THE MOBILITY SECTOR DOES NOT NEED UBER and CO

Philip James Douglas has already launched several companies in the mobility sector and experienced failure with the bike sharing scheme Velobility. The Swiss mobility expert is passionate about bicycles and sustainable mobility projects. He seeks to encourage the bike industry to more systematic thinking and greater willingness to cooperate.

Interview with Philip James Douglas, CIP Group

Your website mentions: Sustainable mobility and a strong footprint in China. What does this mean?
Philip James Douglas :
CIP Mobility is just getting started. We’re developing our solutions for Europe and this is where we’re beginning. However, we also have scalable plans for China ready with partners waiting for the green light there. We’re applying the lessons from Europe, which is an attractive option in these times.

What exactly are you developing?
Philip James Douglas: We’re developing the first chainless, digital pedelec cargo bike designed for use as a utility vehicle. What makes it special is that it’s made of high-performance polyamide and with lean and scalable production. This is a completely new product approach for the bike industry.

Can a plastic bike be sustainable?
Philip James Douglas: Yes, if you do things properly. Using a closed loop system is the way to go. We have little material mixing and can recycle more. In addition, in the B2B fleet business, the production cycle is very different to the production cycle of bicycles for end consumers. With leasing concepts, it’s possible to draw up very efficient business models. And they have to be significantly more sustainable, than things are at present. 

It has to be done properly though. A plastic e-bike is not like a plastic bag that might end up in the sea.

If B2B is your concept, who is your target group? Logistics companies, such as DHL, for the last mile of the journey?
Philip James Douglas:
Logistics companies are our main target group. I also think that classic trade companies will be interested too. Where there is a company fleet, it can be very interesting from small macro businesses to major corporations.

Is this a comprehensive all-round no-worries package?
Philip James Douglas: Yes, this is an important part of the concept. A few years ago, the market did not even exist in this form. It requires completely new logistics and specialised players.

Apart from China, is there demand in other countries? Controlling all aspects of mobility seems to be a European phenomenon.
Philip James Douglas: As far as sharing is concerned, the United States is far more dynamic than Europe. Just look at Uber. Sustainability plays a role there too. However, there was a lot of venture capital involved. I sense that the issue is coming up outside Europe. The political pressure to act is growing. This segment is a kind of vacuum where people look for solutions, but none exist. The success stories first have to be written.

As far as sharing is concerned, the United States is far more dynamic than Europe.

How has corona affected you as a start-up?
Philip James Douglas: We coped well. I mean, we’re pretty decentralised as a company anyway. Business has continued and we’ve even expanded the team during this period. It was not always easy for me to travel from Switzerland to Germany. But we managed. We’ve not been affected much.

What’s the current market situation for your product? Are there obstacles that you need to overcome?
Philip James Douglas: We did have one issue, but then we solved it. We use a digital chainless drive system. Our bikes have no mechanical drive, instead they generate electricity as you pedal and transfer it to the rear motor. This is something completely new. And it functions very efficiently. Only there was just no certification for it. There was nothing like it in the legislative texts.

In the meantime, we’ve received classification from the Kraftfahrt-Bundesamt, (Federal Motor Vehicle Transport Authority) and are classed as a pedelec.

Could this also be an option for private vehicles?
Philip James Douglas: Digital chainless drive systems will also be an issue for B2C. Whether we introduce it, or someone else does, I can’t say at the moment. It won’t make a difference in the sport-orientated sector. But where digitalisation is relevant, digitalisation will come.

In the cargo sector, there is a TCO calculation (Total Cost of Ownership) and much higher load requirement. This means that there is more interest and openness towards this kind of innovation.

You say that urban mobility has had a significant influence on mountain biking. Why is this?
Philip James Douglas: I’m convinced that the urban sector will develop significantly due to the enthusiasm for bike sharing. This applies to digitalisation in both the urban and the cargo sectors. And naturally, this will have an impact on mountain biking. Development in the cities is leading the way. This used to be different. Perhaps the market will split into a utility market, which has a very holistic conception and a mountain bike market, which is more about lifestyle and fun. The latter does not think in a holistic manner.

Digital chainless drive systems will also be an issue for B2C.

You say that urban mobility has had a significant influence on mountain biking. Why is this?
Philip James Douglas: I’m convinced that the urban sector will develop significantly due to the enthusiasm for bike sharing. This applies to digitalisation in both the urban and the cargo sectors. And naturally, this will have an impact on mountain biking. Development in the cities is leading the way. This used to be different. Perhaps the market will split into a utility market, which has a very holistic conception and a mountain bike market, which is more about lifestyle and fun. The latter does not think in a holistic manner.

You were personally involved in bike sharing and suffered a hard time. How do you view the market today?
Philip James Douglas: I have always tried to build bridges between manufacturers and system suppliers and done a certain amount of pioneering along the way. Some of the challenges were just too big for a small company. This is why Velobility was formed, we wanted to do things differently, but we were just too far ahead of the times.

Uber showed with Jump just how huge the challenges are. Hardware is still completely underestimated when it comes to complexity.

