Despite the rapid rise and mainstream popularity of e-scooters, market leaders continue to struggle with profitability. Lime, the largest scooter sharing company in the world, recently announced it is making some changes due to low ridership and regulatory changes.
The company is pulling out of 12 markets, including Atlanta, Phoenix, and San Diego in the U.S. Internationally, Lime is leaving three cities in South America: Bogota, Lima, and Rio de Janeiro.
Global staffing will also take a hit. As of now, 100 people, or 14 percent of full-time employees, will be impacted. It remains unclear how many part-time positions are on the chopping block. With these adjustments, Lime is hoping it can position itself for long-term success.
A Roller Coaster Existence
Initially, Lime intended to exist solely as a bike-sharing company. After seeing Santa Monica-based Bird take off in California, the company decided to invest heavily in electric scooter technology.
Today, Lime is worth $2.4 billion and has raised over $775 million. The company partners with Uber and is developing an anti-intoxication feature that uses sensors to automatically slow scooters that are driving erratically. At the end of 2018, the company reported that riders had taken more than 26 million trips on Lime vehicles, which include e-assist bikes, transit pods, and scooters.
However, the company has halted bike-share operations in several major cities to focus more on e-scooters. Even after successfully supporting tens of millions of rides, Lime is still not profitable and is struggling to break into certain markets. Unfortunately for e-scooter lovers, these challenges aren’t specific to Lime.
E-scooters All But Secure
E-scooters exploded onto the scene in 2017. For several years now, people have zipped across urban neighborhoods at 15 mph on fun and easy-to-control scooters. Lyft and Spin have launched their own electric scooter operations, and other transportation innovators continue to explore strategic partnerships. Segway is also selling e-scooters for commercial use.
However, some cities have been less open to the e-scooter revolution, claiming the vehicles are too dangerous and clutter sidewalks. Some local governments have banned riding outright, and others are increasing operating fees.
E-scooters also have short, difficult lifespans, as many are mistreated or vandalized, given the lack of rider accountability. Additionally, inclement weather damages early scooter models that can’t handle heavy wear and tear. Between maintenance costs, regulatory challenges, and charger fees, Lime and Bird have both struggled to get into the black.
Lime Charting a New Course
In response, Lime is changing its approach. The company is raising prices, building more resilient devices, and reallocating resources that were previously meant for bike-share operations. It may also experiment with replaceable batteries to curb high charging costs.
CEO Brad Bao wrote in a blog post, “While the vast majority of our 120+ markets have adopted micromobility transportation solutions quickly and are profitable, there are select communities throughout the world where micromobility has evolved more slowly.”
Only time will tell if these e-scooter unicorns can stabilize their economics and build sustainable businesses. For riders, enjoy your micro-commutes while you can. They may not be around, at least in the ride-sharing format, forever.