Electric scooter rental company Lime is teaming up with Uber to bring an unconventional mode of transportation to the world.
Uber Technologies Inc. is investing in Lime as part of a $335 million financing round, the companies plan to announce on Monday. The deal, led by Alphabet Inc.’s venture arm GV, values the scooter business at $1.1 billion.
While details of the partnership are still being finalized, Uber plans to promote Lime in its mobile application and slap its logo on the scooters, executives from the two companies said. Uber took a similar step with a startup called Jump Bikes, which rents electric bicycles, before acquiring the business for more than $100 million in April. Uber said it still plans to roll out e-bikes in more cities around the world.
The Uber-Lime alliance has implications for the brewing scooter ground war. Since Lime was founded 18 months ago, the San Mateo, California-based company has raised $467 million. Los Angeles-based Bird Rides Inc. has nearly as much cash. It was founded by Travis VanderZanden, a onetime Uber executive who has adopted a similar aesthetic to his former employer: In contrast to Lime’s bright color scheme and affable executives, Bird uses darker tones, and its founder is a controversial figure. Investors recently valued VanderZanden’s year-old company at $2 billion.
Lime said its service, which lets customers rent scooters scattered around cities and leave them on the sidewalk for the next person to pick up, is available in more than 70 markets in the U.S. and Europe. The new cash will go toward buying tens of thousands of lightweight electric scooters.
The scooters are manufactured in China to the company’s design specifications. Brad Bao, a former Tencent Holdings Ltd. executive who co-founded Lime, is proud of the company’s investment in custom vehicles, as opposed to buying ones off the shelf. However, there’s a looming threat of a price hike as the U.S. targets scooters on a list of potential China tariffs. Lime said it doesn’t expect the trade war to impact its business. “We choose the harder path,” said Bao. “We’re a capital-heavy business.”
Lime’s partnership with Uber raises as many questions as it answers about the ride-hailing company’s scooter strategy. Uber has filed an application in San Francisco to introduce a scooter service of its own. There’s also the risk of cheaper forms of transportation eating into Uber’s main business of car fares.
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