And profitability?
Philip James Douglas: Absolutely, a lot of money was burnt. The fact that public mobility actually involves costs, is still not always fully understood. And the sharing bubble has already burst to a certain extent. We need long-term, sustainable partnerships with cities and hardware that is made for the purpose. At the moment, we are misusing components that were never built for this kind of use. 

The fact that public mobility actually involves costs, is still not always fully understood. And the sharing bubble has already burst to a certain extent.

Is the market not moving towards ownership? Also due to Corona? Is the sharing market drying up?
Philip James Douglas: I think both worlds can coexist. They don’t actually have to compete with each other. There will always be situations where people find themselves in a different city and don’t have their own bike. I believe that sharing will get more and more specialised. For example, I see cargo bike sharing as a very important issue. You might need your own bike for daily use, but might only need a cargo bike once a week to do the shopping. This is where sharing could come in. Specialisation will be crucial. And linking up the entire ecosystem. At some point, it will be more practical for me to use bike sharing, as I only have to pay for the service and not for factors such as maintenance or theft.

I find projects like the one currently in Paris very exciting. It’s a long-term leasing scheme, where urban commuters can hire an e-bike from the city council at very competitive rates. The innovative plan hopes to win people to e-bikes.

One and a half years ago, you were very positive about e-scooter sharing. Has your position changed?
Philip James Douglas: I firmly believe that it’s important to test things out thoroughly. This is not something you can do in the lab, you have to get out on the streets. From Velobility’s perspective, I always saw scooters as the main competition, because compared to bikes they are like very compact vehicles. The past has shown that this should not be underestimated and that a fast roll-out can rebound if it’s not done properly. Here too, there is a lack of integration, and a lack of cooperation with city councils. This is something that was never properly cultivated.

In my opinion, scooters do not work as a concept. They just replace walking.
Philip James Douglas: I agree. Scooters take pedestrians and put them on a vehicle. This is not something I want to see. The chance of converting car drivers to scooters is relatively small. Therefore, from a political point of view and a sustainability point of view, they are just not worth promoting. This could have been done better by informing users and talking to city councils much more intensively.

Disruptive practices don’t work when it comes to mobility. They might work with software, but as soon as hardware is involved, it becomes extremely difficult. And if cities themselves are involved, then it’s even more complicated. They are not able to change from one day to the next.

All the sharing concepts we see are aimed at large urban centres. Where are the concepts for more rural areas?
Philip James Douglas:
From a commercial point of view, cities are far more interesting, as they have a much denser user base. So, private companies always go for the cities. This is also a much more exciting prospect for investors. However, I think if you look properly and do the maths for how public transport is subsidised in rural areas, then it would be possible to achieve something with sustainable projects. But I wouldn’t believe anyone who says that this would make a fantastic business case. I do think though that it’s easier to subsidise an e-bike system than local transport.

In Switzerland, there are some really exciting projects, such as carvelo2go, which as far as I’m aware, is one of the biggest cargo bike sharing platforms in the world.

How does it work?
Philip James Douglas: It’s a project launched by the Mobility Academy in Switzerland. There are hosts who manage the cargo bikes. They could be a café or a bakery. They might use the cargo bike themselves, but also make it available to other users. Handovers are done in person. The system works really well. This kind of thing has to grow organically though. You need to be rooted in the local community. When local people see the benefits of such a scheme, then there are no vandalism problems. At least, not major ones. However, if private companies move in and exploit the public space, people tend to react defensively.

Low-maintenance technology is an issue here too. And systems that don’t allow centralised management are not so attractive for this kind of project. Small communities just would not be able to cope.

Is this not something that could be taken over by, for example, energy suppliers?
Philip James Douglas:
They lack the bike know-how. And this is where the problem lies. There are lots of companies who would like to support such a scheme, but the products don’t exist to make it possible. I see this as my mission – to build exactly these sorts of products. The bike industry does not have this kind of systematic way of thinking. It always views things in terms of yearly cycles and that’s OK. The automobile industry is not going to fill the gap either. What’s needed are new, specialised providers.

Does your approach mean that more space is required for bikes in inner cities? Is this a political issue?
Philip James Douglas: Yes, definitely. Bikes need more space in general and they should get it. Cargo bikes should be taken into account too. We need wider cycle paths, but also micro hubs, where inventory turnover can be managed on the streets. Cities can play a very important role here, if they provide the infrastructure. At the same time, they can oblige providers to use it. This further supports the transition.

The same is true of sharing. When a city council offers the infrastructure, then it maintains a certain element of control and can introduce certain conditions for companies using it.

If you had a magic wand, what problem would you solve in an instant?
Philip James Douglas: The lack of systematic thinking. At present, there is this gold-rush mentality. Everyone is out there trying their luck. But the challenges are just too big. It’s only going to function properly when players start to work together and think in a more long-term manner. Short-term, opportunistic approaches from the software sector that we see from Uber and Co. are not what the mobility sector needs.

So, what we might need is a closed loop system, which brings us back to where we started. Philip James Douglas, thank you very much for answering our questions.