Advanced rider assistance systems: Tech spawned by the politics of micromobility

The desire to achieve something as simple as keeping shared electric scooters off sidewalks has driven the development of some advanced technology in the micromobility industry. Once the province of geofencing, scooter companies are so eager to get a leg up on the competition that they’re now implementing technology similar to advanced driver assistance systems (ADAS) usually found in cars.

Operators like Spin, Voi, Zipp, Bird and Superpedestrian are investing in camera-based or location-based tech that can detect and even correct poor rider behavior, sometimes going to the extent of slowing scooters to a stop if they’re riding on a sidewalk.

People riding or parking scooters on sidewalks is a big problem for cities and forms one of the main complaints from NIMBYist residents who dislike change all the more when it becomes a tripping hazard. Companies are trying to solve this problem with tech that effectively puts the onus of rider behavior on operators, which may result in cities requiring scooter operators to have this sort of ADAS tech.

Scooter ADAS is probably the most doable and cost-effective method that cities can use to prevent unwanted rider behavior. And, it’s far cheaper than trying to police rider behavior themselves, or, address the lack of protected cycling infrastructure.

“This technology comes from a need for protected bike lanes,” said Dmitry Shevelenko, co-founder and president of Tortoise, an automated vehicle positioning service for micromobility companies. “It exists in this world where riders kind of have to do things that aren’t that great for others, because they have nowhere else to go. And so that’s the true driver of the need for this.”

Cities can solve this problem for the long term by building bike lanes or creating scooter parking bays, but until that happens, operators need to reassure local administrations that micromobility is safe, compliant and a good thing for cities.

“Until cities have dedicated infrastructure for whatever new modality comes to play, you have to figure out a way to use technology to make sure things don’t mix poorly,” said Alex Nesic, co-founder and chief business officer of Drover AI, a computer vision startup that provides camera-based scooter ADAS. “That’s really what we’re after. We want to enable this kind of maturation of the industry.”

Street views versus satellite views

Drover AI works with Spin, while Luna, another computer vision company, works with Voi and Zipp to attach cameras, sensors and a microprocessor to scooters to detect lanes, sidewalks, pedestrians and other environmental surroundings.

Plentywaka founder Onyeka Akumah on African startups and global expansion

Plentywaka wants to change the way Africans move. It’s starting with one of the busiest cities on the continent.

The startup, a ride-share and bus-booking platform, is based in Lagos, the Nigerian city where 20 million people and 45% of the country’s skilled workforce live. The public transportation system strains under the weight of 14 million commuters who use it daily.

Relying on the public bus can be more than unpredictable — it also can be dangerous, according to Onyeka Akumah, co-founder and CEO of Plentywaka. The buses are often old, in disrepair and packed beyond safe limits; traffic congestion turns what should be a 30-minute commute into a three-hour journey.

Plentywaka, a combination of English and Nigerian that means “plenty movement,” was founded in 2019. While it’s still young, the startup has big plans to ameliorate the public transport infrastructure in Africa and beyond.

Plentywaka has two models. “Daily Waka” offers riders in a city fixed daily routes from bus stop to bus stop. Riders can view the schedule of buses, how many seats are available and reserve seats via the app, which tracks the movements of SUVs, minivans, vans and buses driven by gig workers, also known as “heroes.” When the bus arrives, riders can check in with a QR code, and when they hop off, the app automatically charges the rider via a wallet system.

“Travel Waka” is a newer model that offers interstate travel. It basically serves as a booking engine for other bus companies that offer city-to-city services.

In March this year, Plentywaka was accepted into the Techstars Toronto accelerator program, securing funding as it looks toward global expansion across Africa and into Canada. Just this month, the company also announced expansion plans into Ghana via an acquisition of Star Bus.

Akumah talks us through what the TechStars funding means to Plentywaka, the startup landscape in Africa and tips for African startups looking for investors.

The following interview, part of an ongoing series with founders who are building transportation companies, has been edited for length and clarity.

Before founding Plentywaka, you were the CEO of Farmcrowdy, another startup that connected investors to farmers via a digital platform. What was the impetus for starting a second business? Are you a serial entrepreneur, or do you plan on sticking with this one?

I was the CEO of Farmcrowdy until the end of May this year, but I’ve handed it over to my other co-founder who is now the CEO, so I’m fully focused on Plentywaka now. We started Plentywaka in January 2019. I was flying back from Qatar, where I spoke at an event, and landed in Lagos around 8:15 a.m. that day. I had to be at a meeting by 10 a.m., and going through traffic in Lagos is a pain. The state has 20 million people and everybody’s rushing to work, so I had to abandon my car and take two bikes to make that meeting. When that was done, to make another meeting, I had to take a boat ride across the lagoon. I tweeted about it saying, “Today, I have flown, I have used two bikes and now I’m on a boat ride. This is the life of an entrepreneur in Lagos.”

