last mile transportation
Auto Added by WPeMatico
The uncertain future of shared electric scooters
Cities all over the world have seen an influx of two-wheeled, electric kick scooters on the road over the last couple of years. Scooters from the likes of Bird, Lime, Spin, Uber’s JUMP, Lyft and others are all trying to own the first and the last mile. The first mile is often understood as the distance between a transportation hub and someone’s starting point while the last mile is the distance between a transportation hub and someone’s final destination. These companies want both, and some (Uber, Lyft) also want everything in between.
The rise of electric scooters is often compared to the rise of ride-hailing, but there are some key differences at play. For one, cities are in charge of regulation — not the states. And since these are much smaller vehicles, cities can easily pick them up and throw them in the back of a truck if they become a nuisance. Meanwhile, as part of city regulation, data-sharing is not optional — it’s a requirement in order for companies to receive permission to deploy scooters on city streets.
The startup ecosystem had become accustomed to the ethos of begging for forgiveness, rather than asking for permission. But that’s not the case with electric scooters. These companies have found their entire businesses to be contingent on the continued approval from individual cities all over the world. That inherently creates a number of potential conflicts.
It’s also unclear whether the increase in people riding scooters is indicative of people adopting shared services or simply adopting a new mode of transportation. Some industry insiders wonder if it’s just a matter of time between consumers ditch shared scooters in exchange for their own.
Between city regulators capping the growth of operators, the vast number of companies going after the first and last miles and the threat of the shift from shared to ownership, it’s all going to come down to the survival of the fittest.
At the mercy of cities
Unlike the ride-sharing market, electric scooter operators are entirely dependent upon cities. These cities, rightfully so, have a number of concerns ranging from safety to sidewalk congestion to equal access to transportation.
Powered by WPeMatico
Flash, the stealthy e-scooter and ‘micro-mobility’ startup from Delivery Hero founder, raises €55M Series A
Flash, the stealthy mobility startup from Delivery Hero and Team Europe founder Lukasz Gadowski, is de-cloaking today, with news that the Berlin-based company has raised a whopping €55 million in Series A funding.
Despite rumours that multiple VC firms would be involved, the bulk of the new funding comes from Target Global via its mobility fund, which led this round and was already an existing backer of Flash. Others participating in Flash’s Series A include Idinvest Partners, Signals Venture Capital and a number of unnamed angel investors.
Notably, Gadowski is listed as an Entrepreneur in Residence at Target Global, and has been broadly working in the mobility space for the past two years. Rather quietly, he is also an investor in Grin, the Mexico City-based electric scooter company backed by Y Combinator.
In a call with Gadowski, he filled in many of the blanks relating to his new venture, including positioning Flash as a “micro-mobility” company that wants to solve the last-mile transportation problem. The startup is initially entering the e-scooter rental space, but this is just the beginning, he says. More broadly, the way he and his team think about Flash is that it is “unbundling” the car, with new forms of transport.
“In a few years time, micro-mobility will look very different from today,” says Gadowski, revealing that before founding Flash last year, he also took a hard look at new forms of aviation.
Even though it is still very early days for Flash, the startup already boasts a current team of more than 50 full-time employees, recruited from the likes of Uber, Amazon, and Airbnb. Alongside Gadowski, the other Flash co-founders are Carlos Bhola (Corp. Development) and Tim Rucquoi-Berger (Supply & Operations).
“This is not a scooter” – Flash branding in stealth mode
Notably — and definitely quietly — Flash is already operating in Switzerland and Portugal, with plans to launch into France, Italy and Spain in spring 2019, and in the rest of Europe in summer 2019.
The existing launches have been soft-launches, to say the least, with Flash e-scooters not initially carrying the company’s branding, instead sporting the label “This is not a scooter,” part in-house word play, part a statement of intent. Not just another scooter company might be an even more apt label if Gadowski’s longer-term ambitions are realised.
Perhaps more of a product-market-fit trial than anything else, Flash has initially used off-the-shelf e-scooters at launch, whilst simultaneously developing its own hardware and technology. The startup is headquartered in Berlin, but Gadowski tells me the team was first posted in China, establishing a supply chain and other partnerships that he believes can help give Flash the edge.
I put to him a common belief amongst some VCs that the e-scooter space in Europe is heading for a bloodbath that will continue to see a huge amount of venture capital pumped into the space, and subsequently many losers and a lot of money lost.
Recent raises by European e-scooter startups include Wind Mobility ($22 million), VOI ($50 million and Tier (€25 million). Meanwhile, Taxify has also announced its entrance into e-scooter rentals, and Bird and Lime have received substantial investment from three of Europe’s top venture capital firms. Index and Accel have backed Bird, and Atomico has backed Lime.
Gadowski appears for the most part unfazed by the swelling of competition coffers, although he does concede that the current “land grab” is forcing Flash to move slightly faster than it might have done otherwise. In some ways, he would have preferred to continue a more staggered, cautious roll-out, describing the startup as “product-first and multi-vehicle,” and says its customers are not just users of the service but local residents more broadly and the authorities with which it needs to coordinate. “Mistakes can be a lot more serious than at Delivery Hero, safety is involved,” he cautions.
The size of recent funding rounds in the space has also surprised him. However, he doesn’t think this is a “Facebook scenario,” where there will only be a single winner. Several micro-mobility companies can happily co-exist, he says, and the early movers are helping to pave the way for others, including Flash.
