misuse which are genuine issues. However, there are some headlines that could be labelled as an exaggeration. I’m not sure how to fix it, but I would like to see some more real and authentic discussions on the topic. 

As a final point, I think adapting infrastructure is something that is becoming really important. Pavements being cluttered is not a good look, and although fighting for space with cars in my opinion is not apparent,

“we can pre-empt a solution to those issues with good infrastructure.” 

What about in terms of car-sharing? What would you like to see from that side of the industry?

If you look at the players that are dominating the scene here in Europe, they are quite user- friendly and they're doing a lot to improve the user experience. 

More support from the cities would be helpful. If we’re talking parking costs, and infrastructure for charging, I think a hand-in-hand approach would be better than working against each other. For example, in Berlin, operators need to pay monthly fees of a couple of hundred Euros to park a shared car. When you compare that to paying almost nothing to park a car that you own, it can seem like a no-brainer. The costs are very transparent with shared mobility, so when you are charged €10 for one ride it can feel like a lot of money. But, I would say that for many people, they don’t acknowledge the long-term cost of owning a car themselves. That comparison is missing, so I think the industry needs to push that narrative so that people can understand the benefits of a shared car more fully.

Read more about Augustin’s views on car-sharing in our latest European Shared Mobility Index ⬇️

Outside the traditional car sharing, are there any particular other types of models that you see growing in popularity over the next couple of years?

Subscription-based riding. The idea of it is intriguing; not only for cars but also for bikes and cargo bikes, where regular use of the same vehicle could also be popular. I think this is an emerging addition for several of the different modes. If we’re just talking cars, then it's a model that works beyond cities as well. You wouldn't need to have a high density of cars and users to make it work. So, that's definitely an interesting area of growth that could be explored. 

Most people want to own a vehicle or have permanent access to a vehicle because they don't want to be dependent on shared transport. For those customers, an extended subscription to a shared vehicle would be a valuable option. Alternatively, if users only need a personal vehicle for maybe half the year, then a long-term subscription would potentially be the most attractive option over owning a car or using MaaS. It would be less hassle, less personal responsibility for the vehicle, and potentially cheaper than owning the vehicle yourself. It’s something I’m hoping is explored in the next few years, and it would work alongside MaaS services fairly easily. 

It could be said that shared mobility is at a crossroads. What is the biggest challenge facing shared mobility in 2023?

I’ve been in the industry for more than 10 years, but I think with any ‘crossroads’, the learning experience often leads to a better understanding of what will work and what won't. For example, with Uber, there was a spike of interest when it launched, but it then had a period where it faced a lot of issues. However, this led to the company figuring out a system that works for them and their users and resulted in overall improvement. 

Micromobility is now on the same path. There are always ups and downs for shared mobility services–the same goes for car sharing or for MaaS platforms–and 

“I think this ‘crossroads’ is normal and, over time, the industry will emerge to form a sustainable set-up.”

I see operators shifting their strategy and operations away from a high-growth mindset and short-term decision-making. The industry isn’t a shiny new toy anymore, so it’s time to focus on what's crucial for business. Adjust the mentality and refocus on what's important so that the business will survive. I think it’s a big challenge and harder than it sounds.

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