The next big market opportunity for micromobility is commercial, not consumer

Drones, sidewalk robots and autonomous vehicles are being touted as some of the next big movers in the last-mile delivery space, but what of the humble bicycle?

Global logistics and delivery companies like UPS, FedEx and Amazon have all begun trialing some form of electric bike or cargo bike for delivery. At the same time, startups are cropping up to provide both fleets of micromobility vehicles for enterprises and e-bike subscriptions for couriers and gig workers.

As last-mile delivery increases due to a booming e-commerce scene and pandemic habits now ingrained in consumers’ lifestyles, the biggest market for micromobility will end up being in the commercial space, not focused on consumers.

“It makes little sense to deliver an iPhone or a poke bowl in a Buick,” Nate Jaret, general partner at Maniv Mobility, an Israeli VC that specializes in early-stage mobility companies, told TechCrunch. “Given the right tool, couriers can work faster and get better paid — and electric two- and three-wheelers are increasingly the right tool.”

The last-mile delivery market size is expected to hit $123 billion by 2030, at a compound annual growth rate of 13.21%. If the sector continues as it is now, that will look like a whole lot more trucks, vans and cars taking up space in cities and polluting the air that people breathe — not exactly the message we’re trying to send these days.

“It makes little sense to deliver an iPhone or a poke bowl in a Buick.” Nate Jaret, general partner, Maniv Mobility

Micromobility solves the problem that electric cars and vans don’t, particularly in urban centers — they are small enough to bypass traffic congestion and quick enough to make as many as two times more stops per hour than a delivery vehicle, according to John Pearson, DHL Express Europe’s CEO. The total cost of ownership of e-bikes is also minuscule compared to vans.

Working e-bikes into the logistics system also solves the problem that autonomous delivery vehicles — be they sidewalk robots or something a little bigger, like Nuro’s delivery vehicles — don’t. The technology is available now, not in 10 years.

These factors present a competitive advantage for businesses that want to reduce costs in the last mile, which is usually the most inefficient and costly part of the delivery chain.

“We believe that many commercial and delivery applications (and especially urban last-mile delivery) will electrify faster than consumer use cases, due to total cost of ownership considerations — amortizing the higher upfront cost of any EV is much easier when the vehicle’s wheels are rolling eight or more hours a day,” said Jaret.

How the logistics space is approaching micromobility

Amazon has a goal of making 50% of its shipments net-zero carbon by 2030. In addition to ordering 100,000 electric delivery vans from Rivian, the company has started integrating micromobility vehicles into its delivery fleets.

Last year, Amazon said more than 5 million shipments across 17 European cities and 30 million packages in Manhattan were delivered to Amazon customers using cargo bikes and walkers. The e-commerce giant said its global bicycle fleet includes both traditional bikes and e-bikes connected to cargo trailers that can carry up to 45 packages at a time.

Earlier this summer, Amazon announced the launch of its first U.K. micromobility hub that will house the e-cargo bikes needed to make over 5 million deliveries per year across Central London. The e-cargo bikes look more like mini-trucks and appear to be powered by British company Electric Assisted Vehicles (EAV). DHL is also trialing EAV’s eCargo bike in Edinburgh.

UPS started testing a similar tiny van that’s powered by an electric bike motor in Scotland and New York City this year. In Germany, the shipping company also started testing Onomotion’s covered e-cargo bikes, all of which are part of UPS’ goal to achieve carbon neutrality by 2050. To get there, UPS aims to have 40% of ground operations powered by alternative fuel, and by 2035 see a 50% reduction in CO2 per global small package.

Similarly, FedEx wants to transition to an entirely zero-emissions delivery fleet by 2040, with 50% of fleet purchases being electric by 2025. The company has been testing e-bikes in London and Amsterdam, and in some cities, like Toronto, e-bikes are directly replacing vans.

And on the more delicious side of last-mile delivery, there are the app-based gig economy companies delivering the world’s tasty treats. For its part, Uber said that more than 46% of Uber Eats deliveries are now completed on two-wheelers, and that, following improvements to the cycling network in Toronto, Uber Eats saw a 40% increase in bike deliveries there between 2019 and 2020.

The startups, and their bikes, that are powering last-mile delivery

Many have focused on stats showing how electric bike sales outpaced electric car sales in 2021, but e-bike sales are only one part of the story because many of the e-bike manufacturers making those sales are the same ones leasing their vehicles out as fleets.

Consider Rad Power Bikes, which has skyrocketed in consumer popularity in the U.S. The startup is also beefing out its commercial offerings and is the exclusive e-bike provider for Domino’s in the United States.

Speaking of Domino’s, the pizza chain has also enlisted the e-bikes of New Zealand utility e-bike company Ubco in New Zealand and the United Kingdom.

Then there are startups like Australia’s Zoomo, Germany’s Cycle (formerly GetHenry), and New York’s Joco, which supply e-bikes for fleets and offer subscriptions for couriers. This dual approach allows them to tap the growing gig economy while also securing partnerships with legacy logistics and delivery companies that are actively looking for ways to go green.

“Subscriptions of lighter electric form factors help freelance couriers afford a vehicle they might not have been able to otherwise, and the new wave of delivery companies are all keen to help their couriers access better vehicles, not least to drive loyalty to their platform,” said Jaret.

In July, Zoomo secured a partnership with SG fleet, an Australian mobility solutions provider, that will allow fleets in Australia and the U.K. to expand and electrify in the parcel delivery segment.

Supplying the on-demand grocery, food and convenience store delivery market is Cycle, which closed a $17.4 million seed round in May, money that the startup will use to expand across Europe. The young company already supplies e-bike fleets to customers like Gorillas, Flink and

Then there’s Joco, a company that originally tried to launch as a competitor to CitiBike but just couldn’t get past the incumbent docked bike-share company’s monopoly over NYC. Earlier this year, Joco pivoted away from consumer bike-share toward supplying delivery vehicles. It offers couriers access to its network of docked e-bikes for a daily or weekly fee and supplies fleets to businesses in the food, grocery, alcohol, healthcare and parcel delivery spaces.

Joco’s bikes are supplied in part by Acton, a U.S. startup that provides electric micromobility vehicles and the cloud-based software infrastructure to run shared fleets for cities and operators. Acton recently acquired Duckt, an e-bike docking and charging infrastructure startup, signaling a potential increase in more fleet-based customers that will need to dock and charge their bikes in one place.

“In the U.S., about 25% of our customers are leveraging fleet vehicles for last-mile deliveries in various cities, especially major metropolitan areas considering the density of the city and population,” Janelle Wang, co-founder and CEO of Acton, told TechCrunch. “In the EU, more than 50% of our customers are leveraging fleet vehicles for last-mile deliveries, some even for pharmacy deliveries, which I feel it’s fascinating to see. Considering the tight and old town city infrastructure in the EU, LEVs make total sense for people or goods transport, much more so than four-wheel cars, whether EVs or not EVs.”

What’s next?

A variety of factors are converging at the same time that will make micromobility the next big disruptor for last-mile urban delivery: an increase in same-day and next-day delivery demand; the necessity to reduce congestion in cities; the adoption of sustainable methods of transportation; cost efficiencies associated with lighter vehicles; and some seriously advanced technology powering everything from the vehicles themselves to logistics networks.

So whether it’s your midnight sushi burrito or those new headphones from Amazon, expect some form of e-bike to be powering your next delivery.