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Business

Which subscription model would suit my mobility operation?

by Harry Maxwell, on May 27, 2021

6 MIN READ

Guaranteed recurring payments from valued customers: the dream for micromobility companies has become a reality. Here’s what subscription models work best.

Increasing the lifetime value of users is a considerable challenge in the micromobility industry. Operators are tasked with trying to engage with and retain a number of very different types of riders.  

A sizeable portion of ridership comes from commuters: people using these vehicles for (part of) their journey to work.

On the other side of the spectrum, many are very occasional users, or tourists in a new city who only use service for a couple of days before leaving. One study suggests that this could be up to 33% of scooter users.

Operators need to know what pricing structures will maximize user acquisition and retention.

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Pay as you go

The popularity for micromobility services arose from the novelty and simplicity of being able to pick up a vehicle with your smartphone in seconds. With the most commonly adopted fare structure in the industry, ‘pay as you go’ (PAYG) charges users for each ride that they take, which usually includes a unlock fee and a fee per minute (€1 unlock and €0.15/min), or a flat fee for a predetermined time period (e.g. €1.90 for 30 minutes).  

Pay as you go services have several benefits. Firstly, they give users total flexibility with no commitment. It’s simple to sign up and start riding and it is perfect for infrequent/sporadic users. This is also a big plus for operators in terms of converting downloaders into riders.  

User retention, however, is a huge challenge. High unlock fees can deter occasional users from using a service more frequently, and many variables can affect ridership:

  • Fleet availability and uptime
  • Competition (new or existing player with new vehicles or marketing efforts)
  • Transport improvements/problems
  • Weather

For the balance sheet, pay as you go means that revenue fluctuates significantly. Controlling the weather is impossible, but you should optimize your pricing structure to build customer loyalty, come rain or shine!

The price barrier

More so than in any other business, there is a large gap between the most frequent user and the most occasional user.

A general breakdown of micromobility personas

A successful operator will shift users from the lower bands into the higher bands, and would certainly find it easier to do if they removed the price barrier for users. A study in France revealed that 53% of working e-scooter users are executives, and 57% indicated price as a main drawback to their use.


The rise of subscription models


Subscription models have become popular because they are a win-win for both users and operators.

The user wins: price

If a user can subscribe to a service and make each of their rides cheaper (see examples in next section), users will be much happier. A commuter that spends €4 on each 20-minute trip to work will, over a 22-day working month, spend €176. Assuming a €1 unlock fee, an ‘unlock pass’ for €9 (allowing users to bypass this fee for a month) will result in a monthly saving of €35 (€44 unlock fees - €9 ‘unlock pass’) for the user.

As Arturs from ATOM Mobility rightly points out, “when the unlock fee is removed, it encourages users to adopt micromobility for the shorter (5-10 minutes) journeys that they would usually not make on an electric bike or scooter due to the price barrier”.  

The operator wins: retention

A healthy subscription model should lead to more revenue. Subscriptions will help keep revenue constant even when the level of activity dips (e.g. winter months). Users should also ride more frequently (and sometimes for longer) which creates an engagement to the brand and the service - resulting in increased customer retention and loyalty.

Ultimately, any subscription makes it harder for a user to switch to another provider. If users ride more but you are not charging more, you are losing money. What you need to be wary of is not discounting your heaviest users so much that it starts impacting revenue. In an ideal world, higher PAYG fees help finance advantageous fees for subscribers.

Which subscription models work?

Here’s a breakdown of some of the subscription models out there:

  • Unlock pass: Free unlocks / €X per week/month
  • Unlock & minutes pass: X unlocks and X free minutes
  • Trip pass: X number of rides (up to 30/45 minutes)
  • Long-term leasing: Privatise your own vehicle for a monthly fee
A quick price comparison between two top operators

It’s worth noting that dott’s ‘no unlock fee’ plan for 3 months is highly competitive and is likely to be a bid to remove that price barrier for new users. It also suggests that they are confident that 3 months is enough time to create some degree of loyalty with these users so that they stay engaged long-term!  

Much like Zoov, ATOM Mobility allows operators to set their fair structure and design subscription models with total flexibility.

“In the past few months, we noticed a boom in subscription based rides. It’s not only the larger players such as Lime and Voi that offer monthly passes, more and more local operators are tapping into that market too. We believe this is a great model that increases the retention of users and serves as a great and true alternative to public transport”.

Arturs Burnins, CEO of ATOM Mobility

Catering to shifting user behaviours

Commuters make up a large proportion of micromobility ridership. This shift away from cars and public transport has been accelerated by the pandemic.

Source: McKinsey


As risk of infection becomes the number one reason to choose micromobility solutions over other transport, the future of the commuting lies in an integrated transport network of micromobility solutions and public transport.

One of the companies giving commuters more freedom is Betterway. Companies that are subscribed to the service allow their employees to benefit from up to €500 per year in credits on a universal mobility card (in partnership with Mastercard). With this card, they are free to  access each and every mobility solution on the market, both public and private.

“We have observed that, when given the choice, employees will switch from one mobility to another much more easily, from public transportation to micromobility and vice versa. We believe that subscription-based models are the next step towards developing multimodality".

– Denis Saada, CEO of Betterway

Building a subscription model is the key to capturing additional revenue coming from company incentives.

Long-term leasing

Subscription models in micromobility have evolved a step further.

One of the problems with shared mobility lies within the name - it’s shared. Yes, traditional ‘pay as you go’ schemes’ are flexible and convenient, however:

  • They aren’t personal - users want vehicles that are comfortable. The more personal an experience is, the better. Since the pandemic, growing concerns over risk of infection will also play a role in user behaviour in the years to come.
  • Some, especially commuters, want a reliable option - a vehicle that is always there for them when they leave (for) work, always in perfect condition and has a full battery!
  • Long-term leasing is far cheaper - for frequent users and commuters, it’s not even close.

Companies such as Bloom have launched a long-term leasing service for a monthly fee of €59 a month that combines the security and flexibility of a shared bike with the elegance and exclusivity of a personal bike.

“The main advantage of the subscription model is that it lowers the cost and commitment involved in owning an e-bike. The consumer is no longer tied to one type of vehicle for years, and is no longer forced to fork out a large amount of cash to take care of maintenance and insurance”.

– Driss Ibenmansour, Co-founder of Bloom

Bloom chose Zoov to launch their long-term leasing service in Paris
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The low-down

  • The PAYG system serves as a price barrier for many would-be users.

  • Subscription models removes this barrier to increase user engagement and loyalty.

  • A variety of subscription models should be used in conjunction with the traditional PAYG structure.

  • Companies like Betterway are blurring the lines between public and private transport services, creating more frictionless journeys and boosting micromobility ridership amongst commuters. The market is there to be won!

  • As a result, long-term leasing is a very promising option for operators that want to cater to the needs of everyday users.