Many shared mobility operators launch with off-the-shelf solutions only to start internally designing their own vehicles, IOT devices or fleet management software down the track. But it’s rarer to see B2B suppliers becoming operators. Whether they are hardware, IoT or software providers, a handful of them have decided to take the plunge and start shared mobility services of their own.

The recent launch of Vulog’s car-sharing service Leo&Go in Lyon made us want to better understand the motivations, risks and results of such moves. Will suppliers become fierce new competitors to their own operator clients or is it a case of benevolent industry collaboration?

Kickstarters

For some suppliers, there has simply been no alternative than to dive into operations themselves.

It’s 2016. The free floating market is still in its infancy, but some pioneers are already working on it. goUrban, whose ultimate goal was to develop a shared mobility platform, was among the first to provide such a free-floating service with 50 mopeds available in Vienna. A batch of Niu mopeds, a do-it-yourself IoT solution built in a garage, and there you go! “We were convinced that the market for our platform solution would be huge, but it was too early and there were no clients! We had to operate our own service, but in the end it has been of great value to develop the best shared mobility platform” explains goUrban CEO’s Jonathan Gleixner.

Similar story with Atom Mobility, who launched one of the first scooter-sharing services in Europe, with 50 scooters in Riga in February 2018. Again, the focus was on developing a shared mobility platform starting with scooters… but the first ever service of this kind had only been launched 5 months earlier in Santa Monica (USA). “Our ridership figures were crazy the first year with more than 10 rides per scooter per day”, remembers Atom’s CEO, Arturs Burnins. “But we knew our service would be short-lived, the only question was: how long would it last?”.

For goUrban and Atom Mobility, it was not even a choice to operate a service, but a requirement as they developed their solutions when the shared mobility market was almost non-existent. It gave both of the companies a specific mindset, focused on understanding customers’ needs and answering them with the appropriate tools.

Leading by Example

For some software and tech companies, launching into shared micromobility operations is more about solving major drawbacks related to shared scooters services and raising industry standards.

As a leading Software and IoT supplier for car-sharing services, Vulog felt a responsibility to stimulate market growth. Leo&Go, the service they recently launched in Lyon (France), has therefore two goals, according to Vulog’s CEO Grégory Ducongé: “We have to demonstrate that our newest technology is able to sweep away the fears related to car-sharing, which is still suffering from bad past experiences” (a reference to Bolloré’s failure with Bluecar). “Leo&Go should demonstrate its financial benefits in practice, thanks to the latest hardware and software developments. We lead by example, showing potential operators that it is possible!”.

From 2014 to 2019, Comodule became the IoT supplier of choice for light electric vehicles, connecting more than 200,000 vehicles to date. The next step was to embed the IoT device during vehicle assembly, which proved impossible with Chinese suppliers, so in mid-2019 they decided to develop a state-of-the-art scooter in-house. Comodule’s own technical specifications were for highly integrated IoT devices, a focus on safety and comfort, and challenging socio-environmental goals (scooters, produced in Estonia, must have a 5-year lifespan). The question then arose of how to offer the solution to the largest number. Here is the answer from Comodule’s CEO Kristjan Maruste: “We decided to launch our service Tuul in Tallinn (EE), in May 2020, as a unique service that would prove the benefits of our technology and scooter design. The final goal is to change the industry’s mindset from a short-term vision aimed at attracting VCs to a long-term vision allowing the development of real sustainable services”.

Vulog and Comodule are on the same page: their services are one-off projects, and there is no will to develop them as a core activity. “Leo&Go is an R&D tool and a showcase for our solution. There is no point for us to launch elsewhere, the only potential evolution could be to add utility vehicles to address new usages” confirms Grégory Ducongé. Same story with Comodule: “The only evolution of Tuul could be to add the Co-Cycle, our own e-bike designed for sharing, along with the Co-Scooter fleet”.

