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The observation of the week explores Upway’s US launch with Maxime Renson. This week’s featured vehicles are two cargo bikes, a commuter, a hybrid road ebike, and an ultra-lightweight folding ebike.

Observation of the Week

Exploring Upway’s US launch with Maxime Renson

Founded in 2021, Upway is a French startup building a platform to buy, refurbish, and sell second-life ebikes. Over the past year, Upway has refurbished more than 10K bikes across their operations in France, Germany, Belgium, and the Netherlands. On the back of this success, the startup announced just yesterday morning that they are expanding their presence to the US. On this week’s Flywheel, I had the privilege of chatting with Maxime Renson, the US General Manager at Upway, about their US launch:

“Why did you decide on the US as your next launch market?”

“Our research suggests that the micromobility market in the US will be 3X that of the EU by 2030. But even right now, the market is already massive. There were ~1.5M-1.7M ebikes sold in the US in 2022 at a rough retail price of ~$2K. That’s not a small market.
The same trends that happened in the EU 4-5 years ago are now starting to happen in the US. Cities are slowly shifting infrastructure away from cars (i.e. slow streets, more bike lanes), particularly in urban city centers like NYC. They’re also starting to help subsidize owned micromobility, like Denver and their tax rebates. It’s the beginning of the ebike wave in the US, and we want to be here from the start.
There also aren’t really any other countries in the EU apart from the one’s we’re already live in (France, Germany, Netherlands, and Belgium) that are as compelling as the US. For example, the UK only had 250K-ish bikes sold last year. There’s a few other markets in places like Asia, but the US market is a bit more plug and play with our existing playbook.
There’s a few key differences between the US and the EU. The US market is still a bit more suburban and recreational vs. urban and utility focused, but this is similar to how it was in the EU ~5 years ago. We expect this focus to shift towards urban pretty quickly, likely led by folding and cargo offerings. The US market also still needs a bit more education on what a good ebike and its value is, which is why the price points here are a bit lower than EU. We feel like this is our job and responsibility in partnership with brands and bike shops.”

“What are the main benefits of buying a used ebike from Upway?”

“It really boils down to three key benefits:
Access: We make high-quality bikes more affordable. Knowing there’s an established second hand market when buying a new ebike also gives people reassurance that there’s value to their purchase even after they’re done using it, which makes it easier for them to stomach buying an expensive good like an ebike.
Trust: The Upway platform is much more trustworthy than peer-to-peer marketplaces since we inspect/certify vehicles and offer both a 1 year warranty and a 14-day return policy.
Safety: All ebikes we sell are UL certified. UL certified bikes are still very expensive, particularly for power users like gig workers. When you look at cities like NYC where we’re seeing lots of battery failures, a huge reason why is because you have such heavy usage on non-certified bikes because the riders couldn’t easily afford UL certified vehicles.”

“What’s the process for a seller to sell or trade-in their ebike to Upway?”

“The first option is to submit your ebike on our website. You can fill out a simple form, and we’ll give you a quote within 24hrs. If you accept the quote, we’ll pick it up for free. We’ll then inspect the vehicle at our warehouse and pay you your price.
The second option is to trade it in at a bike shop. We have a number of partner bike shops that have been onboarded onto the Upway trade-in tool. If you trade your bike in at a bike shop, you can get an instant quote and payment
We typically have to adjust the payout from the original quote in ~5% of cases, usually because some of the damage wasn’t properly documented.
A key point to note here is that we don’t accept all ebikes. This helps us minimize our refurbishment costs and ensures that new buyers are getting the highest quality vehicles.”

“Where does your supply of ebikes typically come from?”

“We have 5 different sources for our supply:
Online website submissions: These are vehicles sold to us directly by consumers.
Bike shop trade-ins: Our current US trade-in network consists of 20-30 bike shops.
Overstock: We buy overstock vehicles from bike shops or other retailers. These are typically older model years (1-2 yrs old) that need to be moved in order for retailers to sell a new season of ebikes.
Craigslist or FB Marketplace: We buy some models that we like from peer-to-peer marketplaces like Craigslist, but this is something we likely won’t do once we’ve seeded the US market.
Returns: One thing we’ve started doing in the EU and will eventually do in the US is to handle the returns for brands directly. So if a customer wants to return a Cannondale ebike, they’ll ship it directly to us instead of Cannondale and we’ll handle the payment to the brand. Given that these returns are usually just for minor and not function-inhibiting reasons (i.e. wrong size, cosmetic damage), they’re great low-mileage candidates for us.”

