Heading East! Identifying market opportunities in Eastern European countries
20 April, 2021
Don’t be taken for a ride with images of snowy landscapes and horse-drawn carriages, the Baltics and Poland are welcoming markets for shared mobility services. Those countries have turned to innovative car alternative solutions early on. They also have given birth to some of the most dynamic shared mobility companies in Europe.
Estonia is home to Bolt (ex Taxify), one of the global mobility leading companies, offering ride-hailing, shared micromobility and food delivery services. Born and bred in Lithuania, Citybee is a world pioneer in car-sharing. Poland is an early adopter of bike-sharing, where dock-based systems are available in most cities since 2010.
Hence, no wonder if leading international operators are now coming to compete with dynamic local start-ups. But they have to know where they are landing. So let’s try to map this market and to identify its specificities.
Discover the champions of the Baltic countries
For those who do not know, Estonia is THE digital nation, turning its state into a digital platform to help its citizens and companies – with a focus on start-up’s development. Bolt’s success is the result of such a policy. The company grew in size and range of services: born in 2013, it is now present in 43 countries (mostly with ride-hailing services), and operates shared scooters in more than 50 European cities, including more than 20 in the Baltics and Poland. Tallinn, the only Estonian city hosting other operators, has its shared scooter market split between Bolt and Comodule, another local success that operates under the Tuul brand. Citybee is the last active operator there. If the company chose to stop its scooter service, it still operates around 300 shared cars.
Citybee is actually Lithuania‘s pioneer and leader in shared mobility. As the sole local provider, it has expanded steadily since 2012 to offer shared bikes, scooters and cars across the Baltics and Poland, but also in Madrid (Spain) where it launched scooters. But the COVID crisis seems to have had a strong impact on the company, who chose to stop (temporarily) all of its activities in Poland, and to put on hold its scooter and bike sharing services in the remaining countries. Apart from Citybee’s cars, Bolt’s scooters are therefore the only other shared mobility option in the country.
Stuck between Bolt’s Estonia and Citybee’s Lithuania, Latvia is hosting a competition between those 2 companies and a bunch of dynamic local operators who are making Riga the most eclectic shared mobility market in the region. There are around 1,200 scooters available in the Latvian capital, between Bolt (500 scooters), and locals Fiqsy (500 scooters), Jungo (150 scooters) and Kong. Ride operates 100 throttle e-bikes (meaning that you do not need to pedal), and Skok 200 mopeds. Finally Citybee, Fiqsy and Carguru are operating 250, 100 and 35 cars respectively, completing the diversified shared mobility offer. But the rest of the country is pretty much left apart, with only 100 Bolt scooters available in Daugavpils and Liepaja.
In Poland, local operators and international companies are competing fiercely
Poland is the interface between Western Europe and the Baltics and is therefore influenced by both sides. Focusing on scooters, it is the furthest Western companies went to, with Lime operating in 5 cities across the country, Bird being live in Krakow, and Dott in Warsaw. Apart from Warsaw and Krakow, most of the Polish cities are covered by Bolt (20 cities), and the local leader Blinkee.city (21 cities) with small fleets though.
As already mentioned, Poland has a long history with dock-based bike-sharing. If Nextbike, which owns 86% of the market, is now competing with some local dockless operators such as Geovelo or Roovee, the sector suffered a lot from the controversial governmental decision to close all the bike-sharing services in Spring 2020, because of COVID-19.
Blinkee.city is by far the leader in moped sharing, operating 80% of the vehicles nationwide. Along with scooters, their vehicles are available across many middle-sized cities, “giving access to share mobility options to 20M citizens” according to the co-founder Paweł Maliszewski. EcoShare and Hop.city (who have withdrawn from many cities) are the only contenders in this very local market, which still has to reach its full potential as the most important fleet is the 210 mopeds operated by Blinkee in Warsaw.
But as confirmed by Adam Jędrzejewski, founder of the association Mobilne Miasto who promotes new mobility services and related technology development in the country, “Poland remains a car-centric country, where shared mobility users are keener on picking a car”. One figure from Bolt’s GM for Poland Valerii Romanov: 91% of people pick cars over scooters in the app. Car-sharing leaders are Traficar which operates 1,700 cars across 9 sites (or metropolis), and Panek which operates 2,000 cars across 250 cities. Electrification is the next challenge, but don’t think that’s going to be easy. The two major initiatives in the country have failed. Vozilla, a unique public-private partnership between the city of Wroclaw and operator Enigma, has stopped in early 2020 after 3 years of service. And very recently (March 2021), operator InnogyGo has stopped operating its fleet of 500 BMW i3 in Warsaw, blaming the impact of the pandemic.
