Drones, sidewalk robots and autonomous vehicles are being touted as some of the next big movers in the last-mile delivery space, but what of the humble bicycle?
Global logistics and delivery companies like UPS, FedEx and Amazon have all begun trialing some form of electric bike or cargo bike for delivery. At the same time, startups are cropping up to provide both fleets of micromobility vehicles for enterprises and e-bike subscriptions for couriers and gig workers.
As last-mile delivery increases due to a booming e-commerce scene and pandemic habits now ingrained in consumers’ lifestyles, the biggest market for micromobility will end up being in the commercial space, not focused on consumers.
“It makes little sense to deliver an iPhone or a poke bowl in a Buick,” Nate Jaret, general partner at Maniv Mobility, an Israeli VC that specializes in early-stage mobility companies, told TechCrunch. “Given the right tool, couriers can work faster and get better paid – and electric two- and three-wheelers are increasingly the right tool.”
The last-mile delivery market size is expected to hit $123 billion by 2030, at a compound annual growth rate of 13.21%. If the sector continues as it is now, that will look like a whole lot more trucks, vans and cars taking up space in cities and polluting the air that people breathe – not exactly the message we’re trying to send these days.
“It makes little sense to deliver an iPhone or a poke bowl in a Buick.” Nate Jaret, general partner at Maniv Mobility
Micromobility solves the problem that electric cars and vans don’t, particularly in urban centers – they are small enough to bypass traffic congestion and quick enough to make as many as two times more stops per hour than a delivery vehicle, according to John Pearson, DHL Express Europe’s CEO. The total cost of ownership of e-bikes is also minuscule compared to vans.
Working e-bikes into the logistics system also solves the problem that autonomous delivery vehicles – be they sidewalk robots or something a little bigger, like Nuro’s delivery vehicles – don’t. The technology is available now, not in 10 years.
These factors present a competitive advantage for businesses that want to reduce costs in the last mile, which is usually the most inefficient and costly part of the delivery chain.
“We believe that many commercial and delivery applications (and especially urban last-mile delivery) will electrify faster than consumer use-cases, due to total cost of ownership considerations – amortizing the higher upfront cost of any EV is much easier when the vehicle’s wheels are rolling eight or more hours a day,” said Jaret.