Transportation’s incredible shrinking infrastructure
This article is drawn from the new Transport Weekly newsletter from GreenBiz, running Tuesdays.
In just a square-mile radius around GreenBiz HQ — where I’m drafting this weekly newsletter for you, my dear friends — you can see the evolution of transportation infrastructure in the face of low-cost digital tech.
A couple blocks to the east is Oakland’s 12th Street BART station, the ultimate in transportation mega-infrastructure. Keep going a mile in that direction and you’ll get to International Boulevard, which will be home to the city’s Bus Rapid Transit (BRT) project, a lower-cost and more flexible public transit option.
A couple blocks to the west is a Ford GoBike station, with a dozen docked bikes waiting to be rented. And right outside our door: a handful of dockless battery-powered scooters, placed seemingly randomly, from the various scooter players.
These transportation solutions all offer important options, and will (mostly) work in tandem. But the dockless scooters — which rely on software, sensors, employees and users — to maintain their virtual infrastructure have taken the idea of an "infrastructure-free" transportation network to another level.
With that thought in mind, it’s particularly interesting that ride-hailing company Lyft — which itself is upending transportation systems with cheaper, digital infrastructure — announced Monday morning that it is acquiring Motivate, the owner of the Ford GoBike stations, and others like it deployed across cities in the United States. In the world of bike sharing, "docked" bikes are the older, more expensive technology, while the "dockless" bikes (and their scooter brethren) are the lower-cost, more flexible offering.
As Scoot Networks CEO and founder Michael Keating described it to me: "Dock-based bike sharing has been superseded by dockless bike sharing. The former loses money without sponsorship, and the latter can be run profitably and is more convenient, assuming the operator and the riders park the bicycles well."
It should be noted that competitor Uber bought dockless bike-sharing startup Jump earlier this year. So, why is Lyft motivated (sorry) to buy this legacy infrastructure? And yes, in the crazy world of mobility, a few-year-old tech is actually being displaced.
Here are five reasons why Lyft is buying Motivate:
1. City relationships: With cities stepping in to regulate some of these dockless businesses (such as San Francisco’s five-permit scooter strategy) securing real estate and making deals with a city is highly valuable. For example, San Francisco will put a big damper on the plans of the scooter companies that don’t receive one of the five permits.
Motivate has deep relationships with seven of the largest cities in the United States. Those are extremely important markets for Lyft, which competes most effectively with Uber in some of these markets.
2. Mobility arms race: Fueled by eye-popping venture capital funding, and using a string of purchases, mobility companies are in a race to get as large as fast as possible. Lyft is raising $600 million in funding, led by Fidelity Management and Research Company, giving it a post-money valuation of $15.1 billion.
But Uber and Lyft are just the original ride-hailing players with big funding and acquisition plans. The scooter companies are raising big money, with crazy valuations, too.
Spin is raising a $125 million "security token offering." Lime is raising $300 million, including funding from Alphabet. Bird just raised a $300 million round. These companies are spending these funds on growing as fast as possible, and in some cases by any means necessary.
3. Multi-modal: All of these companies envision themselves as mobility companies that can offer various ways for their customers to get around a city without a personal car, whether that’s a scooter, bike, hailed ride, shared ride or more info about public transit. With the Motivate acquisition, Lyft is launching Lyft Bikes.
Particularly for the ride-hailing companies, the introduction of bike networks is also another to deliver mobility that doesn't cause road congestion or doesn't increase greenhouse gas emissions. That's another way they can be more friendly to cities.
4. New tech on top of old: Lyft says it's excited to use the Motivate network to build out more dockless options and include battery-powered bikes. These are newer technologies that can make the docked bike share model more competitive. Motivate actually already started doing this before the Lyft plans.
5. Uber deal: Lyft’s big competitor, of course, is Uber, which is far larger in terms of volume and reach. Uber’s acquisition of Jump Bikes earlier this year moved the ride-hailing gorilla into the category of offering multi-modal, more sustainable options and tapping into that virtual flexible vehicle infrastructure. No surprise that Lyft had to make a big move, too.
What else am I reading and thinking about? Here are 10 stories you should read:
- Your Tesla fix: For Tesla, the Best of Times, the Burst of Times, and Tesla Hits Model 3 Target and Focus Shifts to Sustainability: (Two takes from Bloomberg). Tesla hit a milestone of making 5,000 Model 3 cars last week, but is that production really sustainable?
- In case you haven’t had enough musing on Lyft, an essay on why a subscription might be their big play: Why Lyft is Trying To Become the Next Subscription Business (via Wired)
- New research from UCLA’s Institute of Transportation Studies that looks into how Lyft and Uber are providing mobility options for low-income neighborhoods.
- Amazon has a plan to launch a delivery service for Prime packages using small businesses. The "delivery service partners" won’t be employed by Amazon, and will cost small businesses owners $10,000 to participate. (via CNN)
- Google is building a city of the future in Toronto. Would anyone want to live there? (a deep dive from Politico).
- If you haven’t heard of CATL yet, get ready to. It's a Chinese battery maker that just went public and is signing deals to supply electric vehicles such as this one with BMW. (via Reuters)
- Long-haul trucks are exploring ways to use solar to power features in the tractor and also the trailer portions. Cool stuff from the North American Council for Freight Efficiency (NACFE).
- LOL: "Scooters littering U.S. city streets shout at people: 'Unlock me or I'll call the police'" (via the Guardian). The scooter arms race is experimenting with ways to maintain scooters, with some not-so-great ideas.
- Phoenix will no longer be Phoenix if Waymo’s driverless car experiment succeeds. (via MIT Tech Review)
- One more for Tesla fans: A simple org chart, which is, incredibly, so hard to find elsewhere. (from Bloomberg)