Taking into account local specificities
The GDP per capita of the four countries being a bit lower than in most Western countries, the amount people are willing to spend on transport is therefore affected. Whatever the vehicle type, prices are overall proportional to the GDP/capita: the average e-scooter ride will cost between 0,13€ and 0.15€/minute in Poland and the Baltics, compared to 0,20€/minute in Berlin or 0,23€/minute in Paris. Operators have to adapt their pricing to attract a substantial user base, but on the other end, they need to maintain their economical sustainability. The slightly lower labour cost helps nonetheless to keep the balance.
The colder winters of Poland and the Baltics also have a significant impact on the operations. Most of the operators chose to store their electric vehicles during the coldest seasons, limiting the annual revenue. As an exemple, Nextbike Polska services are closed every year from November to April. The trend seems however to change to temporary withdrawals in case of exceptional weather conditions (snow, black ice): Bolt’s scooter fleet remained in the streets during the mild 2019/20 winter in the Baltics, but had to be stored for 3 months in 2020/21. Others, such as Comodule and its Tuul scooters in Tallinn, choose to maintain their fleets on the streets all year long. A good way to test vehicles and batteries behaviour in freezing temperatures, as well as the customer willingness to ride in such weather. In Poland, where Bolt’s scooters were also available through the winter season, Valerii Romanov confirms that “it allowed us to observe some trends that show how Poles use scooters every day. Of course the number of trips increases with the temperature”.
An ever-evolving industry
Maybe more than in other parts of Europe, the pandemic had an important impact on the shared mobility usage, resulting in less services available in 2021. In Poland, “the government decision to close bike-share service to prevent COVID spread definitely sent the wrong message”, agreed both Paweł Maliszewski and Adam Jędrzejewski. Operators – whatever the vehicle type – are still struggling to get back to their initial ridership figures. Moped operator Hop.city chose to stop almost all of its services to focus on B2B services. In the Baltics, multimodal operator Citybee chose to stop its scooter and bike sharing servicing (apart from the 200 bikes available in Kaunas), to focus on cars. The company’s CEO Kristijonas Kaikaris is nonetheless optimistic about the car-sharing future in the region, and after cutting down its Lithanian fleet by a quarter, “plans to expand its fleet to 1,500 cars, and to double the Estonian and Latvian fleets to 600 cars each”.
Upcoming regulations changes should help shared mobility services to thrive, especially in Poland. New legislation is currently under discussion to place e-scooters in the Highway Code, set limits on their technical specifications and give power to local authorities to regulate shared services. No surprise is expected, apart from a speed limit at 20km/h (as in Germany) and a strange requirement to park micromobility vehicles close to buildings when no space is available on the road. Mobilne Miasto is currently lobbying to get back to the 25km/h speed limit and to the usual parking rules.
This new legislation should kick-start a massive expansion of scooter-sharing services across Poland. Valerii Romanov confirms that “9% of people using the Bolt app choose micromobility services instead of taxis for short distances. And the number is increasing!” American and Western European operators who might have been reluctant on expanding further will be comforted by the legal framework. And they are now willing to provide mobility alternatives to medium-sized cities. Though scooters are already available in many cities, they are all under-served and would easily accommodate 5 times more scooters to match the demand. In the Baltics, the analysis is similar in big cities, and the potential even higher in medium-sized cities that remain untouched. Bolt currently operates scooters in 15 cities in the Baltics, and according to its GM for Lithuania Eimantas Balta, “is aiming to expand to tens of new cities in the Baltics in 2021”.
And we are not only talking about scooters. E-bikes seem to have a similar potential. 2021 will see many Polish cities launching tenders for the renewal of their bike-sharing schemes, with a major focus on electric bikes: 3,000 e-bikes in Krakow, 4,000 to 8,000 e-bikes in Metropolia GZM, 400 with 30% e-bikes in Tricity… If Poles are used to cheap dock-based services, they might be more reluctant on using more expensive free-floating options. Blinkee.city actually decided not to operate e-bikes after “an unprofitable trial in Rzeszów”, says Paweł Maliszewski. If the development is quieter in the Baltics, the potential remains huge.
Last but not least, cooperation between operators and local authorities should improve. Some cities in Poland are already working with Blinkee.city to build a MaaS platform integrating their vehicles. Citybee is also in advanced discussion with many cities in the Baltics. Adam Jędrzejewski notices that when the new law is voted in Poland, “many local authorities will be eager to get shared scooters along with bikes or e-bikes. If big cities will rely on licenses, medium-sized cities should be ready to put money on the table in order to attract operators”.
The Baltics and Poland have great development potential, especially for shared scooters and e-bikes. These markets will get mature with new regulations and the experience gained by local authorities. This should convince some international operators to try their luck, and work around local specificities (weather and lower average income) to carry on the modal shift towards shared vehicles.