Skipping the Middle-Man

This is not necessarily the case for all suppliers-turned-operators, however. Superpedestrian started to work on a platform to operate shared micromobility fleets in 2013. It resulted in an advanced combination of software (the Vehicle Intelligence solution) and hardware (the Link e-scooter). “We developed what we think is the most advanced solution for scooter-sharing, with a self-diagnosis solution allowing us to increase the lifespan and reliability of the components (and therefore the vehicle), while reducing the need for labour” explains Graham Gullans, Superpedestrian’s CBO. But how to spread the word (and the tech) once you have set new industry standards? “Licensing the solution would not have been profitable in the current shared micromobility market. The best way to make a profit and scale our solution was to produce and operate the scooters ourselves”, answers Graham Gullans.

Superpedestrian’s business model is unique: it is the only supplier really betting on becoming an operator. The revenue generated from users will surely help to finance the R&D needed to address maintenance issues which in turn improves the user experience, a virtuous circle. So growth means more markets and/or bigger fleets and it is therefore no surprise to see LINK scaling fast, especially in European countries where its scooters are already available in 19 cities.

Your laboratory? The city

Whatever the ultimate strategy, suppliers know that fear when they are launching a new product: Is it robust enough? Will it fully match our clients’ needs? Even a long test phase cannot remove all the doubts. So what better laboratory and test engineer than the cities and the riders themselves?

This is what VAIMOO, the Italian bike-share solution supplier, had in mind when launching its own service with over 300 e-bikes in Rotterdam (NL), back in December 2020. According to Agostino De Angelis, the company’s Marketing Manager: “Rotterdam is for VAIMOO a test bench in the field for our solutions and how the technology and system features can be improved’’.

As for Vulog or Comodule, their services allow large-scale experiments: Leo&Go offers 300 cars in Lyon (France), while Tuul offers 500 scooters in Tallinn (Estonia). The proximity makes it easier to implement new features, and creates a fast feedback loop for continuous improvement: “We are able to implement or update new software features in a flash, depending on the feedback we get from the operations team” confirms Grégory Ducongé. Similar story from Kristjan Maruste on hardware for Comodule: “Our first kickstand model was too complicated so we had to improve the design and material. At one point, we had three different models in our fleet, but that allowed us to select the best from an operational point of view.”

Self-operating is also the best way to deeply understand the needs of operators. What better examples than goUrban and Atom Mobility which were the first to use their own software and IoT solutions. goUrban is even nurturing this awareness with its employee’s onboarding process including two days in the field with a client to participate in the maintenance and swapping of batteries. If suppliers and operators are on the same page, some of their priorities might differ. For Agostino De Angelis: “It is a must for us to understand the complex world of operators to improve our solution accordingly”. Kristjan Maruste, from Comodule, recalls that “an operator was complaining that the unlock time with our solution was too long. Our R&D team was not taking the request seriously until they tried to rent our own scooters in Tallinn: it took 6 seconds, and they came back directly to the office to improve that!”.

The feedback from clients is unanimously positive and supportive, and it’s rare for suppliers to actually turn into direct competitors: when Jungo signed up for Atom’s platform for its shared scooter service in Riga, it was the signal for Atom to stop operating its own service. VAIMOO and Vulog both confirm the total support of their clients, who understand the benefits from field tests straight away. Grégory Ducongé adds: “Our clients have straight away identified the benefits they could get from Leo&Go: a tried-and-tested solution, the ability to test new features instantly, and data showing the positive impact of our solution.” It’s a point that also answers cities’ needs to assess the impacts of shared mobility services.

And let’s not forget that you are getting revenue from your shared mobility service, meaning that it is directly financing this large scale R&D plan. “We are above breakeven with Tull in Tallinn, so we are earning money while speeding up and improving our product development” says Kristjan Maruste.

With the noticeable exception of Superpedestrian, who is going all-in with the development of its B2C scooter-sharing service LINK, the analysis is clear. Suppliers and operators are from 2 different worlds. Each activity requires a wholehearted commitment to develop the relevant expertise and become an industry leader. Suppliers who attempt to do both therefore have to set the duration and scale of their operating experiments carefully, to achieve their goals while keeping enough energy focused on their core business.

Written by Alexandre Gauquelin and Julien Chamussy, with the help of Cameron Rimington.