Business
Business

The benefits of fleet diversification

by Harry Maxwell, on April 27, 2021

5 MIN READ

As Lime launch mopeds in the U.S. and France, it is now time for all operators to consider the benefits of a diversified fleet.

At the start of the year, the news broke that Lime would be adding a new vehicle to their fleets in both Washington D.C. and Paris. In March, 600 electric mopeds took to the streets of D.C. and in April, 1,000 landed in the French capital.  

They also announced a $50m plan to grow their shared electric bike network. Their goal is to launch their new model of e-bike in 50 cities by the end of 2022.

Despite the wild success of their scooter operations, the rise of e-bikes and the unpredictability of user preferences post-Covid has led them to diversify their offer significantly.

There are multiple reasons why an operator should consider going multi-modal.

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Maximizing success in a city

A new mode of transportation unlocks an entirely new audience.

The type of vehicle a micromobility user will choose depends on fitness, trip length, convenience, comfort, price and safety.

Various studies have also shown that certain modes of transportation are less accessible for certain demographics. For example, there is a reluctance amongst women and other groups to enter scooter-dom. In general, mechanical bikes aren’t the first choice for people that are less fit, and mopeds are somewhat inaccessible for people that have never used one before.

There is also the question of perceived safety. Bicycles have been around for centuries, it’s natural that people trust them a little more than the new vehicles that have recently appeared on their streets. Even though scooters are safe and getting safer, it is still a barrier for some people to take their first scooter ride. This sentiment is exacerbated by bad weather and can persuade even the most regular scooter user to swap out for a trustworthy electric bike.

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By diversifying your fleet, you can attract new users that you wouldn’t be able to reach with a single-mode service. It also presents a unique opportunity to explore and test different hardware. There is a wealth of exciting hardware on the market and offering new models that have not yet been seen on the streets is exciting for users and can increase adoption significantly.

User acquisition leads to a more profitable service - but it could also strengthen your relationship with city officials. If you demonstrate that you are enhancing their transport network with a series of vehicles that promote inclusivity, are accessible to all ages and reduce traffic congestion, you are certain to win their favour.

Operators do all the hard work to win the tender to begin with, they now need to find ways to tighten their grip on those elusive renewals.

Keeping existing users on your platform

The other side of the coin is user retention. Tough competition means that customer loyalty is a real struggle, which is one of the reasons why operators develop subscription models. Even when companies do great marketing, provide exceptional hardware and create great customer experiences, there is one problem: customers will always want choice.

Operators should consider pursuing fleet diversification to keep users coming back to their platform no matter what - to control the uncontrollable variables.

As previously mentioned, scooters may not be the best choice for when the ground is wet. Users may instead consider public transport or a bike. Mopeds, on the other hand, allow two people to take the same vehicle - for scooters and some e-bikes this is not possible.

This is one of great wins for mopeds and surely one of the reasons behind Lime’s fleet diversification and Uber’s partnership with Cityscoot. If 2 people want to take an Uber, and demand is high (meaning higher fares), they could consider taking a moped which would be less expensive and is likely to be faster.

Critically, Uber and Lime are keeping customers on their app. It is worth considering that if a user downloads another app to access a different mode of transport as a one-off, it could quickly develop into their preferred service if they have a wider range of vehicles.

Reaching new markets

No single vehicle can serve the needs of an entire city. Hundreds of cities have very complex, varying needs where there is no such thing as a ‘one vehicle fits all’ when speaking about one vehicle for every city.

For example, some cities aren’t built for scooters - maybe the roads have many potholes which will make for an uncomfortable/unsafe ride, or make the vehicles more prone to damage.    

However, a particular type of vehicle - or a combination of two or three vehicles - can be an exciting prospect for cities and operators alike.

For cities, as we saw with Paris’ clampdown on scooter operators, it is simpler to work with a select few operators than many different ones. If an operator can provide multiple means of transport to serve their city, they are more likely to be favoured when answering to tenders. Even if the tender is only for electric bikes today, it could be mopeds tomorrow.    

An operator with more than one string to their bow is eligible for more tenders. Some cities may only be searching for electric bikes, others just for electric scooters. Operators that go multi-modal can answer to more tenders and are likely to win more - opening doors that would otherwise remain shut.

Take the example of pony. Pony is an operator that has built a customer base in Paris with electric bikes so that, when the call for a tender comes for scooters, they have a better chance of getting their foot in the door.

Diversifying supply chains

Many shared mobility operators don’t manufacture their own vehicles. They usually get their hardware from a specialist in electric vehicles for ride-sharing. Therefore, a benefit of incorporating new vehicles into your fleet is choosing a new hardware provider with a different supply chain.

Although to some this is ‘complicating’ the supply chain, the right partner can make an operator’s life a lot easier. If you are serving cities in Europe, you should consider opting for a European provider that can answer your needs quickly and efficiently, and provide you with replacement vehicles and parts even in the event of a disruption similar to that of the recent Suez canal blockage.

A diversified fleet, served by different manufacturers, will help create a service with a high fleet availability rate in your cities of operation, even in a logistics crisis.

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Why you should diversify your fleet and go multi-modal

  1. To attract new audiences, grow your customer base to maximize ridership in a city.
  2. Users want choice. Giving them a range of options increases retention and loyalty.
  3. New modes make you eligible for - and more likely to win - new tenders.
  4. Different supply chains will make your life easier, especially if you select a European-based partner.