Is Mena the next big market for micromobility?

Is Mena the next big market for micromobility?
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Transportation is often described as the lifeblood of an economy. For any major city, the ability to transport goods and people along a seamless infrastructure is vital for business, job creation and economic development, and increasingly, this needs to be done with climate change and sustainability in mind. 

According to a report from C40, every $1 invested in public transport could generate $5 in economic returns, while every $1 billion invested could create 50,000 jobs. Governments across the world have amped up their investment in public transport infrastructure as a way to reduce carbon emissions, but as the pandemic continues its havoc, demand for private modes of transport continues to rise

Several European cities  have responded by upgrading their infrastructure to accommodate more environmentally-friendly micromobility devices such as bicycles and e-scooters..

According to the European Cyclists Federation (ECF), over €1 billion ($1.2 million) has been spent on cycling infrastructure across Europe since the start of the Covid-19 outbreak. 

Pop-up cycling roadways have been built across many European cities; bolder budgets have been assigned towards creating safe and convenient cycling routes. For some cities, the Covid crisis only accelerated the implementation of such measures that had previously been in the works. 

In the Middle East and North Africa (Mena) however,  micromobility has long been an afterthought, where there is still a lack of safe, suitable infrastructure for bikes or any other forms of micromobility.   

“For the past decade, our roads have been designed solely for the use of cars. You can’t change that overnight,” says Mohamed Khalifa, CEO of Saudi Arabia-based e-scooter platform Dabeeb.

Much of the growth and momentum witnessed in the micromobility sector therefore, is primarily driven by the B2B segment, spurred by the rising demand for the Covid-19-triggered online ordering and delivery services. For UAE-based electric mobility and e-bike startup One Moto, the B2B segment accounts for 90 per cent of its operations, according to Adam Ridgeway, CEO and founder. 

"This is where the governments can benefit from implementing massive change. The profitability is increased by fleet operators [or] food delivery aggregators and so on. We reduced the cost by up to 74 per cent just with [electric] motorbikes,” he says. 

One Moto provides motorbikes to food delivery aggregators, logistics companies, supermarkets, etc. The company has recently expanded to India, as part of its growth strategy.

UAE-based e-scooter startup, Arnab, offers e-scooter subscription services to delivery and courier services providers. It also operates in some of the free zones inthe UAE as well as academic institutions. Founder and CEO of Arnab, Dheeraj Bhardwaj, argues that the B2B segment is as important as the B2C to micromobility businesses. 

"For any micromobility operator, it has to be that product mix of B2B and B2C. You cannot totally rely on one. You have to keep in mind that once you have the fleet of scooters, you want to maximise the usage of those assets," says Bhardwaj. “But right now, B2C is definitely doing better.”

More e-scooters in the UAE

The UAE micromobility scene, in terms of people movement, has been gathering momentum over the past year, with a slew of government-led initiatives put in place to promote sustainable mobility.

Earlier in April, the Executive Council of Dubai unveiled Dubai’s Bicycle-Friendly City Strategy 2025 to enable flexible means of transportation, with a total investment of Dh400 million.

After Dubai’s Road and Transport Authority (RTA) lifted its e-scooter ban, Dubai and the UAE more generally has become an attractive destination for global players to expand to and for local players to launch their own micromobility services. Last November, UAE-based Fenix launched after closing a $3.8 Seed round, and now it is operational in Abu Dhabi, Fujairah, Ras Al Khaimah, Sharjah, Ajman as well as in Manama and Doha.

US-headquartered Lime and Germany’s TIER, which recently raised $60 million from Goldman Sachs to fund its global expansion, launched their e-scooter fleets for the first time in Mena and the UAE back in October 2020. Both, alongside Arnab, Skrrt and Careem’s bikes, were selected to participate in a year-long e-scooter pilot programme, which is aimed at testing the efficiency, technology of e-scooters and ensuring that they meet international safety standards. 

“In the last few months, we really started to focus and put the Middle East as a priority by hiring and growing our team in Mena. We were humbled to have been chosen as one of the five operators selected to serve the city of Dubai, but Abu Dhabi was the first city that we launched in the UAE and the region in general says Ghassan Haddad, head of policy and communications, Europe, Middle East and Africa at Lime.

Similar pilot programmes have also been conducted across the world including in New York in April and in London, whose pilot was announced last month. 

"The RTA has already started talking to us to integrate micromobility as a mainstream mode of transport. We have already started developing our platform and providing the APIs to the authorities so that it can integrate into their system," says Bhardwaj.

