The smart way to balance supply and demand in a micromobility
By: Danilo Cataneo
Tags: Shared Mobility, Micromobility, Transportation

The smart way to balance supply and demand in a micromobility

Running a micromobility fleet involves a few interesting challenges, but there’s one in particular that keeps fleet operators occupied: maintaining a constant supply of vehicles in the right places.

Conveniently located vehicles are a defining feature of your service’s user experience. Ideally a rider should always be able to open your app and find a vehicle nearby.

But unfortunately for operators, your vehicles won’t perfectly distribute themselves. Riders often pick up vehicles at busy locations and park them in low-demand areas. This makes them out of reach for most other riders, reducing their usage. If left unchecked over a period of time, your fleet as a whole can become unbalanced: too many vehicles in low-demand areas, and not enough in high-demand areas.

A heat map showing high-demand areas for e-bikes in Basel, Switzerland. (Source: ElectricFeel)

There are various solutions to this problem. While most involve new hardware, at ElectricFeel we’ve spent years collecting and analyzing urban mobility data from our partners’ fleets to come up with a software-driven strategy for them. By using data and incentives, fleet operators can boost revenue and retain more riders by improving their overall experience.

Let’s take a look at the standard options for managing supply and demand in shared e-vehicle fleets. Then we’ll move onto how you can incentivize riders to do it for you.

How to measure your fleet’s balance

Before we start delving into solutions, here’s a couple of key metrics to measure how well your fleet is meeting demand:

Session Conversion Rate: total number of rides / total number of sessions

total number of rides / total number of sessions Reachability: number of sessions where riders had a vehicle within X metres / total number of sessions

The ideal session conversion rate your service should aim for can vary a lot depending on the stage you’re at. For example if you just launched in a new city, a lot of people might be opening and closing your app just out of curiosity — and this still counts as a session.

One way to get an idea for the balance of your fleet is to compare the conversion rates of different times and areas. If you can spot big differences, it probably means that your fleet is distributed unevenly.

ElectricFeel provides data analysis and visualisation to give you a clear picture of your fleet’s balance.

In terms of reachability, a vehicle within 100m of a rider is great user experience. On the other hand, 500m is less ideal and tends to result in riders picking other transport options.

Option 1: Add more active vehicles

The most straightforward solution to any demand problem is to simply increase supply. Adding more vehicles to your fleet is likely to mean more will be available where and when they’re needed.

If you’re not sure about the optimal number of vehicles your fleet should have, ElectricFeel can help you define this with forecasting models.

However simply increasing the number of available vehicles in your fleet without optimising the distribution, may quickly turn into loss of capital and decrease of profitability.

Option 2: Relocate vehicles manually

Another solution is your team redistributing your fleet across the city. Also known as ‘rebalancing,’ the idea is simple: pick up vehicles in low-demand areas and move them to high-demand areas. This is often done with a van, or a trailer that can carry 5–20 bikes at once.

Manual relocation was first introduced to rebalance shared bicycle fleets with fixed parking stations, as both full and empty stations present problems for riders.

(Bicing’s Electric Service Vehicle in Barcelona (Source: wikimedia)

But since most service vehicles can only transport a very limited number of e-mopeds or e-bikes at a time, relying solely on this method to rebalance your fleet isn’t sustainable or cost-effective. The salary, capital, and operating cost of the vehicle translates to a high marginal cost of distribution, and the vehicles themselves cause more city traffic.

For these reasons, we recommend new micromobility services take a smarter approach to fleet rebalancing: create incentives for your riders to do it for you.

Option 3: set up drop-off incentives for riders

After launching a new fleet, it doesn’t take long to identify the parts of the city with the highest demand for vehicle rentals. With the right technology it’s possible to set up incentives for riders to drop off their vehicles in these areas. Here’s how it works:

Rider opens their app to rent a vehicle The in-app map shows an area near their destination where dropping off their vehicle will result in a cheaper ride Rider drops their vehicle in a high-demand to save money Over time the fleet rebalances itself

By creating incentives and discounting certain rides, fleet operators can end up generating more revenue from increasing rentals in high-demand areas — no additional vehicles or relocation vans needed. Defining high-demand areas as parking hubs is simple, even if your fleet uses a free-floating parking model.

Data shows that incentives have a huge impact on how often riders drop off vehicles in high-demand areas. (Source: ElectricFeel)

And once a fleet has been running in a city for a while and collected enough data, it’s even possible to create dynamic, automated incentives based on real-time estimated demand. This self-balancing system is ideal for riders, as they can find a vehicle where they need one more often.

If you want to set this up for your own fleet, ElectricFeel can provide the incentives tool, the data analysis, and recommendations for incentive zones. We can also train your team on balancing supply and demand based on our experience. Request a demo here.