By Rajarshi Rakesh Sahai, Partner for Mobility Sector, Ennea
Governments and private sector have to work together to meet the future mobility challenges of our cities. Clear rules of engagement can enable collaboration, while protecting the consumer interests and safety.
What makes it different this time?
Disruptive mobility companies like uber have often been criticised for ignoring local regulations or having a differentiated and ad-hoc approach to cities on the basis of prevailing rules and response from regulators.
On the other hand, cities and national governments, and the regulators therein, have often been slow to move enabling regulations, or worse have had either a heavy-handed approach to ban anything new or an extremely light-handed approach that caused accidents and painful disruptions in our cities.
Often the lack of specificity and timeliness from regulators and the desperation on the part of e-kick sharing operators have caused situations where premature launches were made, forcing knee-jerk reactions like blanket bans from the regulators, or worse: the instances of accidents, injuries and deaths with victims having no recourse to corporate insurance or regulatory compensation.
Germany has indeed acted on the above by preparing a detailed ‘Ordinance on the Participation of Small Electric Vehicles in Road Traffic’, acknowledging the advancements in Personal Light Electric Vehicles (PLEVs) in recent years and the apparent gap in mobility options with more and more cities banning the use of particularly diesel vehicles in the inner cities of the country.
“Vehicles with electromotive drive shall be approved for use on the public road if they meet the following technical requirements: handlebar or stanchion | maximum design speed of at least 6 km/h up to a maximum of 20 km/h | power restricted to 500 watt (1400 watt for self-balancing vehicles) | compliance with minimum requirements of driving dynamics”
E-kicks or electric kicks, often called electric scooters or e-scooters in the USA, are light electric (usually 2-wheeler) vehicles for individual use. The German ordinance specifies the category as Personal Light Electric Vehicles (PLEVs):
In my opinion, the following is key to progress:
- Clarity on specifications and performance requirements of PLEVs: This move ends the possibilities of changing goal-posts by regulators or influential parties and pressure groups, often driven by monopolistic interests. It is now possible for multiple hardware and operation plays to simultaneously compete under well laid out rules of engagement, as specified in the ordinance.
- Moreover, this reduces the uncertainty around the business of micro-mobility and the risks around inventories of vehicles which, earlier, might or might not meet the regulations. The clarity has clear advantages in the form of reduced premiums for insurance at each stage, more conventional finance available at cheaper rates, better forecasting of business matrices, etc.
- Sanctity of the ordinance, particularly for public companies and accountable organizations: Until now there has been a cloud of suspicion around shared mobility and particularly the micro-mobility kinds. It is now possible for large publicly listed companies, public companies and city municipal governments to partner and co-develop solutions with micro-mobility operators, duly licensed by the German government.
- The tone and tenor of the document: The document clearly lays out the need for PLEVs while maintaining the supremacy of pedestrian movements and laying out a collaboration guideline for cities and bicyclists to work with, and not against, the PLEV riders.
The positive effects of the above have already stated showing:
Sixt has partnered with Tier mobility: This allows Sixt to now expand its shared car/rental car services to the last-mile on e.g. Automobile traffic restricted streets/zones. Meanwhile, Tier will instantly have access to the user base of Sixt in major German cities.
Tier mobility has further gone on to list in municipal transport company apps in Berlin (Berliner Verkehrsbetriebe) and Munich (Münchner Verkehrsgesellschaft), fresh from the fully legal status that the ordinance has accorded to them.
Circ has signed a partnership agreement with Herne, a city in North Rhine-Westphalia, to offer e-scooters for rent. The certainty around vehicle specification and legal/permitted usage will allow for a cheaper insurance case and a predictable rental model with lesser chances of abuse by all parties.
Voi plans to operate initially on outskirts of the city in co-operation with Hamburger Hochbahn.This is an interesting application of e-kicks where public -private partnership is being used to extend the reach of mobility/public transport in the suburbs unlike the usual dense city zones application of e-kicks. Coupled with scooters onboard public transport and long-term/rental/overnight rates, this can become an interesting use case.
What more can be done? What more is possible?
Hamburg’s intent to integrate e-kicks in its ITS (Intelligent Transport System) strategy, partly with the intent to showcase such advancements in the upcoming 2021 event, is a welcome move. More cities need to work with all the licensed providers and develop normative and functional agreements to make this a success. Sharing of plans for e.g. car-free zones and mega events with operators on a common data platform will allow for a coordinated response to the demand challenges of each city.
The partnership of Sixt with Tier is only the surface of possibilities of cross-integration and collaboration between a wide variety and hierarchy of modes and operators thereof. Common data sharing protocols and trust in the power of positive networks effects of integration will go a long way in creation of a truly last-mile and MaaS (Mobility-as-a-Service).
Cycling groups remain suspicious and wary of the e-kicks boom. It will be interesting to see how operators bridge this distrust and hopefully work with cycling interest groups to e.g. create a bigger push for and possibly a collective fund for the improvement of shared infrastructure for bicycles and e-kicks. While the ordinance conceives some areas of conflicts and prescribes basic rules of engagement, a collaborative effort may well define the etiquette for sharing of such infrastructure between the two modes.
For hardware innovators, the clearly laid out rules should work as a boon. It has long been realised by micro-mobility operators that the conventional Segway-ninebot e-kick form factor may have limitations. Iterations have indeed emerged in form of 1-seater scooters like ojo, Yulu, Mobycy Zypp etc. (and of course the 12+ futuristic form factors by Segway itself) to expand the diversity of form factors, but more can be done on durability, desirability, versatility, and accessibility of the vehicles.
The blurred lines between renting, leasing, sharing and owning are already showing in the new partnerships and operating models of the existing micro-mobility players. I do see further innovation on the front as the biggest challenge i.e. hurdles in regulatory approvals becoming a thing of the past.
Rajarshi Rakesh Sahai is the partner for the Mobility Sector at Ennea with more than 14 years of field experience in urban planning, smart cities and sustainable transport. Ennea is a venture capital and M&A advisory firm specialized in travel and mobility whose goal is helping travel and mobility companies transition from startup to major enterprises.
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