I suggest that the e-scooter land grab at its current pace also has a high chance of provoking a backlash amongst consumers and/or authorities, perhaps after a more serious safety accident or other source of reputational damage. Gadowski concedes this is definitely a “short-term” risk, but says there is so much determination by governments and local authorities to solve congestion and the last-mile problem, he doesn’t believe it will be a long-term one.
Finally, I asked Gadowski if he is considering acquiring smaller e-scooter startups in Europe (or perhaps elsewhere), as part of a roll-up strategy that would help the company leapfrog competitors. He declined to rule out acquisitions entirely — Delivery Hero was very effective in this regard — but said it doesn’t make much sense right now as hype in the space has pushed valuations way up. A more likely scenario, he says, is investing in or acquiring startups that can help with other aspects of the business, such as in the supply chain.
Powered by WPeMatico
Lori Systems is launching a service with the Kenyan government for last-mile haulage from railroads
For Lori Systems chief executive and co-founder Josh Sandler, deals like the one between his company and the Kenyan government to solve last-mile solutions around the national railroad are about far more than just logistics.
Sandler, whose family battled apartheid in South Africa as social workers, township doctors and (more dangerously) as financiers for the Spear of the Nation (the armed wing of the African National Congress), looks at logistics as an economic cornerstone for building more stable and democratic societies in sub-Saharan Africa.
His parents had immigrated to the U.S. in 1990 when Sandler was still a young child to escape the violence that accompanied the negotiations to dissolve South Africa’s apartheid state. Sandler’s father had worked as a doctor in township hospitals, while his mother was a social worker who was setting up a support network for abused children.
“A lot of the family was getting arrested and the country was breaking up and people feared a civil war and my dad got a fellowship in America and moved to Florida,” Sandler says.
But South Africa remained the touchstone for Sandler’s family life and he would often return to visit those activist relatives who remained to help shepherd the country through its early years as a democracy. It was during one visit to the country — when Sandler was working in a refugee camp — that the need for better economic solutions to the region’s problems became clear.
In the aftermath of the economic collapse of Zimbabwe and the long-simmering civil war in the Congo in 2008, refugees from the region were flooding into South Africa — and it triggered a response in the country’s citizens. Xenophobic violence resulted in rioting, looting and the murder of immigrants at camps — and Sandler had gone to volunteer at the shelters that were caring for these refugees.
“I had been debating between investment banking and the peace corps and went with investment banking because there needs to be a macroeconomic solution for this,” Sandler said. “Finding the core challenges from a macro perspective and preventing this from occurring by establishing strong systems and an economy that can prevent… all of these crises.”
So Sandler studied development economics. His work focused on supply chains — specifically working with the Kenyan government to analyze what went into the dramatic cost increases that are attendant with the sale of every good and service in the country. “When you buy a mango on a farm, it’s half a penny and then in the supermarket it’s 80 cents,” said Sandler.
From Kenya, Sandler moved to study Nigeria and worked on problems with supply chain management in pharmaceuticals. “I did a lot of trips and treks back to the continent and what I kept seeing is challenges in the supply chain — part of it is middlemen and part of it is haulage.” Sandler said. “That’s a big issue that’s due to a lack of flexibility and coordination in the system.”
After seeing the elegance of the marketplace model that Uber had set up for ride-hailing and given the penetration of smart and feature phones in Africa, Sandler thought he could do something to create a marketplace for the trucking industry.
“Before, providers were managing individual trucking companies with a difficult marketplace and no transparency,” says Sandler. “By driving that through our system and having more pricing visibility we’re able to bring down the cost of bringing bulk grains to Uganda by 17.3 percent.”
Lori Systems first launched in Kenya and started working with a network of trucking companies. Around that time the company also came to the attention of TechCrunch.
Yes, Lori Systems has been on a TechCrunch stage before — as competitors (and eventual winners) of our inaugural TechCrunch Battlefield competition in Nairobi.
Since appearing on stage at our Nairobi event, Lori has grown quickly. The company counts 70 employees on staff — up from 20 — and now has 70 cargo operators responsible for a network of 2,500 trucks using its service.
The staffing changes at Lori include some big new executive hires, including Andrew Musoke, who has come on board as director of commercial products, and a former director of Maersk, Mehul Bhaat, who will be running operations in East Africa for Lori, Sandler says.
Lori has also expanded internationally — working with fleets in Kenya, Uganda, Rwanda and South Africa while also increasing the types of cargo that its fleet operators are transporting. “We went from just doing grain and fertilizer to now we do all freight bulk,” says Sandler.
Not everything about the TechCrunch experience was positive for Sandler and the company. After their victory, Lori, and Sandler, were subjected to criticism from some African press. “There were really bizarre implications with the underlying tone being white male privilege,” says Sandler. “It’s an important conversation to have around white male privilege… [but] it was coming out on a very personal level on a gossip column.”
The accusations aside, Sandler said the victory in the Startup Battlefield Africa competition validated the company with potential new hires.
As for the opportunity, Sandler says there’s $180 billion in hauling income across the African continent, and very little of it has been optimized with software. Ultimately, if Lori succeeds it will mean lower prices and increased spending power for consumers across Africa.
“If you’re earning a dollar a day and 40 percent or 60 percent is going to logistics that could be going somewhere else, that’s a problem,” Sandler said. It’s exactly the problem that Lori is setting out to solve.
Powered by WPeMatico