Micro-mobility impact and opportunities by CRE sector in USA

Micro-mobility generally refers to single occupant modes of transportation such as bikes and electric scooters (e-scooters).

E-scooters and bikes, referred to as micro-mobility, are reshaping transportation in cities around the world. The future of transit is filled with lightweight electric vehicles giving people the ability to travel and move quickly and cheaply. Micro-mobility is one of the fastest growing transportation trends in recent history in terms of adoption.

Bike sharing has grown at more than a 14 percent compound annual growth rate (CAGR) over the last five years. However, the adoption of e-scooters has surpassed this - capturing 3.6 percent market share in the almost 150 U.S. cities where they operate since their launch in late 2017.

Both have disrupted ridesharing services for short trips, which isn’t surprising since 46 percent of car trips in urban areas are less than three miles¹, and micro-mobility options are often more convenient than taxis, public transportation or walking. They can also be cheaper - Quartz estimates that an e-scooter ride is $3 to $4 cheaper per ride for a one- to two-mile trip compared to a ridesharing trip.

Consumer- and city-level impact

The increased availability of micro-mobility in cities has had an impact on consumer behavior. According to a recent NACTO survey, riders primarily use micro-mobility to travel to and from work and to connect to public transit. Because of this, many major cities have added bike and e-scooter lanes to ease pedestrian traffic on sidewalks, a trend expected to grow at a fast pace. At the city level, an increase in public transportation can result in increased transit-oriented development (TOD) premiums for real estate. In addition, the use of micro-mobility modes increases the “walk” or in this case “micro-mobility” zones around public transit modes. This enables the TOD premiums to be felt across a wider area and by more properties.

Consumer behaviors differ by mode of micro-mobility. Bike riders who pay annual fees primarily use the service on weekdays, with the number of rides peaking during rush hour, typical of a commuting pattern. E-scooter use is greater on the weekends and evenings, signaling that e-scooter use skews towards social and recreational use.

Cities are faced with some challenges that have arisen from the increasing popularity of micro-mobility. One major concern for cities is the number of dockless e-scooters piling up on sidewalks, leading some to add designated parking for e-scooters to alleviate congestion. For example, in-street zones have been created for dockless e-scooters and bikes in Santa Monica, California. And, in Washington D.C., street corrals have been created by repurposing on-street parking spaces.

Additionally, some cities are managing increased congestion by turning to geofencing, a virtual perimeter that limits where scooters can be driven and parked. In San Jose, California, geofencing is being considered to deactivate scooters when they’re on sidewalks and reactivate when they are in bike lanes. In Santa Monica, Bird, an e-scooter sharing company, created a speed zone that geo-speeds scooters down to a maximum speed of 8 mph (from 15 mph) on beach bike paths.

Cities have begun implementing rules to regulate operators in their markets, which has resulted in a new source of revenue generation for municipalities. Some of these regulations have resulted in permits and/or licensing fees, with others including per trip and per vehicle fees. Relocation and vehicle impoundments have resulted in some hefty fines.

Despite the various complications that e-scooter sharing has brought to some cities, the public views them as a viable alternative for short-distance travel. According to a recent Populus survey of more than 7,000 individuals in 11 cities, support for micro-mobility is strong with more than 70 percent of those surveyed having a favorable opinion. Other forms of transportation, including bikes, ridesharing and public transit, garner approximately 50 percent positive consumer sentiment on average, illustrating the popularity of e-scooters.

Adoption timeline

The pace of adoption depends on three preconditions being met: acceptance, convergence and scalability. These, in turn, depend on a variety of factors—regulatory and environmental factors remain wild cards (e.g., legal restrictions and labor disputes) as do declining overall travel demand (teleworking and eCommerce), growth of other mobility options such as the e-scooter, public transportation and increased congestion. All these inject significant uncertainty into the actual trajectory and direction of change of micro-mobility.

Safety, technology development and regulation will pose significant barriers to widespread adoption.

Implications for CRE

Investors and occupiers can prepare for the coming disruption in the near- and mid-term by redesigning and repurposing space to make room for micro-mobility parking and storage.

Current acceptance levels

• Medium acceptance
• Safety for the rider and pedestrians is a concern
• Affordable

Convergence with technologies / infrastructure

• Usability in adverse weather conditions
• Limited ability to multitask (check phone, answer calls, etc.)
• Curb space and parking issues due to dockless nature
• Vandalism, theft and maintenance are still issues and the business model is yet to be proven

Estimated time frame for widespread adoption

• Immediate and escalating impact

Micro-mobility impact and opportunities by CRE sector in USA