What I wasn’t prepared for was the shock my colleagues gave me when they said we should experiment with taking the bus. I hadn’t taken the bus in about 15 years, and I took that trip and had a panic attack. I never knew how frightened I would be getting on a 30-year-old bus with torn-out parts and worn-out chairs. I literally had to hold one of the doors throughout the trip from falling off. That was the day the concept of Plentywaka started.

Zūm CEO Ritu Narayan explains why equity and accessibility works for mobility services

Getting children to school safely and reliably is a challenge as old as public education itself. But rarely have any entrepreneurs tackled the problem of updating and optimizing one of the nation’s largest legacy transit systems, now nearly a century old. It’s still common to find people at U.S. student transportation hubs speaking into walkie-talkies and wrangling clipboards as they sort passengers into gas-guzzling yellow buses.

Ritu Narayan was working as a product executive at eBay when her two children began attending school. Finding safe and reliable options for getting them to campus was sometimes so difficult that anytime those options would fall out, she would be on the verge of leaving her job.

“We had the minimum viable product, which we expanded upon, built the entire platform, and we kept on going to better places with our solutions.”

Bearing in mind that her mother in India had set aside a career to raise Narayan and her three siblings, she founded Zūm in 2016 with brothers Abhishek and Vivek Garg to optimize routes, create transparency and make school commutes greener; since then, Zūm has operated in several California districts (including San Francisco), as well as in Seattle, Chicago and Dallas. In Oakland, Zūm has optimized routes to reduce the previous bus requirement by 29 percent, with the balance being serviced by midsized vehicles.

Zūm also plans to have a fleet of 10,000 electric school buses by 2025 and is partnering with AutoGrid to transform that fleet into a virtual power plant with the potential capacity to route 1 GW of energy back to the grid.

To get a deeper look into the startup’s plans and hear what Narayan has learned from its journey so far, we discussed the pandemic’s impacts on Zūm’s development, where she thinks the company will be a year from now, and how she convinced investors to back a business model that embraces accessibility and equity.

(Editor’s note: This interview has been edited for clarity and length.)

How did COVID-19 affect your business? What percentage of your business is back now?

It’s funny, because we used to say that student transportation is a recession-proof business, and no matter what, kids are still going to go to school, but the pandemic was the first time in probably the last 100 years when kids across the globe did not go to school. It was an interesting time for us, because overnight, all the rides were closed and we had to focus on what was needed immediately to support our districts and students.

We realized that the school is such an important physical infrastructure that’s not just for education, but students get meals there as well as physical and emotional help. So we helped the school districts with reverse logistics, taking the meals or laptops from the school districts and delivering them to homes, because our software could handle that kind of thing. That was just an interim to make sure the communities settled. Starting last year, rides started coming back around 30%, and this year starting in April, it has been 100% back in the business.

Startups and investors are turning to micromobility subscriptions

Amid the chaos of the COVID-19 pandemic and the murky path to profitability for shared electric micromobility, an increasing number of companies have turned to subscriptions. It’s a business model that some founders and investors argue hits the profit center sweet spot — an approach that appeals to customers who are wary of sharing as well as paying upfront to own a scooter or e-bike, all while minimizing overhead costs and depreciation of assets.

Many investors think the subscription model will broaden the micromobility market, positioning it essentially as a software-as-a-service business, which achieves a higher multiple.

Across the United States, Europe, some of Canada and at least one Middle Eastern city, existing mobility companies are adding a subscription business line to their repertoire, and entirely new companies are being formed on the basis of the hardware-as-a-service model. But will this new playbook push the unit economics of micromobility in a positive direction? And what will determine which companies win at the subscription game?

In general, subscriptions for everything from groceries and streaming video to exercise equipment and clothing are on an upward slope. Subscription businesses are expected to grow at a rate of 30% this year, according to a 2021 study by digital services monetization company Telecoming.

Micromobility vendors keen to follow other industries into this model are focused on several factors, according to experts following the industry: the ease of scaling, return on investment and cost-per-mile to operate.

“Subscription services for a single vehicle are far more interesting and scalable than the subscription model that was trialed by the shared mobility services,” Oliver Bruce, angel investor and co-host of the Micromobility Podcast with Horace Dediu, told TechCrunch. “The cost per kilometer is just an order of magnitude smaller, and it’s not constrained by citywide caps.”

