Commoditization of the Sidewalk the high cost of free public space Mauritz Börjeson Chief of Business Development Officer EasyPark Group
Distribution of public space
Roads
Parking spaces
Sidewalks
Bike lanes
Squares & plazas
46%
8%
25%
6%
11%
Bike parking 1%
Walkways 3%
Source: Mobilitets Redegørelse 2021, Copenhagen Kommun.
Observable phenomena on our sidewalks Urban development that can make cities more liveable
Sidewalks are unevenly congested
All kinds of phenomena are crowding the same places on the sidewalk
What is our role?
What is our role as policymakers and what should we do? Eltis, Sustainable Urban Mobility Planning & SUMP4Park
16
Understanding commercial micro mechanics Examining the unit economic considerations from an investor point of view
Unit Economics - Outlier.ai
”Contribution margin is a measure of your per unit profit, by subtracting the variable cost per unit from the sale price of the product or service. Or in other words,
”
”In principle, the rule is simple; Unit economics only considers variable costs, not fixed costs.” Source: https://outlier.ai/resources/best-practices/
The Scooter Case
Capacity calculation leads to 75% idle resources
City X
Theoretical spread
4 (four) actors with the same calculation
The scooter case; assumptions 4000 scooters
50 rides/month/scooter
€500 fixed cost/scooter
€1m investment
100k rides/month
€2* variable cost per ride (incl. maintenance, charging, support, marketing, banking) €4* avg trip price
*Source: Atommobility.com
Two alternative schemes Fixed Permit vs. Variable ”Idle Fee”
Entry barrier for smaller players with not enough cash. Allows less-than efficient biz models.
Fixed “buy-in” permit
(Rides x Avg. Trip Price)
Monthly Costs (Rides x Avg. Cost/Ride)
Monthly Income (Revenue - Cost)
Pay Back Time (Investment / M. Income)
Idle-scooter fee
+ €50 permit/scooter. Increase in Investment cost
+ fee for idle scooters Increase in Variable cost
€480K
€480K
€480K
€240k
€240k
€240k
€240k
4000 scooters Monthly Revenue
Open model encouraging optimization of inventory and sustainable biz model.
8m
9m of a fixed The introduction permit(€2,2m does not affect unit / €240k) economics. Weak or no deterrent topermit The introduction of a fixed inventory surplus. does not affect unit economics. Weak deterrent inventory Makes capitalto the surplus. competitive advantage.
€240k + idle fee (120k x €2) + ”idle fee”
€240k – “idle fee” +9m Effect on long term considerations wellfee”)) as (€2m / (€240kas -”idle short term revenue. Effect on longaligned term for fleet Incentives considerations size restraint.as well as short term revenue. Makes utilization the Good deterrent to inventory competitive advantage. surplus.
Bad
Good
Prohibition
Fixed cost per unit to operate
Variable cost
Variable cost with incentive
From one day to another everywhere
With a fixed starting date everywhere
Gradually introduced starting small for the price and geography
Gradually iterated together with forward guidance
● Stifles innovation. ● Ignores consumer demand and is out of step with citizens wants. ● Overinvest in the past. ● Makes cities less liveable.
● Acts as a barrier of entry. ● Best case pushes payback period backwards and worst case increases consumer price. ● Does not change decision making for the company.
● Is effective as it targets overcapacity and ‘wrong behavior’. ● Changes calculation for market participants as they can influence operational efficiency. ● Can be applied fairly.
● All the benefits of the previous box. ● In addition to dealing with negative behavior it can positively influence better behavior.
Insight
to
Foresight 27
What research says
28
Thank you
31