“How do you evaluate a bike that is sent in to you?”

“To assess the quote and price, we primarily look at the brand, model year, mileage, and general state (i.e. mechanical and cosmetic) of the bike.
To evaluate what we need to refurbish and determine the resale price, we have a 20pt inspection looking at everything from the battery health to motor wear-and-tear. We have a 1 year warranty on the battery, motor, and frame, so we repair a vehicle until we’re comfortable putting that 1 year warranty on it.”

“You mentioned that you don’t buy all ebikes. What’s your criteria for vehicles you will accept?”

“Bikes with powertrains from Bosch, Shimano, Yamaha, or Bafang are virtually guaranteed to be accepted, but we will occasionally evaluate bikes with other powertrains as well. We also buy a few of the more popular D2C brands like VanMoof, Super73, and Rad Power. Our mechanics are certified by Bosch, Shimano, Yamaha, and Bafang, and they have quite a bit of experience with the mentioned D2C brands. All bikes we accept also have to be UL certified (or have some other equivalent validation), and we usually don’t take bikes that are older than 2016. From a battery perspective, we estimate that meaningful damage in the battery health starts to happen around 400 charge cycles, so we look for ebikes that have been charged much fewer than 400 times.
We typically don’t accept most budget ebikes. Not only are they not UL certified, they are also usually vehicles that are treated the worst, have higher mileages, and are often being resold because users were not happy with the vehicle. It’s just extremely hard to put a 1yr warranty on them or replace their parts when they can only be sold for a few hundred dollars.”

“What are the biggest differences between refurbishing bikes from dealer brands vs D2C brands?”

“Refurbishing D2C bikes is generally more difficult. While dealer bikes mostly just have mechanical issues, D2C bikes are a bit more complicated. Their batteries are harder to access, and they’re often more techy so their problems tend to be electronics related. Because of this, they usually require more experienced mechanics and take more time to refurbish. However, they’re usually treated very well so it minimizes concerns around frame damage, etc.
Although refurbishing D2C bikes takes a bit longer and is a bit more expensive, the demand for them is just so high that we are happy to repair them and offer them to our customers. Particularly VanMoof, they’re very popular on the coasts.”

“What does your relationship with bike shops look like?”

“People often assume that we’re in competition with bike shops, but we’re really pretty complementary to them. Bike shops are very busy so they don’t always have time to try new things, but they’ve been very receptive to the Upway trade-in program for three reasons:
Free up space: We buy their overstock, which allows them to move inventory and bring in the latest season of models from their partner brands.
Free up cash: By buying up their overstock, we return inventory capital to them so that they have the money to buy new vehicles from their partner brands.
Increase transaction frequency and conversion: We help incentivize people to buy new ebikes since we offer an easy way for them to trade-in their old ebikes. Knowing that there’s an established second life market also reassures customers that they can eventually make some money back on the new vehicle they’re considering. This ultimately increases the frequency of new transactions, which is huge in a market where this frequency has traditionally been quite low.”

“How do you partner with brands and OEMs?”

“OEMs obviously help us with refurbishment know-how and replacement parts, but we are also starting to play an increasingly important role for them. Not only are we beginning to handle returns for brands, we are also starting to buy vehicles from them that have small quality issues that prevent them from being sold new. For example, a brand new ebike that got a small scratch on it can’t really be sold as a new vehicle at full MSRP, but it’s a perfect vehicle for Upway. We’ll also probably start to handle brands’ second life efforts more directly in the future.
One interesting thing that’s started happening is that the brands are pushing our trade-in tool with their bike shops. Brands are incentivized to push new seasons of ebikes, but bike shops can’t receive new models if they still have old models taking up space, inventory capital, etc. Upway moves that old inventory and makes room for new.”