Shawn Carolan, managing director at Menlo Ventures, is also bullish on the micromobility subscription model because it makes more sense for the consumer, as most people will prefer to pay a low monthly fee rather than a higher upfront fee.

“The best customers are repeat customers, commuters or local neighborhood trips,” Carolan said. “Repeatedly paying per ride is both expensive and cognitively taxing. People want low friction in transportation. Getting from here to there shouldn’t require a lot of thought.”

The key players: E-bikes

Bird and Lime might dominate the shared micromobility space, but they’re not leading the subscription market, largely because their bikes and scooters are built to be heavier and more robust in order to handle city usage. Their operating systems are also designed to manage fleets and keep the vehicles in specific territories within a city. Bird and Spin have announced intentions to offer subscriptions, but so far there’s only been a chance to sign up for a waitlist.

Meanwhile, subscription services tend to offer lighter-weight vehicles that can be carried up flights of stairs or even folded down.

Swapfiets, the bike-sharing company with the distinctive blue front wheel, is one of the pioneers in the world of bike-sharing. In 2015, Richard Burger, Martijn Obers and Dirk de Bruijn started the Dutch company as university students in Delft when they realized that owning a bike could be somewhat of a hassle. The Netherlands is renowned for having more bicycles than people, but that doesn’t make it any easier to buy, sell and maintain them, especially with such high fees at bike shops.

“We asked how we could shift this and get only benefits from using a bike to go from A to B and not have all this hassle,” Burger told TechCrunch. “And for us, the subscription model was really the realization that would fix that.”

Outdoorsy co-founders detail how they expanded the sharing economy to RVs

Jen Young and Jeff Cavins were sitting in a beige conference room at a downtown Vancouver hotel, wasting away under fluorescent lights, an endless PowerPoint and a pair of sad Styrofoam cups of coffee between them. Young was there on a marketing contract. Cavins was a board member. They shared one of those looks that only couples can understand. It said: There’s got to be something better than this.

With 40 years of running technology companies under Cavins’ belt and a successful ad agency career under Young’s, the two decided to craft a business around their shared passion of being out in nature. When they realized there are more than 20 million recreational vehicles all across the U.S., most of which are used only a handful of days, they saw an opportunity. They asked themselves: How do we create memorable outdoor experiences and make them available to everybody?

For seven months, the couple traveled across the U.S. to do market research on travelers and RV owners to form the basis of their company.

The sharing economy of Uber, Lyft and Airbnb had already laid the groundwork. Why not open it up to RVs?

In 2014, Young and Cavins invested their life savings into Outdoorsy, sold their homes and jumped into an Airstream Eddie Bauer trailer. For seven months, the couple traveled across the U.S. to do market research on travelers and RV owners to form the basis of their company.

In June, Outdoorsy raised $90 million in a Series D led by ADAR1 Partners, as well as an additional $30 million in debt financing from Pacific Western Bank. The money will be used in large part to accelerate the growth of Outdoorsy’s insurtech business, Roamly. In the same month, the company announced a partnership with glamping company Collective Retreats to expand its outdoor offerings.

The following interview, part of an ongoing series with founders who are building transportation companies, has been edited for length and clarity. 

You’ve taken a personal approach to your business, spending months in the research phase actually living in an RV and interviewing RV owners and their families around the country. How do you think that’s shaped your business?

Jen Young: When we lived on the road, we had to experience that customer experience every day for hundreds of days. So this is where we were able to pick up and identify what the biggest pain points were on the renter and the owner side and start tackling those first.

For example, we understood what was most important from an insurance perspective because we could hear the voices of renters and owners — they consider these things their babies in many cases.

The owners that are more entrepreneurial-minded, they consider them more of a business asset, but both of them want to know, “What am I going to get for liability insurance? Comp and collision? Interior damage?” The detailed list of those things became the beginning of the product roadmap, as well as itemizing what things have to occur for a good guest experience.

In what ways have you had to pivot your model based on how people have used your platform? 

Cavins: One of the things we learned is most renters don’t want to drive these things, so owners started to do delivery, which became very popular on our platform. Sixty percent of all owners now will just deliver and set up for you so you can arrive at your campsite and everything’s just done. Your chairs are out, your barbecue is out, your awning is out and maybe a bottle of champagne in your fridge for you.

When Jen and I were traveling last year, we saw that most of the American landscape of campgrounds and campsites were overbooked. People couldn’t get their reservations closed the way that you would expect in a world of technologically evolved industries, and we thought there had to be something better in terms of the customer experience for camping, which really catalyzed our investment in glamping company Collective Retreats.

Why is Didi worth so much less than Uber?

