By Sheana O’Sullivan
A couple of years ago now, I remember a night when I just couldn’t get a cab. I wasn’t far out of town, barely on the outskirts of San Francisco, but as the evening went on, it was looking less and less likely anyone was going to be able to pick me up. Liz, the apologetic operator at the other end of the line, explained that there was a huge shortage of taxis that night because of an event happening in the Mission district, much to my frustration.
Fast forward to 2018 and the chances of that happening in this city are slim to nil. I feel like I’ve woken up on a different planet – with the tap of an app I can get a car to pick me up within 3 minutes from that same location.
This is the on-the-ground impact of San Francisco’s recent revolution in urban mobility. Now I have several options to get from A to B, from ride-sharing operated cars and e-bikes to electric scooters. The latter have certainly proved controversial – in June, City officials temporarily banned the vehicles pending their proper regulation after a lack of parking resulted in a scooter sidewalk invasion. Times have certainly changed.
So, what has been the driving force behind this mobility transformation?
City dwellers seek convenient transportation
As more and more people live in cities – now more than half of the world’s population, say the United Nations – there is a need for a broader array of mobility options. We see the big players like Uber and Lyft actively looking past cars to become a one-stop-shop for moving around cities. They’re moving to become urban mobility platforms helping people get around in more affordable and more convenient ways.
E-scooters are a new way to get around that really resonates with San Francisco’s busy citizens. Being able to leave the bike or scooter anywhere on arrival seems to be the ultimate in consumer drop-off convenience.
E-bikes are equally a great example of how urban mobility can be done well: these stationless, pedal-assist bikes can be legally locked to bike racks or street furniture like benches on sidewalks. The bikes also come with integrated locks which secure them, meaning minimal disruption to the city and maximum security.
San Francisco has one of the worst commutes in the US
I recently read that urban congestion here is estimated to have cost the city $10.6BN last year, at an alarming cost of $2,250 per driver. The city placed fifth globally for worst traffic behind Los Angeles, Moscow, New York City and Sao Paulo. Anything that can take drivers off the roads and help minimize the commute is certainly a positive.
What do investors think?
With urban tech investment rocketing to over $75bn in 2016-2018, investors all over the world, from Beijing to New York, appear to be paying far more than lip service to this trend. But the San Francisco Bay Area is still leading the way by quite a margin, funding roughly 30 percent of all global venture capital investment in urban tech.
Not surprising, like with any disruptive tech trend that’s being embraced by users, we’re seeing big brand acquisitions and heavy investors jockeying for position to get into the urban transportation market.
As for San Francisco’s rebellious electric scooter disrupters, we know that Bird, which has been operating for around a year now, is rumored to be seeking a $2bn valuation. The company has raised $400m from Sequoia Capital, Greycroft, Tusk Ventures, and Upfront Ventures. And fellow scooter start-up Lime, currently valued at $1.1bn, is raising $335m in a round led by Alphabet and others including IVP, Atomico, Fidelity Management and Research Company, and Uber.
It’s a worldwide movement
This revolution in urban transportation isn’t unique to San Francisco or even just the US. Dockless bike sharing startups, like Ofo, Mobike and LimeBike have flooded European cities in recent years with rides that can be hired at the tap of an app. In India, I’m hearing about bike-share services from Ola Pedal. In Southeast Asia, it’s Grab and in China, it’s Didi. Both Didi and Grab have also invested directly in bike-sharing startups Ofo and OBike, respectively.
So, what’s next?
I think the emergence of these new modes of transport is great if it gets more people out of cars and into more affordable, green alternatives. Despite a bit more congestion on the footpaths with bikes and scooters wrestling for space, there does not seem to be any downside as far as I can see.
What we can be certain about is that there’s more to come. This week, Uber have announced plans to focus on bikes and electric scooters over cars as part of their long-term strategy.
Tech giants Uber and Google are even working on driverless vehicles as the next big thing in urban transportation and talk of futuristic “flying taxis” has even been in the air. Though I’m not sure I’m quite ready to book a ride in a hovering drone-helicopter hybrid, however few and far between the cabs are that night.