“How do you think about residual value and pricing?”

“Our initial models are based on brand, model year, mileage, and general state. This works when we first launch a market. But after a year or so of data, we need to start incorporating sell-through/liquidity and state of inventory into our models.
Our biggest risk, which honestly matters more than mileage, is buying bikes that don’t sell. Bikes that sell quicker are more valuable to us.
Additionally, the stock we currently have also determines how much we’re willing to pay for another new bike. For example, if we already have 10 VanMoofs, we’re going to want to pay less for an 11th VanMoof because it doesn’t add that much value to our inventory.
If we’re not buying the right bikes, if they’re not selling fast enough, or if we’re buying too many of the same model, that’s not good. So for us, what’s important is to prevent inventory devaluation, meaning that our value modeling and “residual values” are determined more at the inventory level than the individual vehicle level.”

“How do you handle maintenance and warranty claims fulfillment after selling a vehicle?”

“We currently have a warehouse in Brooklyn, so if you live in the area you can bring it directly to our facility. We do plan on opening 10 more warehouses across the US in the coming years.
Alternatively, you can also have a local bike shop or one of our trade-in partner bike shops service your ebike for you. You can then send us the invoice and we’ll reimburse you.
If neither of those options work, you can ship it to one of our warehouses and we’ll fix the bike and return it to you. If the servicing is covered under the warranty, we’ll handle the shipping for free.”

Upway just launched in the US yesterday morning, and is shipping bikes anywhere in the country. Check them out at upway.co.

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Top 5 Vehicles of the Week

1. Yuba Boda Boda | $2,200 | SF - Bay Area

**MSRP: $3,800 | Flywheel Price Comparison: $215 more than avg resale price | Flywheel Vehicle Value: $1,900**

Inspired by the boda boda motorcycle taxis of East Africa, the Yuba Boda Boda is a class-1 cargo bike. Yuba has become a popular choice for cargo bikes due to their reputation of building highly reliable and easy to maintain cargo bikes. The Boda Boda’s powertrain features a 50Nm e6000 Shimano Steps mid-drive motor and a 418Wh battery pack. This model is designed to be an extremely compact and maneuverable vehicle. The stiff frame and low step-through height make it easy for even smaller riders to handle the vehicle, and features such as automatic downshifting at lower speeds and a walk mode (providing motor power when the vehicle is pushed by a walking rider) make the Boda Boda a well-thought out hauler that’s optimized for maximum cargo utility. This listing has low mileage (Flywheel estimated mileage of <200mi) and is fully kitted out with a front cargo rack and child seating on the integrated rear rack. The Boda Boda has been discontinued by Yuba in favor of the Spicy Curry, so this listing is a reasonably priced alternative with similar performance. Listing can be found here.

2. Co-op CTY e2.1 | $950 | SF - Bay Area

**MSRP: $1,799 | Flywheel Price Comparison: $362 less than avg resale price | Flywheel Vehicle Value: $1,536**

The Co-op Cycles CTY e2.1 is a class-1 commuter ebike. Co-op is the in-house ebike brand of outdoor recreation retailer REI. REI has long been a retailer of premium dealer brands like Cannondale, Electra, Benno, Haibike, and Diamondback, and is now venturing into the ebike space with their own custom vehicles. The CTY e2.1 is designed for commuters, and consists of a series of features like an integrated rear rack, integrated lighting, and a mid-step frame that make it easy for new riders to tackle their commutes with an ebike. The powertrain features a 40Nm e5000 mid-drive motor and a 418Wh battery pack. While this is fairly modest, it’s on par with other commuters in this price range and is mostly sufficient for urban riding. REI has quietly become one of the most important companies in the owned ebike segment. By vertically integrating their own vehicles with a service network of 170+ stores nationwide, REI’s value prop of high-quality, affordable vehicles that can be maintained in virtually every major city is hard to beat. This listing has only been ridden for 5 miles and comes with an upgraded front suspension fork. The seller claims that the battery key is “lost,” which is a suspicious sign and a common indicator of a stolen bike. However, if the seller can verify ownership and is willing to transfer the registration, this listing is an opportunity to get a virtually new CTY e2.1 at a major discount. Listing can be found here.

