Revel without a cause
In 2018, as most micromobility companies flocked to e-scooters, Revel went for mopeds. From a warehouse in Red Hook and a small office in Gowanus, Brooklyn, Revel began operating a fleet of 68 bright blue mopeds. It gradually expanded to DC, Austin, Miami, and San Francisco, growing that fleet to around 6,000 vehicles.
“To me, it just always made more sense,” Revel co-founder and CEO Frank Reig told me in 2019, when we met up for an interview at the Web Summit technology conference in Libson. “When you’re dealing with stuff in the public right of way, when you’re dealing with cities, when you’re dealing with regulators, it’s better to not be a disruptor. A moped isn’t a disruptor. They’ve been around a hundred years, there’s nothing new. They stay the hell off sidewalks. They ride and park in the street. They need to have a license plate. There’s a regulatory scheme around them already.”
Five years later, Revel is pulling the plug. The company announced last week that it would end moped service in San Francisco and New York City, its two active markets, on November 18. It will focus instead on other EV offerings—a small EV ride-hail service in New York, and building charging hubs in New York and the Bay Area. Decommissioned mopeds will go to local recycling facilities, and Revel is laying off 60-odd employees. Per TechCrunch, Reig blamed the mopeds shutdown on weak demand, telling staff in a memo, “the service has been strained and ridership isn’t what it used to be.” A company spokesperson told TechCrunch ridership slid 30% this summer from the previous year in both New York and SF.
Revel’s moped exit is the latest entry in a turbulent year for micromobility. Companies that made their names on rapid expansion and profligate spending are under pressure to show they can operate sustainably as capital has become harder to come by in a high-interest rate environment. According to VC database PitchBook, micromobility startups have raised just $772 million across 70 deals so far this year, compared to $2.1 billion over 144 deals in 2022, and a whopping $7.2 billion over 130 deals at their peak in 2018.
The most prominent example of this mode shift is Bird, which went from the fastest startup to a $1 billion valuation (2018), to an ill-fated SPAC (2021), to harassing customers for unpaid pennies (2022), to a takeover and delisting from the New York Stock Exchange (2023). Since it was acquired by its Canadian counterpart in January, Bird has overhauled everything from leadership to on-the-ground ops. (For more on that, see my recent interview 🔒 with Bird CEO Michael Washinushi.) Meanwhile, European scooter operator Tier Mobility has reportedly been up for sale since the spring and sold off U.S. subsidiary Spin to Bird in September. Ride-hail firm Lyft set alarms ringing over the summer when the Wall Street Journal reported it might sell its bike-share division, which includes many of the largest U.S. systems.
Unlike many of its e-scooter rivals, Revel didn’t rocket to unicorn status. Since launching in 2018, the company has raised $220 million in financing, most recently $50 million in debt from BlackRock in November 2022 to build EV charging hubs. It was last valued at $326 million after a Series B funding round in February 2022.
Despite efforts to create a safe riding environment, Revel struggled with safety concerns. It temporarily suspended service in New York City in July 2020 after two traffic fatalities. Revel relaunched that August with stricter rules, including immediate suspension for driving the wrong way on a one-way street and real-time photographic evidence of wearing a helmet. Revel already capped speeds at 30mph (48kmh), the maximum vehicle speed before a driver is required to have a motorcycle license in New York State. It also offered free driving lessons from trained instructors, many of which Reig taught himself in the early days. A June 2020 report the company commissioned suggested Revel do even more to prepare riders, as 17% of incidents occurred with first-timers, and 30% with customers who had taken five or fewer rides.
