Fleet Management - The Key to Operating a Successful Micro-mobility Program

Fleet Management - The Key to Operating a Successful Micro-mobility Program

by Dan Grossman

Dan has been at the forefront of the shared economy, leading shared mobility initiatives at Ford, General Motors and Zipcar. Dan burst onto the shared economy scene in 2009, introducing Zipcar to nearly 80 new markets (if you're wondering, Hawaii was the most challenging) and seeing the company through its Initial Public Offering (IPO) and acquisition by Avis. Dan then became a founding member of the leadership team for General Motors' mobility brand, Maven. His success at Maven led to his first stint at Chief Executive Officer at Chariot, Ford's app-based shuttle service. Since May 2019, Dan is leading the team at Zagster.

unnamed (1).png

Dan Grossman

CEO

The e-scooter market is booming, but micro-mobility as a business model is still in its infancy. Like any new industry in its earliest stages, there are issues and challenges - but also positive signs of ways we in the industry can make micro-mobility work for the rider, the community, and the micro-mobility brand.

A recent New York Times report highlighted problems with scooter sharing in San Diego, where regulators and local residents have pushed back against scooters for clogging city sidewalks, creating safety concerns and accidents, and more. Due to mishandling by riders and others, the lifespans of these shared scooters have been relatively short: “scooter companies miscalculated how long the scooters would last — often not long enough for rental fees to cover their costs — and are struggling with profitability.” The city has responded with more regulation and increasing skepticism.

Let’s get things straight: chaos, like in San Diego, is the worst case scenario for those of us in the micro-mobility industry trying to win over communities looking to make investments in new modes of transportation for its residents and tourists. 

Current issues with micro-mobility programs

The problems that are happening in San Diego are not uncommon. Each week, I read another online article that talks about a different city struggling with the same issues:

1. Lack of regulation

There is a need for a better understanding how micro-mobility can fit within communities. City planners and transportation leaders are struggling at times with new transportation modes invading their communities. They understand the inherent value, but are either leaving regulations too loosely defined, i.e. “you can ride on the sidewalk or the street” or too strictly defined with too many no-ride zones that make it too inconvenient for riders to choose a scooter over their car.

2. Lack of collaboration

We still see micro-mobility brands “drop off” scooters across cities before ever having a conversation with an official. They believe that ridership will force the city to adapt to this new mode of transportation. But not all cities are designed for scooters, and lack of collaboration between the community and the micro-mobility brand can alienate city officials, and their lack of support will hinder adoption rather than let it thrive in a meaningful way. 

3. Lack of an existing revenue model

Investors have invested enormous sums of money into several micro-mobility brands. In some cases they are starting to question the initial revenue model and path to profitability with most scooter companies not projecting any profits for years to come. The poor economics seem to revolve more around the operations, including very high loss rate vs. the specific scooter.

4. Lack of safety

Scooters are not bikes. The smaller tires make even small potholes a risk to a rider. Helmets should be worn at all times, but often are not. Rider’s abuse the lack of enforcement when it comes to riding rules, and cities (especially those in the US) are not prepared for additional small vehicles and lack dedicated lanes, which would separate the rider from automobile traffic.

The three-legged stool

At Zagster, we have made a decision to address these issues through fleet management. What does that mean? First, it means that we do not own the assets; instead we partner with micro-mobility brands and operate their assets. Second, it means that we have invested in creating and refining processes that support the management and operations of their  assets. This includes our proprietary software, Wrangler, and an investment in our employees, who we hire locally in the markets we operate.

I often compare fleet management to herding cats. An asset starts out in one location and ends up in another. It’s then picked up a second time, delivered somewhere else, and then gets picked up a third and a fourth time. Some of these cats are collected three to 5 times a day. Managing this is not for the faint of heart and people + software + processes are critical to making the program a success - or if you’re missing those ingredients, leading to failure as in the case of San Diego. 

Success in fleet management is a three-legged stool. Here’s what it looks like: 

1. Higher revenue

Our launch team is based primarily at our headquarters in Boston and then deployed to markets prior to launch. They make the first hires, including bringing in the operation's manager. We use local talent, hiring sometimes up to 50 employees in the communities we operate in. These local employees know their communities inside and out, which helps us drive operational efficiency. 


We’ve got pristine warehouses across the country and a robust charging infrastructure, where we’ll have up to a thousand vehicles lined up so they can be deployed early in the morning and charged quickly in the evening. If vehicles are deployed in the right way and in the right condition - fully charged and with all the safety equipment fully functioning -  you’re going to see an increase in ridership, which translates to more revenue. In some of our markets each vehicle is used up to eight times on average per day. This drives revenue for all the parties involved in the program. 

2. Lower loss rate

We have all seen the images of scooters thrown into lakes or abandoned behind some nondescript building at the edge of the community. A company might lose 20-30 percent of their scooters per month. That erodes profitability quickly - and also trust from the community. 

We have developed a rider scoring system that allows us to predict the loss of a vehicle due to rider behavior. Rider Score is exactly what it sounds like, a numeric score assigned to an individual rider that attempts to map that rider’s ride behavior through the lens of factors that generally result in assets going missing. Again, this score is wholly behavior based and generated from actual ride data. The current version of this scoring system bears little resemblance to the simple system we initially designed. Using machine learning, we were able to develop a model to identify a constellation of over 100 predictive factors that linked riders identified as struggling, confused, or in rare cases, malicious and connected to missing assets.

3. Better rider experience

It doesn't pay to show up in a city without permission, unannounced. Zagster closely collaborates with city managers, mayors, and/or city councils to develop micro-mobility programs. If you don't collaborate, you're going to be reacting to regulations rather than being part of developing them up front. Safety is a foundational concern for communities and for us. Whenever we launch in a new market, we give away helmets and hold safety workshops ahead of the launch. We are vigilant in promoting safety and the use of helmets. A scooter is not a bike. 

Wrangler is our technology backbone and it’s vehicle-agnostic: it future-proofs the investment communities make toward a micro-mobility program and can be deployed for bikes, e-bikes, scooters, and future modes of micro-mobility (any cat you could possibly imagine). 

Ready for fleet management?

To put this all in a nutshell, effective fleet management is needed to drive user adoption of micro-mobility, prevent loss of vehicles, and create great rider experiences, all of which will keep city officials and riders happy and provide micro-mobility brands with the ROI they’re looking for. “Scooter chaos,” as seen in San Diego, is not the way forward for micro-mobility, but effective fleet management is.


Want to learn more about Zagster’s fleet management solutions and how they might benefit you? Contact us today.