Shared mobility - Is there a sustainable business model?

More and more when walking in the large cities in Belgium, I stumble over (e)bikes, eSteps, scooters and cars from different companies, all offering shared mobility solutions and claiming to manage our mobility more efficiently and ecologically.

Even in a small country like Belgium, dozens of mobility providers are active (although many players come and go as well), e.g.

(e)Bike: Jump, Villo!, Billy Bike, Blue-bike, Fietspunt, Velo, Cloudbike or Spinlister
(e)Scooter: Scooty, Felyx or Poppy
(e)Step: Dott, Lime, Troty, Bird, Circ, Poppy, Tier, Flash or Hive
Car sharing: Cambio, Partago, Zipcar, Bolides, Poppy, stapp.in, CozyCar, Dégage, Tapazz, Caramigo, or Battmobiel
Car pooling: Eventpool, Karzoo, BlaBlaCar, Toogethr, Carpool or Airportstop

Currently shared mobility is still considered as trendy and innovative (a fun, affordable and efficient way to get around), which results in a lot of support of local governments for such initiatives. Nonetheless in many cities, the wild growth of shared bikes and steps "parked" all over the city, starts to create a lot of frustration and risks (e.g. in Barcelona already a mortal casualty with a Lime step).
Even though they definitely form an interesting solution for better mobility and a more sustainable (more eco-conscious) form of transportation, it’s clear that some regulation about how to use and where to "park" is in order.

But what is even more bizarre is the fact that all these initiatives expect to become profitable and sustainable businesses.

Most of these businesses are based on a model of growth-first backed by VC capital, not looking for profitability in the short-term, but rather to obtain a monopoly in certain cities. Once this monopoly is established and a large regular customer base has been built up, prices can increase and profitability should come naturally.

But even then I wonder if without subsidies from the government these models are sustainable, as the costs are high and revenues are uncertain and highly fluctuating, e.g.

Very seasonal business. While shared mobility is used a lot in the spring and in the summer, usage is a lot lower in the winter.
Difficulty to retain customers, due to the strong competition, but also because frequent users will ultimately buy their own step/bike, as this is cheaper when frequently used.
For example in Brussels, the usage of a Lime is €1 per use (i.e. to unlock) and 0,25 EUR per minute of usage. If we consider someone using it 5 days a week (back and forth for a distance of 3 km taking 8 minutes), we come to a total amount of 10 * 1 EUR + 10 * 8 * 0,25 EUR = 30 EUR / week at 52 weeks this makes 1.560 EUR. In this case buying your own step will be much more economical.
New models like monthly subscription models (e.g. for $100 offers up to 5 trips per day) try to keep the recurring users.
Fierce competition: high number of different players all competing for the same limited market
Lot of costs:
- IT costs to build and maintain the platform and app to reserve and pay
- Acquisition cost of the bikes, steps…, i.e. the initial acquisition (when opening service in a new city), but also the regular replacement as these solutions tend to have short lifetimes, due to incorrect usage, fact that they are always standing outside, vandalism (vehicles get destroyed before breaking even), theft…
- Fleet Operations for repairing and recharging the fleet, but also for moving vehicles to places with high demand. Usually this is do by independent contractors (often called "juicers" or "loaders" paid by recharged/repaired vehicle).
- Heavy costs for marketing (advertisement, discounts granted to attract new users…)
- Fight against fraud, e.g. phenomenon of hoarders (i.e. people collecting vehicles to collect a bounty for finding back the vehicle)
- High legal and lobbying costs, for approval of local governments (e.g. obtaining a license or permit, installation of docks if applicable) and avoiding lawsuits in case of accidents. In order to keep public opinion at their side, the companies need to show the benefits to municipalities. As a result the mobility providers need to invest more and more in safety solutions (e.g. solutions to penalize users when driving vehicle on pavements, reducing speed…), solutions to ensure proper parking of the vehicles (e.g. by posting picture of the parked vehicle at end of ride), offering discounts to low-income city inhabitants, avoiding trash vehicles by regular retrieval and repair of vehicles, limiting the number of vehicles (which can have an effect on revenues), ensuring proper working conditions of fleet operators (decent wage, often getting robbed, often reducing the ecological character of the fleet)…
  Many of these initiatives not only cost a lot of money, but often reduce the frictionless nature of the user journey, making the shared mobility service also less attractive.
- Hygiene issues: the Covid-19 crisis has painfully showed another risk of the business model. Not only do the (light) lock-downs in many countries result in no usage (and thus no revenues), but the shared aspect of the vehicles, provides also a lot of hygienical issues during this crisis.

The need for large amounts of VC-capital is best showed by the amounts of capital raised by different shared mobility companies:

Lime: already raised $800 million and is valuated at $2.4 billion
Bird: raised a total of around $700 million in funding and has valuation of around $2.8 billion
Mobike: Mobike has been sold to Meituan-Dianping for a reported $2.7 billion and accrued a total funding of $900 million
Ofo: total funding raised of $2.2 billion
Hellobike: total of $1.8bn in funding
…

For the user of such a shared mobility service, there are advantages but also disadvantages of such a shared mobility service (compared to your own vehicle):

Advantages:
- Maintenance and repair are handled for you
- High flexibility to choose the best way of transport at any moment
- Vehicle is well insured againt theft
- Only pay by usage, which is particularly interesting for the occassional users
- User does not have to take his vehicle along
Disadvantages:
- Not always possible to find vehicle nearby when you need one
- Vehicle not well adjusted to user’s personal preferences (like height, speed…)
- Time lost using the app to unlock and lock vehicle. This issue becomes larger when stronger safety measures are put in place.
- Pricing, i.e. more expensive especially for frequent users

The above demonstrates clearly that the market of shared mobility is a volume business, meaning it is "winner-takes-it-all" model. This means only a handful of companies (most likely the largest, best funded players, profiting from large-scale synergies) can survive, but even for those the multi billion dollar valuations are overestimated.

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