Mobility in the past century has been dominated by car ownership and creating a multitrillion-dollar industry to make the vehicles we drive. While shared mobility services in the form of public transit, taxis, and car rentals have existed since the invention of the car more than a century ago, increasing urban populations and the rise of internet-connected mobile devices are making sharing mobility assets easier than ever before in our history. The rapid growth of many shared mobility companies has forced automakers and other tech companies to evaluate the future of car ownership and what role they should play in the industry moving forward.
The COVID-19 pandemic created major disruptions in the shared mobility ecosystem, as demand for mobility dropped and revenues from mobility services fell with it. Despite this challenge, many shared mobility companies have passed the stress test, tapping into new revenue sources like food delivery, pharmaceuticals delivery, and fintech. This also led to some shedding unprofitable long-term bets related to air taxis and autonomous vehicles. Although ride-hailing and car-sharing demand fell, with the latter forcing some companies to exit the space, micromobility has seen a boom in interest as a mode of transport that allows for social distancing. Despite the challenges of 2020, many shared mobility companies are entering 2021 on a path to profitability.
As we look back on 2020, we review some of the most important developments that occurred in the Profiting from Shared Mobility storyline.
- Lime became the first dockless micromobility company to be cash flow positive for a full quarter, following Voi's profitable month, as more micromobility companies are expected to reach profitability in 2021.
- While many cities, most notably London, have restricted usage of e-scooters, sentiments changed as the mode of transit became useful as a way to promote social distancing during the pandemic.
- Uber offloaded Jump to competitor Lime and took an equity stake in Lime, as it shed several unprofitable business units.
- Didi committed to keeping bike-sharing as part of its expansion plan with a $1 billion investment, showing that after the Chinese bike-sharing bubble popped, there is still real demand for the service.
- Miovision announced a project with Atlanta in which its cameras would collect data to be used to redesign streets to be more accommodating of micromobility following several fatalities.
- Uber continued its focus on public transit integration with its acquisition of Routematch, which, in combination with its partnership with Masabi, provides a complete suite of services for public transit agencies.
- GM shut down its Maven car-sharing service, likely in part due to COVID but also in line with other automakers exiting the car-sharing space, as profitability remains elusive.
- Ride-hailing operators are grappling with how to manage emissions from their services, as the growing body of evidence that ride-hailing negatively impacts emissions will likely spur regulatory action.
- Ford's Smart Mobility division made services for public transit agencies free as the pandemic disrupted conventional operations for public transit.
- Uber continued to shed its noncore businesses in selling Uber Elevate to Joby; similar to its Jump and ATG sales, it took an equity stake in the company.
- The outlook for many shared mobility services changed at the onset of the pandemic, and our analysis of shared mobility services identified how several companies responded.
- Uber attempted and failed to acquire Grubhub, but was successful in acquiring Postmates, as it looked to diversify its mobility services outside ride-hailing.
- While few shared mobility companies are profitable, Circuit is a notable exception, and its small, efficient, affordable electric vehicles are likely a good fit for many cities.
- The landscape of shared mobility companies is crowded, with our own analysis identifying 1,000 companies active in the space, and this insight distills the most notable ones.
- Many public transit agencies failed the stress test of the pandemic drastically reducing demand for their services, and more flexible on-demand platforms are a useful tool for public transit agencies – small and large – to better manage fleets.
This blog is part of the Lux Mobility Team's Year in Review series examining the highlights and key developments of the mobility sector in 2020. For an overview of the other storylines in the Future of Mobility program, keep an eye out for our upcoming blogs and subscribe to our newsletter.