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Why demand for alternative transport growing in Ukraine?

Author : Anna Peshkova

Source : 112 Ukraine

There are more and more electric scooters and bicycles on Ukrainian streets - and not only because of the seasonality and good weather, but also because of the effects of the pandemic and restrictions on traditional modes of transportation. Alternative transport sales are on the rise. And for those who are not ready to lay out the average salary for maneuverability, cycling, which has been known to Ukrainians for several years, and kicksharing, which is still less than a year old, have become an alternative. In large cities of the country, there is a growing demand for "last mile" transport, which allows you to get from a metro station or other public transport to your final destination
14:16, 7 May 2021

Open source

Used gadgets and in-demand repairs

The growing demand for micro-mobility is a global trend. According to the New York Times, bicycle sales in the United States grew 65% between 2019 and 2020, with the pandemic-triggered restrictive measures being the key reason for this increase. Scooter sales in the EU rose 22.6% last year.

Related: Transport lockdown in Kyiv: City drowns in traffic jams, people line up at stops

In Ukraine, sales of alternative transport are growing even more significantly than in Europe. The owner of Veliki.ua, Oleksiy Kushka, says in a commentary to 112ua.tv that bicycles and electric scooters are being bought 2-2.5 times more often than before the pandemic began. The same assessment is given by "Epicenter" and the Association of Cyclists of Kyiv.

Kushka emphasizes that the demand for repairing electric vehicles, mainly scooters, has also grown by 1.5-2 times. In the online service ordering services Kabanchik.ua in the first two months of this spring, the demand for electric transport repairs increased by almost 67% compared to the same quarantine period last year.

As for the prices for a new alternative transport, the monitoring of 112.ua.tv showed that scooters in Ukraine have practically not risen in price since 2020, but bicycles have increased in price - some models immediately by 30%. This is a global trend that has been going on since the beginning of 2020. Parts suppliers are extending delivery times to July due to outages during the pandemic, shortages of steel, aluminum and rubber, and labor shortages. Affects the price and the shortage of empty containers for loading goods, space for ships, the growth of sea tariffs in March by 2.5 times.

Related: Who to pay transport tax in 2021?

In Europe, increased demand for bicycles has boosted sales of used vehicles. The same trend is observed on the Ukrainian site OLX. On average, in 2019, bikes were searched on the platform 5 times more often than in 2018, and in 2021 the number of requests doubled compared to the pre-quarantine period. During the last cycling season, the average bill has also grown by more than 20%.

However, the fastest growing is not the sale of alternative vehicles, but their rental. Or rather, scooter and bicycle sharing, which is carried out without rental offices.

Cost of sharing in Ukraine

“Not all Ukrainians have the opportunity to buy cars for 20-30 thousand dollars. People are looking for alternative options for moving around the city, including considering buying scooters for 400-500 dollars. which is very beneficial for our clients,” Oleksiy Kushka, who is also the development director of Ride Kiwi, emphasizes.

alternative transport
112 Agency

It is one of the largest scooter-sharing players represented in Kyiv, Odesa, Lviv, and Dnipro. Bolt scooters are presented in three cities, Georgian Scroll – only in the capital.

Most often, electric scooters are used for trips over short distances - up to 5 km. On weekends, trips are shorter. However, there are also enthusiasts: at Bolt, we were also told that one of the customers covered almost 27 km in a trip.

Sharing is cheaper than a standard rental. In "Citrus Rent", for example, you need to pay for an hour of renting a scooter – 13-18 USD, and at the same time, there is a rental point only in Obolon.

Related: Zelensky signs law on river transport

Bicycle sharing is cheaper than e-scooter rentals. This is due to the fact that after a day they do not need to be brought to the charging point. The monopolist of this type of service for bicycles is the public rental Bikenow.com.ua, which works in cooperation with the mayor's office of the capital. Regular city bike rental at rental points is 2 to 10 times more expensive. In addition, traditional rental requires a large deposit or documents.

Transport infrastructure experts point out that scooter sharing could be even more popular in Ukraine. However, for them to become a full-fledged alternative to taxis, the price must be much lower than it is now. And this can happen when there are more devices.

alternative transport
112 Agency

According to Bolt representatives, Kyiv needs from 5 to 7 thousand scooters to fully cover the city. Kushka says that "we have already reached this border."

Not the most profitable business

Kushka believes that the scooter rental business will pay off and be profitable in the medium term.

"A lot of electric scooter sharing services have entered the Ukrainian market this year, and will continue to come, because this area remains promising," he says.

However, founder of a scooter startup Danylo Tonkopiy is much more pessimistic: he believes that the business has been and remains unprofitable. Bolt representatives have also stated this.