Years ago, U.S. ride-hailing giant Uber and its Chinese rival Didi were locked in an expensive rivalry in the Asian nation. After a financially bruising competition, Uber sold its China-based business to Didi, focusing instead on other markets.

The two companies are coming head-to-head again, however, as Didi looks to list in the United States. The company’s IPO filing was big news for the SoftBank Vision Fund, Tencent and Uber, thanks to its stake in Didi from its earlier transaction.

But Didi appears set to be valued at a discount to Uber. By several tens of billions of dollars, it turns out. And we can’t quite figure out why.

This week, Didi indicated that it will target a $13 to $14 per-share IPO price, with each share on the U.S. markets worth one-fourth of a Class A share in the company. In more technical language, each ADR is 25% of a Class A ordinary share in Didi, if you prefer it put like that.

With 288 million shares to be sold in its U.S. IPO, Didi could raise as much as $4.03 billion, a huge sum.

What’s Didi worth at $13 to $14 per ADR? Using a non-diluted share count, Didi is valued between $62.3 billion and $67.1 billion. Inclusive of shares that may be issued thanks to vested options and the like, Didi could be worth as much as $70 billion; Renaissance Capital calculates the company’s mid-point valuation using a fully diluted share count at $67.5 billion.

Regardless of which number you prefer, Didi is not set to challenge Uber’s own valuation. Yahoo Finance pegged Uber at $95.2 billion as of this morning.

Why is the Chinese company worth less than its erstwhile rival? Let’s dig around in their numbers and find out.

Didi versus Uber

As a reminder, Uber’s Q1 2021 included adjusted revenues of $3.5 billion, a gain of 8% compared to the year-ago quarter. And Uber’s adjusted EBITDA came in for the period at -$359 million.

May Mobility’s Edwin Olson and Nina Grooms Lee and Toyota AI Ventures’ Jim Adler on validating your startup idea

When a founder has a work history that includes the name of the parent company of one of their key investors, you probably assume that was one of the first deals to come together. Not so with May Mobility and Toyota AI Ventures, which connected for the company’s second seed round, after May went out and raised its original seed purely on the strength of its own ideas and proposed solutions.

That’s one of the many interesting things we learned from speaking to May Mobility co-founder and CEO Edwin Olson, as well as Chief Product Officer Nina Grooms Lee and Toyota AI Ventures founding partner Jim Adler on an episode of Extra Crunch Live.

Extra Crunch Live goes down every Wednesday at 3 p.m. EDT/noon PDT. Our next episode is with Sequoia’s Shaun Maguire and Vise’s Samir Vasavada, and you can check out the upcoming schedule right here.

Meanwhile, read on for highlights from our chat with Olson, Grooms Lee and Adler, and then stay tuned at the end for a recording of the full session, including our live pitch-off.

A different approach to corporate VC

One thing Adler brought up early in the chat is that Toyota AI Ventures likely takes a different approach than most traditional corporate VCs, which are often thought of as being more incentivized by strategic alignment than by venture-scale returns. Adler says the firm he founded within the automaker’s corporate umbrella actually does behave much more like a traditional VC in some ways than many would assume.

The battle for voice recognition inside vehicles is heating up

Once a fringe feature found only in luxury vehicles, voice recognition has moved into the mainstream as more automakers promise a seamless connection between your car, home and all the devices in between. The opportunity to reach consumers in their vehicles — and collect all that data — has automakers, tech giants like Amazon and Google, as well as investors scrambling for a share of the connected cars market.

But this is just the beginning. Voice recognition is expected to be an essential feature in future autonomous vehicles, which will see drivers ultimately surrendering the ability to control the car mechanically. Other applications for voice recognition are also emerging, including automated drones, two-wheelers and even air taxis.

The upshot? A market with significant growth potential and opportunities for investors and companies of all sizes.

The opportunity

The share of cars featuring in-car connected services, which voice recognition requires, grew to 45% in 2020 from 30% in 2018, and is expected to reach 60% by 2024, according to IHS Markit. Automakers keen to improve the consumer experience are driving that growth, said Kyle Davis, IHS Markit’s senior analyst for vehicle experience and connected car, noting that “one of the biggest aspects of the user experience is voice.”

Voice recognition is becoming more common, but that doesn’t mean the technology is always received well by consumers. J.D. Power surveys consistently show consumers complaining about voice recognition systems in vehicles, said John Scumniotales, director of products and design for Alexa Auto at Amazon. Scumniotales sees this as an opportunity to improve that experience with Alexa, and help Amazon gain an even larger foothold in the marketplace.

