The electric scooter rental company Lime merges with Uber to spread this unusual way of moving around the world. Uber Technologies invested in Lime 335 million USD. The deal, run by the venture capital firm of Alphabet Inc, GV, estimates the business of the electric scooter rental company to 1.1 billion USD.
Although the details of the partnership are still finalizing, it is clear that Uber plans to popularize Lime in its mobile app and put its logo on the scooters. Uber made a similar step with a startup called Jump Bikes, which leased electric bikes, acquiring its business for more than 100 million USD in April. Uber said that is still planning to launch own e-bike offer in more cities around the world.
The Uber-Lime union will have consequences for the “scooter war”. Since Lime was founded 18 months ago, the company from San Mateo, California, raised 467 million USD. The Los Angeles-based Bird Rides has almost the same capital. Unlike Lime’s bright color scheme and attractive leaders, Bird uses darker tones, and its founder is a controversial figure.
Lime said that its service, which allows customers to hire scooters around the city, is available in more than 70 US and European markets. The new capital will go to buy tens of thousands of light electric scooters.
They are produced in China according according to the company’s specifications. Brad Bao, a former executive director at Tencent Holdings, co-founder of Lime, is proud to focus consumer thinking on the specific need for use rather than necessarily buying a vehicle and not using it for months. However, there is a threat of rising prices, as the US directs scooters to the list of potential Chinese goods, which will have higher tariffs. Lime said that did not expect the trade war to affect her business.
The partnership of the two companies raises as many questions as it gives answers to the company’s scooter strategy. Uber has already filed an application in San Francisco to submit its own scooter service. There is also a risk that this occurrence of cheaper modes of transport will undermine Uber’s core business of providing car transport.
After taking Uber’s CEO post last year, Dara Khosrowshahi formulated a strategy that would make the company’s application a central place for all types of urban transport. This includes public transport, car rental, scooters and bicycles.
Uber is attracted by Lime because the service is already available in major cities. The deal, however, does not rule out the possibility that Uber can enter the scooter business itself.
Lyft, which has gained popularity in the United States over the past year, is also ready to enter into a scooter and bicycle rental business. It announced last week that was buying Motivate, the Citi Bike operator in New York and similar services in other cities.