The Real Problem with E-Scooters and Micro-Mobility (and the Blockchain Solution)

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Scooters! Of course!

Of all the transportation trends that have emerged in the last few years, none seems as effortless, as obvious, and as “why didn’t I think of that???” as the shared scooter. Shared scooters resolve a significant number of pain points for the modern urbanite. They enable anyone (really!) to travel farther and faster than possible on foot, with less physical exertion and fewer wardrobe malfunctions than on a bicycle. They do it without contributing to traffic congestion or transportation-related air pollution. Scooters don’t make you get into a car with a stranger, or force you to commit to a long-term relationship. They provide more flexibility and comfort than public transportation. In many cases, they do it all for less money than your morning latte. Plus, they’re fun!

 

The Fight to Be First

In order for Bird or Lime or Jump to stay relevant and profitable, however, they need to grow aggressively, making their brand ubiquitous in as many regions as possible. That kind of scalability requires obscene amounts of money, and will become increasingly difficult as city regulations catch up with the micro-mobility tide. Even Bird admits it will be “difficult to scale” beyond 1 million scooters globally, and that “obtaining enough supply” is a primary challenge.

Further, unlike with ride-hailing where driver reputation and perceived brand trustworthiness have a major impact on customer loyalty, most scooter users will happily hop on whichever scooter happens to be close, available, and charged. Leading companies are offering both products and user experiences that, while they may have differences, are unlikely to override pure convenience to translate into any kind of meaningful brand loyalty. Their market advantage is their status as first-movers, not necessarily superior offerings. On the other hand, so much funding has already been poured into these companies’ endeavors that to create a competing service is, in most cases, effectively impossible. Until one of them deems your home town a worthy market, you’re stuck pounding the pavement (or sitting in traffic…) with the rest of us.

Gentleman commuting by scooter in Stockholm.

The Blockchain Advantage

Cost of Market Entry

It is exactly this interchangeability that makes micro-mobility vehicle-sharing a fascinating use case for understanding how blockchain and smart contracts can erode the first-mover advantage to open up this market for innovation and competition. There is very little about this business model that could not more effectively and less expensively be managed by blockchain and smart contracts. Currently, Bird buys, equips, and maintains its scooters while paying “Chargers” or “Bird Hunters” to find, collect, charge, and redistribute those scooters each evening/morning. That’s pretty much all there is to it, but that initial output requires significant up-front cash input.

In a blockchain-enabled network like DAV, anyone could buy a scooter and make it available on that network for others to use. The cost of market entry suddenly goes from millions of dollars to…the cost of each scooter. A smaller-scale operation suddenly becomes viable without needing “Bird-level” money upfront.

Expanded Opportunities

The smart contract transactions also enable the distribution of service opportunities within a community. Whereas a centralized company could provide in-house maintenance, insurance, and dispute resolution, a competing local app might determine that those aspects are better left to local service providers, facilitating competition and money-making opportunities in those arenas as well. All related transactions associated with every ride would be predefined and executed seamlessly through smart contracts, optimizing the services without impacting the end-user experience.

True Market Competition

This competition would likewise facilitate better working conditions for people earning money by providing charging services. Currently, Bird classifies Chargers as independent contractors, and offers them no benefits of any kind. The inherent flexibility in the gig economy may make this tradeoff worthwhile for those who choose to participate, but if owners of shared scooters were competing in a meaningful way with one another, they’d also be competing for the services of local Chargers. This could, in theory, lead to owners providing more favorable terms in order to ensure timely service, or even secure loyalty. Conversely, transparent work histories visible on the blockchain could protect the network owners from shady practices like “hoarding.”

Local Feel, Global Reach

Finally, a blockchain-based micro-mobility vehicle network would mean that your favored app could travel with you when you visit another city or even another country. Any scooter connected to the DAV network anywhere in the world would be available to any user accessing that network, regardless of which app they prefer to use as a portal. This effectively renders a local app — which may be perfectly suited to your personal tastes, cultural priorities, and language preferences — instantly global, and puts micro-mobility at your fingertips no matter where you go.

Always ask…what’s next?

A year ago, few of us had ever heard of micro-mobility, nor imagined ourselves motoring around town on the same kind of wheels we used at age eight. But here we are! What else haven’t we imagined yet? Where we might be a year from today, as DAV continues to explore and shape the impact decentralization-through-blockchain can have on mobility, on the economy, and on our daily lives? Don’t wait to find out — join us, and help make it a reality.

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Rachel Linnewiel

Rachel Linnewiel

Rachel is the Head of External Relations at DAV. Graduate of the Technion Institute of Technology with a Masters in City and Regional Planning. Previously Transportation Planner and Coordinator of Electric Vehicles North Texas, the electric vehicle stakeholders group of the DFW Clean Cities Coalition.

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