When purchasing scooters, you must pay VAT and excise tax. You will need to rent a room where scooters will be charged daily, they will be repaired and washed, treated with an antiseptic. This means that you need to spend money on delivery, on staff work, on hiring a lawyer and a marketer.

And now, when you have already spent a lot, scooters are stolen, dismantled for the sake of the battery, which is used for vaping, handed over to pawnshops or simply damaged for fun.

Although most sharing companies have devices equipped with GPS-navigators, and some of them beep loudly when unauthorized movement is made, this still does not prevent theft and vandalism. Contracts with private security companies are rarely concluded, since it is difficult to work with such objects. And risk insurance is often financially impractical.

alternative transport
112 Agency

The data on how many scooters are stolen and how many are returned is a commercial secret. Bolt previously reported that the number of lost scooters is less than 1%. But, according to Kushka's estimates, the situation with the theft of scooters has not improved, if not worsened: the company loses about 3% a year. The Development Director of Ride Kiwi explains this by the difficult economic situation in the country.

BikeNow bicycles were also actively stolen in Troyeshchyna, after which the sharing left the region for a while in 2017. Then they were drowned in the waters of the Dnieper. Vandals recently damaged 15 bicycles of the service in just one night, causing nearly a thousand dollars in damage.

Related: Ukraine to receive €640 million from EIB to develop infrastructure, transport, - PM

But even in an ideal world without vandalism, about 12-15% of the park needs to be repaired every year. These are cuts in the tires and failure of the steering. The scooter will most likely need to be replaced at the end of the season.

At the same time, at least for self-sufficiency, the scooter must last two seasons. Quartz analyzed data from Scroll vehicles in Louisville and found that the scooter generates $ 2.32 in net profit per day. To recoup its initial cost, the gadget has to make five trips a day for 5-6 months.

At the same time, not every scooter in Ukraine is used 5 times a day. The companies do not share data on the use of scooters, but the downtime of some vehicles is obvious. While companies don't share this data, the analogy is with bicycles - BikeNow reported 3.5 rentals per day on average.

Unsurprisingly, the issue of bike-sharing ROI is tricky too. This business is facing increased operating costs and growing competition from kick-sharing companies.

alternative transport
112 Agency

Given the difficulties in the sharing market, it is highly unlikely that prices will decline, so companies are looking for other growth points. For example, cooperation with courier services, car-sharing services, and taxi aggregators. BikeNow, for example, advertises on the bodies of its bicycles. And some small companies only work with the delivery business, online stores, and pharmacies.

High-speed "pedestrians" and free vibration massage

There are several other important factors that still hinder the more active demand for alternative transport.

One of them - driving a scooter and other light electric vehicles is still not regulated by traffic rules. At the same time, in many European countries, the maximum speed of movement by electric transport (often 20-25 km), as well as the minimum age of the driver, has long been established. There are clear rules regarding lights, insurance, licenses, drunk driving and headphones.

The bill No. 3023, which should have put things in order in the sphere, was adopted only in the first reading in September last year. If approved, scooter drivers will be able to move along cycle paths, and if they are not available, along the edge of the carriageway or the side of the road. However, they can also be fined. In the meantime, electric scooters are most often equated in rights with pedestrians.

By the way, Bolt said that it was for this reason that the launch of the service in Ukraine had to be postponed. Kyiv Mayor Klitschko said that due to the unresolved issue, the city cannot allow the company to provide this type of service.

Related: Covid-19 in Ukraine: Up to 30% of new infection cases observed in public transport, - official

But if scooters are banned from moving on the sidewalk, in the absence of bicycle infrastructure, alternative mobility in Ukraine will generally be called into question. In Ukraine, alternative modes of transport are already being used not "thanks", but "in spite of". In the capital, for example, the length of bike paths is 7.5 times less than the required norm and 2.5 times less than the plan agreed by the local authorities for 2020. Only last year, the first bike crossing was equipped according to all standards. In most cities, apart from Lviv, the situation is much worse.

Certain steps have been taken: there are laws that require the creation of a cycle path or an additional lane for major repairs or construction of roads. However, this is not enough. In the world during the pandemic, businesses and governments met the citizens halfway and began to motivate them to use microtransportation. Paris and London, for example, have added hundreds of kilometers of temporary bike paths, and bicycle manufacturer Brompton has provided about 800 alternative transport units for medical professionals.

Lack of infrastructure is traumatizing for those using light modes of transport. In 2020, the police registered more than 2,100 collisions with cyclists, which led to the death of 210 people and injuries to more than 1,500 cyclists.

Today, those who wish to switch to a scooter and a bicycle have to wait, if not the growth of social responsibility from local authorities, then at least an understanding of the deferred benefits. After all, the regulated development of microtransportation contributes to comfortable tourism, and hence to the filling of budgets with taxes.

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