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

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

Global logistics and delivery companies such as UPS, FedEx and Amazon have started trialling some form of electric bike or cargo bike for delivery. At the same time, startups are emerging to offer fleets of micromobility vehicles for enterprises and e-bike subscriptions for couriers and gig workers.

With last-mile delivery on the rise thanks to the booming e-commerce scene and pandemic habits now ingrained in consumer lifestyles, the biggest market for micromobility ends up being in the commercial space rather than focusing on consumers.

“Delivering an iPhone or a Poke Bowl on a bike makes very little sense,” Nate Jarrett, general partner at Manive Mobility, an Israeli VC specializing in early-stage mobility companies, told Technology Flow. “Given the right tool, couriers can work faster and get better pay – and electric two- and three-wheelers are mostly the right tool.”

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

“Delivering an iPhone or a poke bowl on a bike makes little sense.” Nate Jarrett, General Partner, Manive Mobility

According to John Pearson, micromobility solves the problem of not having electric cars and vans, especially in urban centers – they’re small enough to skip traffic jams and quick enough to make twice as many stops per hour as a delivery vehicle, CEO of DHL Express Europe. The total cost of ownership of e-bikes is also very low compared to vans.

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

These factors provide a competitive advantage to businesses looking to reduce costs in the last mile, which is typically the most inefficient and expensive part of the delivery chain.

“We believe many commercial and delivery applications (and especially urban last-mile delivery) will electrify faster than consumer use cases, due to total ownership considerations – the high upfront cost of any EV is much easier to replace when the vehicle has wheels. Circling eight or more hours a day,” says Jarrett.

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