This is article #1 in a seven-part series on how transport can be privatized in the U.S. The series is meant to debunk a common truism among urbanists and policy-makers: that transportation can’t be profitable. Such people instead believe that the entire concept—from laying right-of-way (ROW), to building infrastructure, to deciding who uses it, to running mass transit—is a government responsibility.

But plenty of examples show the private sector can do all that, and that it would happen far more if governments reduced their role in the industry.

The first step towards this vision, as I’ve explained in other Catalyst articles, is having a market-based system for ROW, so more modes and companies can use the space. The second step, which I describe in this series, is to actually legalize these private companies. Many of them are chomping at the bit to provide services, but can’t because governments ban them or prevent them from scaling. I will analyze some of these companies and how they can be accommodated, starting from the bottom (micro-transport) on up.

I define micro transport as small transport modes, some of them non-motorized, that get people around in tight urban spaces. The best-known options include bicycles, scooters and mopeds. Less-common (but still popular) options are skateboards, roller blades and segways.

Micro-transport is particularly useful in dense cities: it consumes less space (causing less congestion); is better for the environment; and is safer than automobiles. Encouraging micro-transport should be an obvious policy goal, but too often is opposed, as I show in 3 examples below.

Bike sharing

Bikeshare has been popular in the U.S. for about 15 years. Early programs—such as Capital Bikeshare in D.C.—are public entities that often contract with private firms. They are “docked” services that have designated stations where bikes must be locked. This makes the model expensive for providers, inconvenient for users, and thus not really scalable. New York’s Citi Bike, for example, is the largest docked program in the U.S., and a public-private monopoly with no competition. But it still only has 739 stations and about 10,000 bikes, meaning it never truly scaled citywide.

In 2017, the company Spin began providing dockless bikes in some U.S. cities, which quickly disrupted things. Because Spin bikes could be located by app, they didn’t need to be docked and it didn’t matter where they were dropped. This made the service more convenient and popular, leading to the growth of rival services like Lime and VeoRide, and a numerical explosion in cities. Within a few months, Dallas had 20,000 dockless bikes in circulation and Seattle had 10,000, showing how much more quickly private companies scale. The introduction of e-bikes into some fleets, which negated the strain of having to pedal, accelerated the popularity.

But the public blowback was just as quick. The lack of docking meant that bikes were often “littered” along sidewalks, in parks, and even on roadways. So, cities soon capped the number of allowable dockless bikes, and other cities, having seen the problems of early adopters, never legalized them.

That does not mean the industry is doomed. Bikeshare ridership is still increasing in the U.S., and China—by far the world’s bikeshare capital—is proof of how these services can become mainstream. As I note in the case study below, a mix of ROW accommodation, market liberalization, and sensible regulation caused an absolute bikeshare explosion.

Scooter sharing

E-scooters are different equipment: a flat board and handle bar that is propelled by 2 wheels and a motor, and that someone operates while standing. But scooter-share has the same basic model as dockless bikeshare, is provided by the same companies, and draws the same complaints about litter.

The industry is not as big as bikeshare and likely never will be, because scooters are less familiar to the public and harder to ride. But the global scooter-share market is expected to rise from $100 million in 2018 to $553 million by 2025. The service is available in 200 U.S. cities, but its fastest rise is happening in Asia, namely India, which has a 20,000-scooter fleet.

Mopeds, motorbikes and motorcycles

Another option is moped-share. Patrons use an app to find a moped, ride to their destination, and park it for the next user to find. The market for this is smaller—86,000 shared mopeds across 88 cities globally—and there are only a handful of services in the U.S. But the use of mopeds, motorbikes and motorcycles beyond a shared network, as a matter of private ownership, is vast. One transportation journal estimates global ownership at 200 million, and in Asian cities like Ho Chi Minh City, they are a dominant street presence.

One advantage mopeds have over bikes and scooters is that they are already more interwoven into urban ROW, since they can be ridden and parked on roads. The moped-share company Scoot even has an agreement with San Francisco where it pre-pays the city for metered parking.

One disadvantage mopeds have compared to the other two is that they go faster, and thus may be more dangerous. Revel has already been temporarily shut down by New York City due to some high-profile accidents, and upon restoring service, must follow draconian safety protocols that could prevent it from thriving.

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The common issue governments and some residents have against these services, then, is two-fold, both pertaining to ROW.

First is storage—cities have not allocated places where dockless equipment can be dropped. I, for one, think this problem is overblown: the “litter” they cause in the public realm pales compared to the noise, pollution and disruption from automobiles. But if cities want to solve the problem, they could designate curb space for storage. In their operating agreements with micro-transport companies, the companies could lease the curbside they need in the locations they wish to serve, and install docking infrastructure as they see fit.

The second issue with micro-transport is safety—bikes, scooters and mopeds can all be dangerous to ride. But I find this argument even more flawed. None of these modes are more dangerous than automobiles, which have an average weight of 4,000lbs, accelerate faster, provide worse visibility, and cause around 35,000 deaths annually. Even in a lot of micro-transport accidents, automobiles are the main cause.

Here is another way to think about this: automobiles amount to a public safety externality—they are large machines that allow the driver to endanger others. Micro-transport, by contrast, is an “internality”—these machines put the people using them at risk, but because they’re so much smaller than automobiles, are far less dangerous to non-users.

For this reason, I don’t think 3rd-party regulators should determine that micro-transport services are too dangerous for someone to use (like when New York City mayor Bill de Blasio shut down Revel), any more than they should ban skydiving for the same reason.

If, however, officials want to make micro-transport safer, they can designate space in the ROW for separated micro-transport lanes (another potential use of curb space).

But the bottom line is that micro-transport is already a global phenomenon, drawing people who use shared services or their own equipment. Foreign cities have accepted the safety risks of micro-transport as a tradeoff for having greener, better mobility, and in many cases mitigate those risks through better road design. The market has done the rest in scaling the services up. The same should happen in the U.S.

Micro-transport case study: China

To grasp just how miniscule the micro-transport presence is in U.S. cities, look at the 800-pound gorilla that is China. As urban mobility analyst Oliver O’Brien notes:

“Bike-Sharing World Map currently estimates there are 9.1 million bikeshare bikes in the world, of which at least 8.6 million (over 94%) are in China—and most of these are dockless.”

Beijing is an example of this massive capacity on a local level. While U.S. cities have bikeshare caps in the low 4-figures, the Chinese capital had 2.35 million dockless bikes at its peak in 2017. This quickly caused a glut and well-publicized bike pileups. So the government set quotas and established sensible regulations about where and how the bikes can be parked. Companies, which early on numbered in the dozens, consolidated and reduced their inventories. By 2018, the figure had shrunk to 1.9 million, and by 2020 dropped to 900k—still far higher than any U.S. city. Chinese cities are also packed with scooters, motorcycles, and other micro-transport.

That said, there is little about Chinese cities that makes them more conducive to micro-transport than U.S. ones. Chinese leaders just allowed the industry to scale, and adjusted only after problems arose from this, rather than preemptively banning it. McKinsey & Company reports that the industry’s upside is actually much greater in the U.S., because incomes and prices are higher here. By 2030, the estimated size of the micro-transport market will be $30-50 billion in China, $100-150 billion in Europe, and $200-300 billion in the U.S. But local governments here must become more permissive for those figures to materialize.