Recreational activity versus viable mode of transport

While e-scooters, e-bikes, and bicycles are often perceived as a recreational mode of transport in Mena, UAE-based Arnab’s Bhardwaj argues that micromobility devices can qualify as a mainstream type of transport, claiming that half of its existing e-scooter fleet is used for transporting people to and from their workplace.

“There is a large number of our customers who take the scooters every day in the morning to commute to work. We make sure to locate the [scooters] near their workplaces so it can't be an issue for them when they are ready to leave for their homes in the evening,” says Bhardwaj.

In Dubai, there are five areas of the city that have dedicated lanes for cycling. Plans are currently underway to extend cycling lanes to the internal streets of the city, as part of the government's efforts to reduce CO2. 

Meanwhile, in Egypt, people riding an e-scooter or bike is still not commonplace. 

The sector boasts a few players, but the scope of operations remains very limited to the gated communities, which already have dedicated cycling lanes as well as the advanced security surveillance systems needed to prevent the theft of devices.

"Most of the studies being conducted on micromobility are testing the viability of the model as an entertainment type of mobility, not as a mode of transport, especially bikes," says Ahmed Kotaem, operations manager at consultation company MASARAT Misr. 

Among the platforms offering micromoblity in Cairo is the rabbit app, which is primarily located in three gated compounds across Cairo and Giza. However, according to its founders; Kamal ElSoueni and Mahmoud Mansoury, the app looks to encourage the adoption of e-scooters as a mobility solution, in an attempt to address the country's traffic woes.

“We were really excited about thinking of [a solution] that would alleviate the pressure of the transportation scene and solve the short-distance commute problems that we were facing on a daily basis,” says Mansoury.

The startup claims that 40-50 per cent of its revenues are coming from its operations in congested areas such as Downtown Cairo and Zamalek. 

“To our surprise, almost half of our riders are women,” says El Soueni.

For Koatem, micromobility does have the potential to help plug the existing gaps in the public transport system by enabling people to reach inaccessible and far-flung areas. “There is some progress witnessed in the scene, the governmental initiatives are there. Yet, nothing is happening at a massive scale."

“In order for that to happen, micromobility devices must be integrated with other types of public transport, so we can have a unified, multi-modal transit system. This is the ideal transport scenario that we are aiming for, but it is far unlikely to happen in Egypt any time soon,” he says. 

Tuktuks in Egypt are one of the popular micromobility modes of transport, and in some cases, they can be the primary mode for those living in crowded neighbourhoods, countryside villages and the city slums. 

However, most of them remain privately owned and unlicensed. This has prompted the government to impose restrictions on the import of tuktuks while limiting their use to the narrow alleyways. 

Egypt-based super app Halan was the first to realise how big the opportunity is in the micromobility market. The startup's growth story has however been punctuated by Covid-19 crisis and thesubsequent lockdown. Since then, Halan has framed itself as more of a fintech-driven super app, specialising in microfinance. 

In Saudi Arabia, micromobility can play a significant role in addressing the challenges of first/lastmile connectivity of accessing public transport, says Zaid Al Mufraih, co-founder of Saudi Arabia-based micromobility operator Gazal.

The country has already embarked on several public transit development projects, including the construction of the Riyadh railway.

"Let’s take Riyadh for example, the city will further expand now we have around eight million [in] population, we're targeting to double this number within the coming 10 years, that’s the plan of the municipality. Given all this future plan, we think that there would be pressure on the infrastructure,” says Al Mufraih. “Gazal's goal is to contribute to creating an integrated transport system.”


Besides the hot summer weather and near-absence of appropriate infrastructure, the lack of regulations and licensing also stands as a key hindrance to the evolution of the micromobility sector in Mena.

“The industry itself is immature,  and therefore, there is an absence of regulations in the scene - this is the main obstacle for us,” says AlMufraih, suggesting the establishment of a regulatory sandbox for micromobility, similar to what happened with the ride-hailing sector 10 years ago. 

Given the safety issues surrounding the use of micromobility devices, regulators have been slower to keep up with the momentum happening in the sector. 

"One of the biggest issues is the training and the licensing. So what we tried to do with RTA is to create a new automatic motorcycle licence for electric bikes, which will allow more people to become familiar with bikes outright, safely and effectively," says Ridgeway.

This also calls for constant collaboration between the government and private sector on providing the necessary training to riders and cyclists to avoid accidents in the future, he further suggests.

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