Bike and Scooter Share in the US - What is its Future?

January 25, 2024

With all of the turmoil in the shared micromobility industry since December, the question arises again - should bike and scooter share systems be supported by city, state, and federal subsidies in the same fashion that public transportation is?

When I attended the inaugural NABSA conference in 2014 in Pittsburgh, the original goal of this new industry was about finding a healthy and sustainable way to bring the public, private, and non-profit sectors together in order to provide an affordable and reliable transportation service, further encouraging people to use pedal powered, and emission free modes to get from A to B in their city.

Venture capital entering the arena of public bike sharing initially was a sign that there is a viable, and growing market for active transportation in cities, and people love the service. The problem was the economics of a slim margin business, too much hype during a low-interest rate funding environment, and venture capitalists did not understand (but quickly learned) that shared mobility, if done well, is an extension of public transportation, essentially an uninvestable business for investors looking to turn a healthy profit.

One can look at the closing down, merging, and reduction in the number of companies providing services as a negative; however, I believe this was a major reset for the market, that was long overdue. It had to happen in order to continue the growth of the sector as a whole in a more sustainable way, how it was initially intended, to be more aligned with transit, with a strong public-private partnership.

In 2024, it's very clear that we're in a completely different funding environment and there is a maturity level in the market now that I see as an opportunity to learn and grow from the mistakes made over the years (from all sides), and focus on providing a great transportation service and the stability that employees crave in mission-driven work - seeking positive impact on people's mobility, health and wellbeing, and the planet. Being a part of a particular industry that is new, innovative, and seeks to change consumer behavior, while also being a public good, requires patience, adaptability, and the acceptance that some companies and systems will fail and some will succeed, and a lot of times it is outside of your control.

So the answer is yes! If there is ever a time for pumping more public funding into bike and scooter sharing systems in the US, it is now - to further support the systems that have become incredibly valuable and relied on by both local residents and visitors alike - helping to move people around, reduce emissions and congestion, and encourage multimodal transportation. As ridership grows we’re getting closer and closer to having shared micromobility aligned and integrated with transit (especially dock based bike/e-bike systems). The risks are glaring though if cities, states, and the federal government do not financially support these systems, so that they are not tied to the market swings of VC-backed private companies and the increasingly demanding profit needs of publicly-traded companies.

Here’s where I think the market is heading (and needs to) this year:

• Longer-term and more exclusive contracts with cities, meaning a single company would win a contract for 5-7 years minimum

• Less companies competing for contracts with cities and universities

• Outside of a few large cities, the end of open permit and competitive permit markets (in the case of shared e-scooters) and a movement towards public-private partnerships

• More federal and state grants tapped for asset purchases (e-bikes and parking/charging stations in particular)

• A rise in private bike, e-bike, and e-scooter fleets that can be accessible at corporate campuses, universities, multifamily and mixed-use developments, and commercial office buildings.

• More outsourced operations - cities should not be in the interest of managing and operating shared micromobility systems, in the same fashion that separate transit agencies are created to oversee the day to day operations of buses, trains, and subways.

Let me know your thoughts!