Mobility Discussion at Fortune’s Brainstorm Tech International 2017

  • December 14, 2017
  • Scott

Following is a post about the Mobility Panel I attended at BSTI 2017:

Participants: Davis Wang, Co-Founder and CEO, Mobike; Sam Zaid, Co-Founder and CEO, Getaround; and moderator Clay Chandler, Time Inc.  I’ve previously read a bit about how bike sharing startups are growing faster than ride sharing companies, how the competition is potentially even more heated, and how they might actually be more important than ride sharing.

Mobike is one of several of these well-funded bike sharing startups in China.  They are now in 200 cities, including Berlin, Rotterdam, and Washington DC.  Meanwhile, GetAround is a consumer-to-consumer marketplace for renting out one’s car to other people (not unlike renting out a room via Airbnb).

There was some joking between the companies about GetAround needing $100B to roll out this service but there is a key difference between these businesses.  GetAround doesn’t invest capital in acquiring cars.  They set up the marketplace for regular people to rent out their own cars.  Mobike doesn’t make it possible for you to rent your bike out – they make it possible for you to rent their company-owned bikes. So there is a reasonable capital outlay even if the bikes are only $150.

Already, Mobike has 10s of thousands of bikes in many cities.  My impression is that they think of it like a public utility – provided by a private company.  Think of it like public transportation – a subway. Critical infrastructure to the healthy movement around a city.  These public-like services need to work well with government authorities and work to build an ecosystem with other transportation services.  Keeping in mind that for 2-3km, bikes represent among the fastest transportation options, so bike sharing may form a good “last mile” solution for many partners.

Challenges lay ahead however: US cities often have formal partnerships already with bike sharing companies – often based on bike sharing stations.  It may be difficult to unseat some of these partnerships, which may be long-term in nature.  There was a fun discussion about customizing bikes to different geographies – in particular having taller bikes for Holland!

For GetAround, I think one of the most interesting insights regarded the utility of general purpose vehicles versus specialty vehicles.  Sam made the point that when you buy a car, the Toyota Camry has a compelling value proposition: it does a little bit of everything. You can use it for daily commute, or for a vacation, or for grocery shopping or carting the kids around.  But the Prius is a better daily commuting car, a Jeep might e better for skiing, and a minivan might be better for carting the kids around.

The insight Sam shared, was that when we’re BUYING we typically will buy for that generalized utility – the Camry.  When we’re RENTING – we typically rent for a specialized purpose – that road trip. The ski trip. Taking a lot of kids somewhere.  It’s very specific. And so on GetAround, the cars that rent the best are not the most popular SELLING cars.

And that insight informs a lot about the bikes in bikesharing platforms, the cars in car rental fleets, and the buying decisions we make.  In essence, those general cars are good for the car rental fleet owners. But as renters, we might well prefer the specialized cars.  I think everyone in the room is hoping that this might indicate that in the future we’ll have more interesting/specialized car designs.

Meanwhile there was an interesting question about market share and shakeouts in the bike business. Mobike seems to be going strong – but Bluegogo just went under (the moderator quips: Blue Gone Gone?).  I have to think the remaining players are happy to see other competitors go by the wayside as it will allow them to introduce healthier pricing and margins.  Mobike refers to the competitors as “the other color bikes”.  Mobike’s CEO says, essentially, look, this is a long-term business with no short-term payoff because each rental is cheap and bikes last for 5 years.  They believe they’re in the driver’s seat, so to speak, because of their head start.

Sam and GetAround are still evaluating entry into the China market.  He thinks that 2 wheels plus four wheels is a good combination – maybe you take the bike to the car, and the car to work. Or the car to the parking lot and then a bike the last mile. Both cases are interesting, and lots of opportunity for cross-pollination.

In Austin we’ve had B-cycle for some time now, and it has been a welcome addition to the landscape of downtown mobility. However, it looks to me like the world-stage for bike sharing may well be driven by the big global players – which is perhaps a bit surprising. I think most people (myself included) didn’t think of a national or global player in bike sharing as a viable business model – more of a great social good. But perhaps it is both.  We live in interesting times!



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