By 2021, Revel was dabbling in other things. It experimented with leasing e-bikes and opened an EV charging hub in Brooklyn. Meanwhile, there were signs the moped business was flagging. Revel left Austin, Texas, in late 2020, blaming covid and the city’s entrenched car culture. In 2022, it paused service in the Bronx over theft concerns, then exited D.C. and Miami. That same year, Lime wound down an electric moped service it had trialed in New York for a year. Revel’s vehicles were also getting old. In a May 2022 interview, Reig told TechCrunch the company was “starting to think about the next moped technology we want to use—how do we want to think about reinvesting in our markets, in our fleets?” Quite possibly the cost of refurbishing that fleet, combined with weak ridership, prompted the decision to shutter the service now.
While it’s easy to roll your eyes at a micromobility service ditching its moped business for more cars, and while I’m usually first to the eyerolling, this seems like it might be a smart move. First, Reig has been focused for a while on the bigger picture of electrifying urban infrastructure. “There’s no infrastructure because there’s no EVs, and there’s no EVs because there’s no infrastructure,” he said in a 2022 interview. His preference to “not be a disruptor” when dealing with cities is also paying dividends. Last year, Revel won a $7 million grant from New York State to lead development of a site in Red Hook, Brooklyn, for EV charging and community training in clean-tech jobs. Revel is also busy building other EV “superhubs” throughout New York City, and even garnered praise for from deputy mayor for operations Meera Joshi. (For those not familiar with NYC politics, Joshi ran the Taxi and Limousine Commission during the Uber heyday and knows a thing or two about dealing with startups.)
Second, as I often say in Oversharing, micromobility is a tough business. The ops are hard, the logistics are hard, and the economics are really hard, especially without VC subsidies to prop them up. It’s not a coincidence that all modes of micromobility, but in particular e-bikes and e-scooters, have gotten significantly more expensive as their operators have been forced to make the numbers add up. A recent report from Nacto, an association of U.S. city transportation officials, calculated the typical cost of a 30-minute e-scooter ride these days at $11.70, far more than a comparable ride on public transit. The prices private companies need to charge to make a profit on these services may ultimately not be compatible with the rates that make e-bikes and e-scooters a practical urban transport alternative.
Third and finally, mopeds, moreso than bikes and e-scooters, aren’t for everyone. That’s something Reig has always known, and even viewed as an advantage for attracting the right type of rider. “With a vehicle like a moped, there’s a certain barrier to entry just because of the vehicle type that it is,” he told me in 2019. “We’re just ok with that. If people look at our vehicles and people say ‘I would never use that,’ that’s ok. It’s almost a good thing.” Almost, until there aren’t enough riders to keep it going.
Super interesting, especially as you say the political bind it puts them in
There's one other factor which contributed to Revel's moped ridership decline in NYC and thus their demise, that none of the post mortem analyses have touched on: NYC's regulatory choices.
Pre-pandemic, Revel was confined to less dense areas of Brooklyn and Queens, Manhattan was a big political no go, because... Community Boards hate things that take away "their" parking and NYC DOT barely has backbone to fight CBs on demonstrably positive projects, much less debatable, flashy start ups.
Access to Manhattan came to Revel by way of the unique mobility politics of front line worker support in mid 2020. Ever since then, the city has further cut and cut and cut away at where Revels can be parked, making the utility less and less and continuously shrinking the target audience. The current map of acceptable parking zones looks like a couple slices of Swiss cheese on Manhattan, conspicuously missing most of the places people want and need to regularly travel to. It's a UX nightmare.
So, I'd go so far as to say NYC killed shared Mopeds, just like they killed point to point car sharing, and dockless bikesharing before it. Especially insofar as they supported Citibike expanding ebike availability and it's network growth in outer boroughs (finally!) and both righted the screws over and over again on Revels service are and deliberately didn't tackle other challenges, like figuring out how to enable and enforce safe crossing of East River bridges on (e)mopeds, a huge problem for saferg and sustainability that will continue unabated after the last Revel Niu finds its way to the scrap heap.
Of course Revel will not say any of this publicly, because their remaining business lines require the conitued support and cooperation of the City. But it's a shame to have one less mobility option available, especially a form factor where ownership will never be as feasible or attractive as bikes and scooters.