While there are clear giants in the voice recognition field, there won’t ever be one system or type of digital assistant in vehicles, according to Greg Basich, associate director of Strategy Analytics’ global automotive practice. “You’re going to see multiple systems,” Basich said. “So it’s definitely a growing space.”

Startups will have to contend with behemoths like Google and Amazon, Basich said, adding, “It’s a tough market if you’re a startup (…) You need to be doing something very new or very different.”

In his view, automakers prefer to work with larger, more established companies that can provide long-term support for the technology once it’s in the vehicle. Amazon’s Scumniotales agrees, as the big companies are at a huge advantage since it takes a significant amount of investment to build the technology and then to do it at the scale required for the automotive industry.

Yet, a closer look indicates there is not only room for a number of players, but automakers aren’t always placing their bets on the biggest companies.

The players

Partnerships between automakers and Amazon Alexa or Google get much of the buzz. However, Cerence, a publicly traded company spun off from Nuance Communications in October 2019, actually controls 87% of the embedded virtual personal assistant market, according to Davis.

“The space is pretty small and we’re the largest and most entrenched player in it,” Cerence CTO Prateek Kathpal said in a recent interview. He believes that his company is small enough to take risks, innovate and not be hamstrung by funding issues like a traditional startup.

In January, the company unveiled Cerence Drive, its new platform for mobility assistants that integrates cloud and embedded technologies to provide what it describes as a more seamless and accurate AI voice-recognition experience. The system can support more than 70 languages and can understand commands when vehicle occupants are speaking multiple languages at the same time. It also can comprehend complex, multi-step queries and commands like, “Find directions to Starbucks and also call my mom.”

Cerence has landed a number of customers over the years, including BMW, which has been using the company’s technology since 2000. Simon Euringer, head of personal assistants and voice interaction at BMW, is particularly impressed by Cerence’s hybrid system, which operates both via an embedded system and in the cloud, and provides answers through whichever of the two systems is quicker at the time.

Micromobility’s next big business is software, not vehicles

The days of the shared, dockless micromobility model are numbered. That’s essentially the conclusion reached by Puneeth Meruva, an associate at Trucks Venture Capital who recently authored a detailed research brief on micromobility. Meruva is of the opinion that the standard for permit-capped, dockless scooter-sharing is not sustainable — the overhead is too costly, the returns too low — and that the industry could splinter.

“Because shared services have started a cultural transition, people are more open to buying their own e-bike or e-scooter,” Meruva told TechCrunch. “Fundamentally because of how much city regulation is involved in each of these trips, it could reasonably become a transportation utility that is very useful for the end consumer, but it just hasn’t proven itself to be a profitable line of business.”

As dockless e-scooters, e-bikes and e-mopeds expand their footprint while consolidating under a few umbrella corporations, companies might develop or acquire the technology to streamline and reduce operational costs enough to achieve unit economics. One overlooked but massive factor in the micromobility space is the software that powers the vehicles — who owns it, if it’s made in-house, and how well it integrates with the rest of the tech stack.

It’s the software that can determine if a company breaks out of the ride-hailing model into the sales or subscription model, or becomes subsidized by or absorbed into public transit, Meruva predicts.

Vehicle operating systems haven’t been top of mind for most companies in the short history of micromobility. The initial goal was making sure the hardware didn’t break down or burst into flames. When e-scooters came on the scene, they caused a ruckus: riders without helmets zipped through city streets and many vehicles ended up in ditches or blocking sidewalk accessibility.

City officials were angry, to say the least, and branded dockless modes of transport as a public nuisance. However, micromobility companies had to answer to their over-eager investors — the ones who missed out on the Uber and Lyft craze and threw millions at electric mobility, hoping for swift returns. What was a Bird or a Lime to do? The only thing to do: get back on that electric two-wheeler and start schmoozing cities.

How the fight for cities indirectly improved vehicle software

Shared, dockless operators are currently in a game of Survivor, fighting to get the last remaining city permits. But as the industry seeks a Business to Government (B2G) model that morphs into what companies think cities want, some are inadvertently producing vehicles that will evolve beyond functional toys and into more viable transportation alternatives.

The second wave of micromobility was marked by newer companies like Superpedestrian and Voi Technology. They learned from past industry mistakes and developed business strategies that include building onboard operating systems in-house. The goal? More control over rider behavior and better compliance with city regulations.

Most companies playing to win have begun to vertically integrate their tech stacks by developing or acquiring new technology. Lime, Bird, Superpedestrian, Spin and Voi all design their own vehicles and write their own fleet management software or other operational tools. Lime writes its own firmware, which sits directly on top of the vehicle hardware primitives and helps control things like motor controllers, batteries and connected lights and locks.