Today we shared the difficult news with Spin employees that we are beginning to exit nearly all open permit markets globally to accelerate our path to profitability. This decision to restructure impacts roughly a quarter of our staff. We are offering affected employees severance packages and an additional stipend that may be allocated for outplacement services and employees issued company laptops may keep them.
Nothing is changing about our mission of creating a world of 15-minute cities or the Five Pillars of our plan for getting there. What is changing is that Spin will no longer compete in open permit markets that lack sensible regulations. As a result, we are beginning to wind down operations in a few U.S. markets, all of our markets in Germany and Portugal. We are also projecting closure of Spain as early as February 2022. These places have permit market dynamics that make it difficult to identify a clear path to profitability. We found that these free-for-all markets create an uncertain operating environment—marked by frequent changes in competitive landscape, no caps on fleet sizes, and race to the bottom pricing. Most importantly, we aren’t able to offer the type of reliable high quality service we pride ourselves on to our riders and city partners.
To turn the tide, we are simplifying our business by focusing on operational excellence in limited vendor markets in the United States, Canada, and the United Kingdom. After this restructure, 100% of our focus will be on markets where cities or campus officials select partners through a competitive procurement process. We see double the revenue per vehicle in limited vendor markets compared to open permit markets and are able to offer a better quality service to riders and cities. It’s no coincidence that our market portfolio has moved from 35% limited vendor to more than 75% limited vendor in the last two years. The markets where we’ll continue to operate were collectively EBITDA positive over the past 12 months.
In 2022, Spin will continue to build on our Five Pillars to drive profitable growth:
- Continue to be the #1 choice of cities and campuses. Since day 1, our partnership promise has guided our approach to working with cities and campuses. This approach has led to strong results with Spin winning 84% of new competitive permits in the U.S. and a 95% retention rate. In 2021, we focused on innovating in the service of cities by becoming the first company to roll out sidewalk detection making micromobility safer for pedestrians. We also worked with the city of Pittsburgh to bring a first of its kind mobility as a service (MaaS) program to the U.S.
- Give markets the operational tools they need to succeed. Our top product priority this year is investing in best-in-class operational tools like automated scheduling, task management, and inventory management to make operations more efficient. These tools and improved processes are key to making shared micromobility profitable.
- Get more people in the bike lane. In 2021, Spin launched our first e-bike and became the first company to launch a 3-wheeled scooter with remote operations capabilities. In 2022, we will launch a class 2 e-bike to give riders the option to pedal or use a throttle to get from A to B. This provides cities with vehicles that get more people into the bike lane.
- Create an affordable and reliable service that keeps people coming back. In 2021, we launched three Universal Basic Mobility (UBM) pilots in cities like Pittsburgh alongside local nonprofits, and researchers at Carnegie Mellon and UC Davis. We hope to understand the economic mobility and health impact on participants from historically lower-income communities.
- Build a company that reflects the diverse communities we serve. We plan to continue our commitment to being one of the only shared micromobility companies in the U.S. that runs operations with in-house, W2 employees rather than outsourced contractors.
Our goal with this restructuring is to double down on Spin’s #1 strength of being a great partner to the communities we serve. By gaining the regulatory certainty that cities provide us via limited vendor permits, Spin will be able to continue investing in the infrastructure, technological, and operational innovations needed to make high quality shared micromobility services a permanent part of the transportation ecosystem.