What is it? TIER is a micromobility provider offering electric scooters, bicycles and mopeds in over 150 cities in Europe and the Middle East (TIER, 2021c). The company aims to move mobility towards sustainable alternatives and became climate neutral in 2020. Their vehicles are designed to be durable and easily reparable.
Why is this important? Particularly in urban areas, alternatives are needed to the emission-intensive use of personal fossil fuel-powered cars. Mobility alternatives such as bicycles are a greener option that encourages lower emissions as well as better air quality, more public space and additional health benefits (European Environmental Agency, 2021). Micromobility alternatives such as bicycles and scooters can encourage a modal shift away from car use and are therefore crucial components of a more sustainable mobility system. In addition, sharing rather than owning a vehicle might lower demand to buy new while increasing the use of the existing item throughout its lifetime.
Main resource strategy: Narrowing the loop by enabling a higher use rate of vehicles by renting them out. Also narrowing the loop by reducing resource use as they encourage the modal shift away from personal car use to the use of electric bicycles, e-mopeds or e-scooters.
Other resource strategies: Slowing the loop through designing long-life vehicles and servicing and maintaining them for a long lifetime.
Business model aspects:
- Value Proposition: TIER offers a rental service for electric scooters, e-mopeds and e-bikes. Customers can use the app to find a vehicle, unlock it through the app and ride it (TIER, 2022a).
- Value Creation & Delivery: TIER design and maintain their own vehicles to ensure long use lives. They partner with local businesses for their TIER Energy Network where vehicle users can swap empty batteries for charged ones in exchange for a free ride (TIER, 2022c).
- Value Capture: TIER charges a rental fee to customers for using their vehicles. They have significantly expanded their network since launch and also offer a range of vehicles, adding electric mopeds and bicycles to the initial electric scooter.
Strategies for degrowth/ sufficiency (based on sufficiency strategies from Niessen & Bocken, 2021):
- Awareness-raising: Highlighting the impacts of car traffic and encouraging customers to switch to more sustainable alternatives, for instance through their 'Beat Traffic for Good' campaign (TIER, 2021b).
- Design & Green alternative: TIER rent out electric vehicles to encourage the move away from fossil-fuel powered private cars. They design their own vehicles and ensure that those are durable and long lasting, for instance through design for easy reparability.
- No ownership: TIER reduce the need for ownership of vehicles by offering rental access to electric scooters, bicycles and mopeds.
Business model experimentation practices: Though headquartered in Germany, TIER first launched its service in Vienna (Austria), then Switzerland, France and Belgium (Petzinger, 2021). This was due to German regulations that did not allow the renting and using of e-scooters. Following the launch in Vienna in September 2018, TIER rapidly expanded to further cities and countries, offering their services across 20 cities in 10 countries by May 2019 (TIER, 2019), across 100 cities in 12 countries in Europe and the Middle East by May 2021 (TIER, 2021a), and across 150 cities in 16 countries by October 2021 (TIER, 2021c). TIER has similarly expanded its offering and developed its vehicle offering, adding e-mopeds to their vehicle fleet in Berlin in May 2020 (TIER, 2020a). The servicing system has also been continuously innovated with a new e-scooter model launched in August 2020, which included user swappable batteries and was combined with a Europe-wide charging network hosted by local businesses (TIER, 2020b).
Tools, methods and approaches used: TIER has been working with ClimatePartner to measure, reduce and offset their greenhouse gas emissions (TIER, 2022b). Their emissions have been measured on the basis of the GHG Protocol’s Scope 3 framework (TIER, 2022b).
Sustainability outcomes: TIER estimate that from launch in 2018 to 2021, they have been able to replace over 13 million car rides (TIER, 2021c).
European Environmental Agency (2021). Rail and waterborne — best for low-carbon motorised transport. Briefing no. 01/2021. Accessed 31 March 2021 at: https://www.eea.europa.eu/publications/rail-and-waterborne-transport
Niessen, L., & Bocken, N. M. P. (2021). How can businesses drive sufficiency? The business for sufficiency framework. Sustainable Production and Consumption, 28, 1090-1103. doi:10.1016/j.spc.2021.07.030
Petzinger, J. (17.05.2021). ‘Better done than perfect’: Micro-mobility scale-up TIER opens up about its expansion journey. Tech EU. Accessed 9 February 2022 at: https://tech.eu/2021/05/17/tier-crossing-borders-expansion
TIER (03.05.2021) (a). TIER Reaches 100 City Milestone – Focus On International Expansion, Launch Of E-bikes And Roll-Out Of Its Energy Network. Accessed 9 February 2022 at: https://about.tier.app/tier-reaches-100-city-milestone/
TIER (13.09.2021) (b). TIER is giving away 1 million free rides on Car Free Day to Beat Traffic for Good. Accessed 8 February at: https://about.tier.app/tier-is-giving-away-1-million-free-rides-on-car-free-day-to-beat-traffic-for-good/#:~:text=Since%20the%20end%20of%20April,become%20independent%20of%20their%20cars.
TIER (25.10.2021) (c). TIER raises $200 million Series D funding round to fulfil its mission to Change Mobility For Good. Accessed 9 February 2022 at: https://about.tier.app/tier-raises-200-million-series-d/
About project Circular X
Project Circular X is about ‘Experimentation with Circular Service Business Models’. It is an ambitious research project funded by the European Research Council (ERC) which supports top researchers from anywhere in the world. Project CIRCULAR X runs from 2020-2025. The project is led by Principal Investigator (PI) Prof Dr Nancy Bocken, who is joined by a multidisciplinary team of researchers at Maastricht Sustainability Institute (MSI), Maastricht School of Business and Economics, Maastricht University. The project cooperates with businesses who want to innovate towards the circular economy.
Project Circular X addresses a new and urgent issue: experimentation with circular service business models (CSBMs). Examples of such new business models include companies shifting from selling products to selling services and introducing lifelong warrantees to extend product lifetimes. However, CSBMs are far from mainstream and research focused on experimentation is little understood. The research aims to conduct interdisciplinary research with 4 objectives:
- Advancing understanding of CSBMs; their emergence and impacts
- Advancing knowledge on CSBM experimentation
- Developing CSBM experimentation tools
- Designing and deploying CSBM experimentation labs
This project has received funding from the European Research Council (ERC) under the European Union’s Horizon 2020 research and innovation programme, grant agreement No. 850159.
Using this information
When you cite this publication, please use the following source:
Circular X. (2022) Case study: TIER - Sustainable micromobility through vehicle rental. Accessed from www.circularx.eu