Beyond avoiding the micromobility tragedy
Photo via @TomMillerKXAN
Even though micromobility is a great innovation that can help cities fill the last mile gap, it can lead to a tragedy of the commons scenario. We take a look not only at some successful approaches to regulating this offer, but also at how cities can capitalize on the data created by micromobility operators to better plan their overall mobility.
Lessons learned from the Chinese “tragedy”
Collective action problems emerge when individuals or groups take rational decisions based on their own interest, while producing negative consequences for everyone. Free-floating shared-bicycle and scooter systems - together known as micromobility - are a recent example of this old concept. Unlike docked bicycles schemes, free-floating systems do not have dedicated parking stations.
The Chinese case is arguably the most interesting one to understand this collective action problem and the reasons why micromobolity is more about technology and investment funds than actually about mobility. As a private and equity-driven business, cities cannot control micromobility’s volatility. Shifts in supply respond more to funding rounds than to actual transport demand.
Free-floating bike-sharing schemes have displayed neck-breaking growth rates in the past years. According to Arthur D. Little, a research firm, in 2017, there were more than 20 million shared bikes in China. Free-floating companies together had raised over 20 billion RMB, but many of them are on the brink of bankruptcy few years later. The Chinese case set a high-motion precedent that is worth analyzing from any other region in the world.
“As a private and equity-driven business, cities cannot control micromobility’s volatility. Shifts in supply respond more to funding rounds than to actual transport demand.”
A common pool of bicycles and scooters
The operation of the micromobility industry reflects a two-tiered collective action problem, with nuances from one city to the other, but overall present in all the cities where it has been introduced. On one side, fierce competition based on quantity as the differentiator between firms led to oversupply. By encroaching large portions of the public space, these systems become a mobility problem, namely for pedestrians, as well as a sustainability one, given the challenge of dealing with the waste created by thousands of abandoned or damaged bikes. Tech companies use public spaces (streets, sidewalks, parks, plazas, etc.) as a common pool resource. They use this resource according to their own interest, maximizing their benefits through increased market share. They overuse the resource, because they are able to obtain the benefit of doing so, while incurring no direct cost. Firms are aware of this issue, but they fail to cooperate because they face a classic prisoner’s dilemma. This first tier constitutes an example of the tragedy of the commons, just like the case of climate change, with countries that do not limit their GHG emissions in anticipation of others’ non-compliance.
On the other side, riders also use the bike fleet as an almost infinite common resource. The ease of finding one wherever they are encourages users not to take care of the two-wheelers and to park them in inappropriate places. This second layer is an example of free-riding, as users are not contributing to the supply of the public good: a fleet of well-functioning bicycles located not only conveniently but also mindful of other urban fluxes. The result of these two problems contradicts the stated goal of the sharing economy of optimizing resource use by replacing ownership with access.
The Tianjin model
As local governments are responsible for regulating the use of public spaces, large cities like Beijing and Shanghai initially opted for limiting the number of bicycles. Nevertheless, Tianjin, a city in northern China that decided not to set a cap, is the city known for having most successfully regulated micromobility in the country. Instead, it opted for drafting specific operation and maintenance standards. Operators must hire sufficient staff to maintain a well-functioning and adequately distributed fleet (at least one maintenance employee for every 200 bicycles). Additionally, it required each bike to be equipped with GPS and to have a service life of at least three years. The cornerstone of this regulation is the use of geofencing technology to mark off parking areas. Operators must in turn show these areas in their apps. They can use either carrots, sticks or both to encourage their clients to respect them.
All these measures aim at tackling the two tragedies of the commons mentioned above. Tianjin went further, and enacted comprehensive regulations related to another critical variable that goes beyond minimizing the nuisances to urban life introduced by micromobility: data sharing. Regulations specify that operators must share data on users’ profiles, ridership and bike locations through a jointly accessible database.
In January 2018, the China Academy of Information and Communications Technology built a free-floating bike sharing platform for cities to access operator data. This data will serve as critical input to plan future micromobility infrastructure. Alternative transportation modes mainly fill the last mile gap and knowledge sharing between local officials and private operators could catalyze that goal. Applying operator-compiled data to the design of cycling, but also transit infrastructure, can make micromobility safer, more comfortable and intermodal.
Regulating micromobility in Latin America: different challenges
Micromobility landed in Latin American cities in 2018, when e-scooters and shared bicycles started operating. Average purchasing power in the region is lower than in the cities where the service emerged, meaning that these devices are only accessible to high-income commuters. Moreover, operators only offer the service in affluent neighborhoods. Finally, above-average theft and vandalism has made operators more precautious. For these reasons, Chinese-style oversupply is unlikely to happen in the region.
The city of Bogotá is in the process of drafting a regulatory framework for these devices. The activity has been framed as a form of public space usufruct and thus requires operators to pay the municipality. Bogotá’s Secretary of Mobility designated off-street parking areas through geofencing and physically demarcated them. Other non-demarcated on-street areas deemed suitable for parking appear in micromobility apps, and the rider should respect a set of rules to prevent traffic obstruction. Additionally, operators must submit plans specifying adequate fleet management and road safety measures. Concerning data sharing, operators must also create a shared platform. They must submit monthly reports with road accidents and pricing data, two elements that are particularly relevant in Latin American cities, due to higher price-elasticity for transport. These rules are aligned with Tianjin’s approach and, if enforced properly, will make micromobility a win-win game for the city, riders and companies alike.
Ultimately, cities do not only have the responsibility to regulate the operation, which is fairly feasible even if it requires planning and enforcement, but also to capitalize on the technological component of micromobility by gathering all the data generated. Bogotá seems to have understood that it can do more than just minimizing negative micromobility’s externalities, it can foster positive ones.
In a sense, shared-bikes and e-scooters are more akin to informal transport modes like tuk-tuks or moto-taxis, or even street vending in terms of inappropriate public space use. The main difference is data, which should be used by local governments for the public good by better mapping and analyzing mobility patterns. This would contribute to better spending and a virtuous circle in transport planning.
Andrés Melendro Blanco previously worked as an editor for The Business Year, an international media group, as a consultant for UN-Habitat and as an urban development analyst at ProBogotá, a think-tank dedicated to fostering Bogotá’s sustainability. He holds a bachelor’s degree cum laude in Political Science and a master’s degree in Urban Policy, both from Sciences Po Paris.