Drones, sidewalk robots and autonomous vehicles are being touted as some of the next big drivers in the last-mile delivery space, but what about the humble bicycle?
Global logistics and delivery companies such as UPS, FedEx, and Amazon have begun testing some form of electric bicycle or cargo bike for delivery. At the same time, startups are emerging to provide both fleets of micromobility vehicles for businesses and e-bike subscriptions for couriers and gig workers.
As last-mile delivery increases due to the booming e-commerce scene and pandemic habits now ingrained in consumer lifestyles, the biggest market for micromobility will ultimately be in the commercial space rather than consumer-focused.
“It doesn’t make a lot of sense to ship an iPhone or a bowl in a Buick,” Nate Jarrett, general partner at Maniv Mobility, an Israeli VC specializing in early-stage mobility companies, told TechCrunch. “With the right tool, couriers can work faster and get paid better – and electric two- and three-wheeled vehicles are increasingly the right tool.”
The size of the last mile delivery market is expected to reach $123 billion by 2030, with a total annual growth rate of 13.21%. If the sector continues as it is now, it will look like a lot more trucks, vans and cars taking up space in cities and polluting the air people breathe – not exactly the message we’re trying to send these days.
“It doesn’t make much sense to ship an iPhone or a punch bowl in a Buick.” Nate Jarrett, General Partner at Maniv Mobility
Micromobility solves a problem that electric cars and vans don’t, especially in city centers – they’re small enough to bypass congestion and fast enough to make up to twice as many stops per hour as a delivery vehicle, according to John Pearson, CEO of DHL Express Europe. The total cost of ownership of electric bikes is also negligible compared to vans.
Incorporating e-bikes into the logistics system also solves the problem of autonomous delivery vehicles – whether they are sidewalk robots or something a little bigger, such as Nuro’s delivery vehicles – do not. The technology is available now, not 10 years from now.
These factors represent a competitive advantage for businesses looking to reduce costs in the last mile, which is typically the most inefficient and expensive part of the supply chain.
“We believe that many commercial and delivery applications (and especially urban last-mile delivery) will electrify faster than consumer cases due to total cost of ownership considerations – amortizing the higher upfront cost of each EV is much easier when the car’s wheels are spinning eight or more hours a day,” Jarrett said.