California's Micro-Mobility Movement Has e-Bike and e-Scooter Companies Competing For Market Share

Image provided by Unsplash

This post contains sponsored advertising content. This content is for informational purposes only and is not intended to be investing advice.

With a population of more than 39 million people and a population growth rate of 6%, California has dealt with a serious congestion problem for decades. According to TRIP, a national transportation research nonprofit, congested roads cost Californians $28 billion per year in fuel waste and time lost to sitting in traffic. To address this expensive and frustrating problem, California passed the Road Repair and Accountability Act of 2017 (SB 1) allocating $54 billion over 10 years to decrease congestion and improve California’s transit system. 

That includes $1 billion to fund the Active Transportation Program that will go toward adding new bicycle and pedestrian lanes, expanding and improving the safety of existing lanes, and funding micro-mobility initiatives that make nonmotorized transportation more accessible and more attractive to Californians. This isn’t just happening in California, cities around the world, like Paris, Berlin, and Seattle, are also investing in micro-mobility infrastructure. 

As more and more cities launch pilot programs and transition to permanent micro-mobility programs, leaders in the light electric vehicle (LEV) space are racing to deploy thousands of bikes and scooters across California cities. Here are some of the latest developments in California and which companies are benefiting from the surge in demand for motorized vehicle alternatives.

The Micro-Mobility Surge Across California

Since the passage of SB 1 in 2017, California representatives have debated how best to spend that $54 billion. While some want to add new lanes to freeways and otherwise invest in expanding car capacity on California roads and highways, a growing number of representatives and advocacy groups are pointing toward the flaws in that thinking. Namely, the phenomenon of induced demand means that adding lanes might only worsen congestion, possibly making it an ineffective approach to combating traffic in the state.

Meanwhile, in 2019 alone, 136 million shared micro-mobility trips replaced as much as 45% of car trips. Not to mention, with the growing trend of permit-based programs, cities are able to generate revenue from application fees, permit fees and other charges to the companies that want to add their fleets to the city — making this not only more affordable than highway expansions but also a means of raising money that can be invested into further adapting cities to be more bike, scooter, and pedestrian-friendly.

In Los Angeles, the largest dockless mobility program in the country was launched that same year. About 37,000 ebikes and scooters were released into the city. Because they don’t need to be docked at any particular station, residents can simply pick up an ebike or escooter whenever they need and park it wherever when they’re finished with it. This dockless system makes it more convenient and more flexible as users don’t need to search for a docking station near their destination.

Through the program, 3 major micro-mobility leaders — Lime Technologies AB LIME, Spin, and Bird Global Inc. BRDS — received permits to release their ebikes and escooters in the city. Together, those 3 account for 22,500 of the 37,500 light EVs in the program. Wheels, Jump (now owned by Lime), and Lyft Inc. LYFT together added another 9,000 bikes and scooters.

One year later, L.A. believes its pilot program has been a resounding success. The 37,500 bikes and scooters logged more than 10 million rides that kept an estimated 1,802 metric tons of CO2 out of the air by reducing motorized traffic. About 44% of L.A. riders reported driving less often thanks to the micro-mobility program. 

Pilot programs in other California cities saw similar success:

• In Santa Monica, 2,500 light EVs logged 2.7 million trips, with 49% of those trips replacing trips that would have otherwise been made by car.
• In San Francisco, 1,250 scooters logged more than 240,000 trips in 5 months, replacing an estimated 40% of car trips. The Bay Area also has plans to expand its ebike fleet to 14,200 over the next few years.
• In Oakland, a successful adaptive bike-share program made the city one of the first to expand access to shared micro-mobility fleets to people with disabilities. 

In 2019, the state senate also passed SB 400, which expanded the state’s existing Clean Cars 4 All program to include ebikes and bike-sharing programs. With the expansion, Californians who meet the income requirements can receive vouchers covering all or part of the cost of buying their own ebikes or subscribing to a bike-share or other micro-mobility program. 

In San Francisco, for example, residents are eligible for grants of $7,500 to put toward ebikes and bike accessories or toward shared micro-mobility programs and transit passes.

As part of citywide shared micro-mobility programs and statewide electric vehicle grants, it’s not just the light EV manufacturers that will benefit from the millions of dollars going toward incentivizing Californians to switch to these safer, more eco-friendly forms of transportation. Component and accessory makers also stand to benefit. 

The Split Belt from Veer, for example, is a widely compatible carbon fiber belt drive that offers a smoother, safer, more durable alternative to the metal drive chains that are the current standard. Bike-sharing fleets see a lifetime of usage in 6 months vs the 2 years the average bike would see. This means the need for more durable components, like Veer’s belt drive, will be a necessity with the changing mobility efforts.

According to Veer, not only could it sell its proprietary Split Belt to manufacturers as they accommodate California’s growing market by scaling production and looking for longer lasting alternatives to metal drive chains, the company can also sell directly to consumers. Those consumers, who may now qualify for California’s SB 400 voucher program, can use state grant money to customize their new electric bikes.

As Veer works to meet growing demand and increase the rate of adoption of its new carbon fiber belt technology, especially among manufacturers, it is also closing out a crowdfunding campaign to raise additional capital to support its growth and ramp up production.

This post contains sponsored advertising content. This content is for informational purposes only and is not intended to be investing advice.

The preceding post was written and/or published as a collaboration between Benzinga’s in-house sponsored content team and a financial partner of Benzinga. Although the piece is not and should not be construed as editorial content, the sponsored content team works to ensure that any and all information contained within is true and accurate to the best of their knowledge and research. Benzinga may receive monetary compensation from the issuer, or its agency, for publicizing the offering of the issuer’s securities. This content is for informational purposes only and is not intended to be investing advice. This is a paid ad. Please see 17b disclosure linked in the campaign page for more information.