Under the threat of climate change, many global cities nowadays are promoting shared commuting modes to reduce greenhouse gas emissions. Shared electric bikes (e-bikes) are emerging modes that compete with bikes, cars, or public transit. However, there is a lack of empirical evidence for the net effect of shared e-bikes on carbon emissions, as shared e-bikes can substitute for both higher carbon emissions modes and cleaner commuting modes. Using a large collection of spatio-temporal trajectory data of shared e-bike trips in two provincial cities (Chengdu and Kunming) in China, this study develops a travel mode substitution model to identify the changes in travel modes due to the introduction of shared e-bike systems and to quantify the corresponding impact on net carbon emissions. We find that, on average, shared e-bikes decrease carbon emissions by 108–120 g per kilometre. More interestingly, the reduction effect is much stronger in underdeveloped non-central areas with lower density, less diversified land use, lower accessibility, and lower economic level. Although the actual carbon reduction benefits of shared e-bike schemes are far from clear, this study bears important policy implications for exploring this emerging micro-mobility mode to achieve carbon reduction impacts.