3. Tern Vektron D8 | $1,550 | LA

**MSRP: $3,849 | Flywheel Price Comparison: $464 less than avg resale price | Flywheel Vehicle Value: $2,586**

The Tern Vektron D8 is a premium class-1 folding and light-duty cargo ebike. Its powertrain features an 80Nm Bafang M400 mid-drive motor and a 400Wh battery pack. While newer Vektrons use Bosch powertrains, the M400 Bafang system is still highly reliable and provides higher performance at a lower cost. The Vektron D8’s frame is quite unique and allows the vehicle to be a great cargo bike despite being so small. Its frame is slightly longer than that of most folding ebikes, which gives the D8 the handling and stability of a standard, non-folding ebike even when loaded with cargo. Combined with the strong frame-integrated rear rack, the Vektron D8 is a great option for urban riders looking for a portable and space-saving cargo hauler. Tern is highly reputed and has largely dominated the urban cargo bike segment. Not only are their vehicles extremely reliable and high-quality, they can also be easily maintained via Tern’s massive maintenance network. This listing only has a mileage of 29mi but is selling for ~$2.3K less than MSRP. One small detail about the listing that I appreciate is that it includes a picture of the odometer, which helps give potential buyers a bit more reassurance about the reported mileage. Listing can be found here.

4. Easy Motion Rebel Cross Lite | $1,500 | Seattle

**MSRP: $2,799 | Flywheel Price Comparison: $0 more than avg resale price | Flywheel Vehicle Value: $2,191**

The Easy Motion Rebel Cross Lite is a sporty class-1 hybrid ebike well suited for both trail and urban riding. Its powertrain features a 70Nm Yamaha PWseries mid-drive motor and a 396Wh battery pack, and is paired with a 10-speed Shimano Deore transmission. Yamaha PWseries motors are not very common on urban ebikes, but they’ve long been a go-to on recreational ebikes. Although their firmware is not quite as advanced as that of Bosch motors, they are significantly lighter. The Rebel Cross Lite’s battery pack is surprisingly small, especially since this bike is also designed for long trail riding. However, the Rebel Cross LIte is easy to pedal even when you’re out of power due to its light weight (49lbs) and high-performance transmission. Given that it’s a hybrid ebike, the Rebel Cross Lite has a suspension fork and hybrid tires that make it quite competent for gravel/off-road riding and excellent for commuting. Its frame also has an angled top tube, which helps make the ebike easier to mount while still minimizing frame flex. Easy Motion has a great reputation in the sector for its robustness and reliability. Not only does its parent company BH have a long heritage (founded in 1909), it also has a great repair network of 150+ bike shops nationwide. This listing is extremely well maintained and its current owner is actually an ebike mechanic. It only has a mileage of 82mi, and is selling for ~$700 less than its Flywheel Vehicle Value. Listing can be found here.

5. Gocycle GS | $2,199 | NYC

**MSRP: $2,799 | Flywheel Price Comparison: $100 more than avg resale price | Flywheel Vehicle Value: $1,699**

The Gocycle GS is an ultra-lightweight class-2 folding ebike. Founded by former McLaren engineer Richard Thorpe, Gocycle produces beautifully sleek, automotive grade ebikes. Its 15Nm front hub motor and 292Wh battery pack are stealthily integrated into the frame, and its magnesium alloy frame and removable wheels make the GS extremely easy to store or move. There’s even a rear suspension to help smooth the ride, which is particularly useful given that the small frame and 20” wheels make the GS feel quite zippy. The GS is a cheaper “sport version” of Gocycle’s G3, but it still has the same torque sensor, 3-speed internally geared rear hub, and frame that the G3 became popular for. Gocycle is technically a dealer brand; while their maintenance network is still small at the moment, it’s growing quickly. The GS isn’t the best option for heavy commuting, but it’s a great first and last mile ride to take with you on public transit or store in the trunk of your car. This listing doesn’t specify mileage or condition, but seems to be a lightly used vehicle and ~4 years old. Listing can be found here.

That’s it for this edition. Thanks again for joining, see you next week!

- Puneeth Meruva

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