In recent months, safety concerns and deep operating losses have cast doubt on the long-term prospects of the electric scooter and bike-share industry. American mobility networks like Lime and Bird are devouring so many e-bikes and scooters that even Chinese manufacturers worry their pace is unsustainable.
But while individual companies may struggle, such micromobility isn't doomed. For proof, we need only look to China, which already has roughly 200 million electric bicycles and scooters on its streets. If American cities can make space for electric scooters and bicycles, they can incubate technologies that will change the face of urban transportation.
Levi Tillemann is the author of >The Great Race: The Global Quest for the Car of the Future. He is managing partner at Valence Strategic. Anthony Eggert is a director at ClimateWorks Foundation, which mobilizes philanthropy to solve the climate crisis. He was the founding director of the UC Davis Policy Institute for Energy, Environment, and the Economy.
The story of micromobility starts long before electric scooters appeared in Southern California in 2017. Starting in the 1990s, Taiwan sought to promote electric bikes as an environmentally friendly alternative to dirty, 2-stroke motorcycles. But the e-bike industry really achieved scale across the Taiwan Strait, in China. From 1998 to 2005, e-bike ownership in China soared from 40,000 to over 10 million.
This boom was unintentionally fueled by government policy. In 1996, city officials began banning gasoline-powered motorcycles from city centers due to air pollution concerns. E-bikes, which eliminate local air pollution and have been shown to reduce CO2 emissions by roughly 98 percent on a per-mile basis compared to cars, filled the void. Micromobility received another boost in 2005, when an outbreak of SARS, the highly contagious and potentially fatal pulmonary virus, drove Chinese commuters away from public transport.
China now has more than 200 million e-bikes, about one for every Chinese car. China’s e-bikes have helped spawn entirely new classes of vehicles, including the electric scooters proliferating in US cities today.
In America, companies like Bird and Lime have combined micromobility with another Chinese innovation: dockless technology. In 2015, Chinese companies like Ofo and Mobike deployed fleets of bicycles that used wireless networks and apps to track vehicles on city streets, eliminating the need for docking stations. American mobility networks took this one step further by electrifying dockless bike and scooter shares.
Within a few years, micromobility will form the basis for a vast physical network of data, people, and retail. Lime and Bird hope to design, deploy, and harvest data from this project. They will also develop new vehicles that will have as much in common with today’s crude scooters as the iPhone did with its clamshell predecessors.
In fact, the iPhone is a good analogy in more ways than one. While iPhones are built in China, much of the profit comes back to US designers and mobile carriers. In 2016, the iPhone 7 debuted at a price of $649. IHS-Markit estimated that only about $8.46 went to China; the lion’s share of the value went to the US and Japan. iPhones also support monthly subscription fees, an $11 billion app ecosystem, and a massive accessories market.
Micromobility holds similar potential. The industry will spawn new business models, software platforms, subscription fees, and product ecosystems. All this will enable increased productivity, a reduction in emissions and air pollution, and massive savings in time and fuel.
Just as we have come to rely on telecommunications, we all rely on mobility. In many cases, micro will be the best way to supply this demand. This is as true in car-crazy America, where roughly 60 percent of car trips are under 6 miles long, as it is in Beijing or Manilla. McKinsey estimates that in the US, EU, and China micromobility could be a $300 billion to $500 billion market by 2030. Barclays predicts the market will be worth nearly $900 billion.
Perhaps most importantly, micromobility can be scaled with eye-popping speed. But for the US to get a piece of this pie, we need to start rethinking some fundamentals of our car-obsessed society.
American cities will need to dedicate public roads to micromobilty as they have in China, where massive protected bike lanes flank boulevards. Cyclists on 40-pound vehicles should not be forced to ride shoulder to shoulder with cars weighing 4,000 pounds. Asking them to do so is dangerous and impractical.
Policy and infrastructure are critical. Unlike transit, micromobility can thrive without subsidies. Indeed, the movement can save cities money by improving the utilization of existing roads and addressing the “last mile” challenges of urban transit systems.
If American cities follow China’s lead and make space for electric scooters and bikes, we can improve air quality and traffic congestion while slashing carbon emissions. The US can and should lead the way. If we don’t, we’ll miss out on one of the key growth opportunities of the 21st century economy.
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