
The Truth about Mobility Markets: Location Matters
Mobility solutions ranging from car sharing to electric scooters have been a hot topic with startups, investors, and customers for the last several years. But a series of high-profile withdrawals and financial failures have led to questions about the viability of “mobility as a service” business models. While many proponents originally hailed these businesses as the future of transportation everywhere, the reality is that “one business fits all” simply doesn’t work in the real world. What drives massive success in one local market might lead to total failure in another.
Looking at recent failures
To the casual consumer of Uber rides and Lime electric scooter trips it might seem like the mobility market has only gone up, but a quick look at market moves shows that mobility is not winning everywhere. Here are just a few notable mobility failures from the last year:
- San Antonio’s bike share program lost its sponsor and is struggling to remain viable.
- LimePod, one of Seattle’s car share programs, closed its doors in September, just a few months after BMW’s car share partnership program exited Portland and Seattle.
- Lyft’s scooter service found multiple markets were unprofitable and withdrew its scooters from Nashville, San Antonio, Columbus, Atlanta, Dallas, and Phoenix.
- GM’s car sharing service, Maven, scaled back from 17 to just 8 US cities in May.
- And just last month, Lime withdrew its scooters from 12 markets internationally amid regulation issues and low profitability.
Profitability of even “successful” companies is also suspect since both Lyft and Uber are massively unprofitable and still-private companies like Lime and Bird are burning venture capital investor dollars without publishing audited financials. Additionally, bike share programs often require an investment of $1000 or more per bike from sponsors to be viable and carshare programs still require partnership dollars from automotive manufacturers to stay afloat outside select markets. If we judge the mobility market by the financials of ride sharing, all services are likely losing significant money every month on average, with only a few ideal markets providing actual profitability.
Location matters
From all these recent failures and questionable business metrics despite billions of dollars of investment, it has become increasingly clear that mobility is a location-specific business. Let’s take a look at some of the factors that make locations different in practice.
Local market preferences
Different markets not only have different demographics, but also different preferences when it comes to transportation options. For example, European residents are usually far more comfortable with the car share model (where you effectively borrow someone else’s car for a period of time) than US residents are. Mobility users in some markets will quickly decide to purchase a scooter or bike outright for long-term cost savings while convenience-focused users in other markets will happily rent indefinitely. Additionally, different cities have different pre-existing preferences for transportation methods. In some cities, residents already love bikes, in others cars are effectively mandatory, and in some locations scooters are ideal for getting between subway stops or beach bars.
Weather & seasons
While cars are only slightly impacted by inclement weather, other mobility options face significant setbacks when it gets cold or rainy. It’s definitely possible to ride a scooter or bike in non-ideal conditions, but most users prefer not to. This effect is prevalent enough that in some cities, shared scooters and bikes are pulled off streets entirely during winter months and either placed in storage or redistributed to locations with milder winters. On top of this, usage also tends to be significantly impacted by daylight, as shown in this analysis by Uber analyst Satosh Rao:

The net effect is that non-car mobility options are well-used during the day in locations with nice weather, but face significant obstacles in locations with poor weather, snow-filled winters, and early sunsets.
City dynamics
Due to a variety of factors, cities in different parts of the world have developed significantly different transportation infrastructure and affordances. Some are extremely car-centric with plenty of parking spaces, few or no bike lanes, and questionable sidewalks while others have gone out of their way to make getting around without a car both easy and pleasant. This also extends to types and density of public transit available to residents. Slow buses may be the only option in one location, while in another subways and light rail whisk passengers around faster than they would be able to drive. The result is some cities being inherently good fits for mobility services, while others pose significant challenges that make using anything other than Uber or Lyft a questionable value.
City-specific regulations and political environments
Early market entry by mobility companies was notorious for largely ignoring regulations and cooperation with local governments, opting instead to flood markets with scooters, bikes, and shared cars to gain public mindshare. This led to a large backlash both from local residents and from city councils in the form of licensing requirements, fees, and new regulations not just for mobility companies but also for their customers. On top of this, pedestrians and drivers have become wary of shared mobility solutions, often seeing dockless bikes and scooters as public nuisances, inexperienced (and inconsiderate) riders as a net negative for local communities, and carshare services taking up parking spaces that could be better used by commuters. Many mobility providers now face an uphill battle to cooperate with different municipalities’ particular tolerance levels for different transportation types. Some cities welcome mobility options, while others have deliberately put up expensive roadblocks to discourage these services from operating.
Looking forward
Looking at recent market moves and current challenges in the mixed mobility space, it has become clear that success for carshare, bike, and scooter providers could very well be out of reach in many cities. Some solutions, like scooters, are an easy usage and profitability win in sunny beach cities, but a complete failure in northern cities without dense urban centers. Other solutions, like bikes, can thrive in cities with cyclist-friendly infrastructure and languish in other cities abandoned by investment partners. Similarly, shared cars can be successful in European cities with the right demographics and a complete non-starter in US markets. Now that the honeymoon phase is over in the mobility space, companies increasingly need to take a look at which locations make sense to push for and which ones simply aren’t a good fit for different mobility services. Expect to see more high-profile exits from markets in the next two years as business model challenges catch up with the realities of today’s cities.