Vertical Integration On the Rise in Shared Micromobility

In a previous blog, I projected that consolidation in the micromobility industry will likely accelerate due to COVID-19-related impacts. Then, 5 weeks later, one of the largest e-bike sharing services, JUMP, merged with the largest e-scooter sharing service in the world, Lime, to form the world’s largest micromobility company. (As part of a $170 million funding round led by Uber, Lime acquired Uber’s bike business, JUMP.) The following table shows some of the other major business consolidation activity in the micromobility industry from 2018-2020, including the major acquisitions that occurred mid-pandemic (highlighted for emphasis).

Vendor Consolidation Activity, Micromobility Sharing Services: 2018-2020

(Source: Guidehouse Insights)

Vertical Integration Expands Consumer Access

While some companies are making acquisitions to expand access to other shared micromobility use cases (e.g., Lime acquiring JUMP to expand e-bike sharing coverage), vertically integrated transactions are also occurring to strengthen vendors’ solution offerings. For example, Cambridge, Massachusetts-based Superpedestrian launched an e-scooter sharing service called Link in June 2020. Before the launch, the company acquired the assets of Zagster’s scooter operations business, including permits, software, and intellectual property. (Zagster was a micromobility platform and fleet management service provider.) With its strengths in robotics, software, and technology development, Superpedestrian can now offer city customers a lower cost and more streamlined solution through its acquisition of Zagster.

Further Consolidation Is Coming

Consolidation in the micromobility industry will likely increase as vendors look to gain competitive advantage and manage risks from a potential second wave of the coronavirus. Additional lockdowns would pose a massive threat to many service providers and accelerate bankruptcies, layoffs, and acquisitions in the industry. Companies offering flexible micromobility program designs, differentiated and built-to-last products, and sound long-term business models are most likely to survive and thrive in this new business environment.