Uber will add Scooter Share Start-up Lime to it's App


(Bick Bhangoo) #1

One would think that after Uber and Waymo parted company in court with Uber paying Waymo for the indulgences of its past CEO and Uber Freight partners. However, under the new direction of Dara Khosrowshahi, Uber and Alphabet are more than just best buddies, they are investment partners.

This new deal comes a month or so after Uber walked away from a deal to buy out Motivate, the US's largest bike-share gig, leaving it open to Lyft. However, Uber is no stranger to bikeshare and scooters; it owns Jump.

In this new deal, the Lime brand will retain its image, and it will be available on the Uber app. Alphabet has led the investment portfolio together with Uber, so they are partners in this venture.

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David Paul Morris | Bloomberg | Getty Images

Essentially, Uber will partner with Lime to provide this service via the Uber app. This will give Lime immediate access to Uber customers around the US, and it will give Uber immediate access to another much sought after service.

This deal comes after Uber bought out Jump bikes, and its another addition to its one-stop Uber shop for personal transportation. The concept of mergers and partnerships is the fastest, and cheapest way Uber can continue to compete for road dominance in the US market.

Lime Investment

Uber has no intentions of just partnering with Lime; it intends to invest in the company and increase Lime's infrastructure so it can expand to meet the growing demand that scooters have in specific locations.

This round of investment will be led by Uber and Alphabet's GV arm. Alphabet, which is Google's parent company has expanded its investment portfolio from software to various niches including heavy investment in the autonomous vehicle market and road transportation solutions.

This latest round of investment brings it hand in hand with Uber into personal transportation solutions.

Rachel Holt, an Uber VP stated to the press that "Our investment and partnership in Lime is another step towards our vision of becoming a one-stop shop for all your transportation needs.

Lime already has an expansive footprint, and we're excited to incorporate their scooters into the Uber app, so consumers have another fast, affordable option to get around their city, especially to and from public transit."

The Lime Market

Lime is Bird's main rival in the docker's scooter share sector. These companies have reached the billion-dollar status, and Lime is international with a new gig in Paris, France.

Unlike Uber's operation, Lime is a capital expenditure heavy operation, requiring personal and equipment to maintain their services.

Lime has so far raised close to $480 million and is still fighting off stiff competition from Bird, however with this new Uber/Alphabet deal, it looks like Lime will have the edge on all competitors.

How Lime Operates (Capex)

Lime keeps a large ground level workforce on its payroll; it needs street workers to collect the scooters at night and bring them to recharging centers.

At 6 am the following morning, they return them to specific locations and to take out and replace the scooters that need to be replaced due to service requirements.

These ground force personnel are independent contractors called juicers, and they get paid for their efficiency. According to Lime, around 70% of all scooters are accounted for every night, and the scooters are left in hot spots based on statistics that constantly update the hotspot locations.

Scooters that require maintenance are taken to maintenance locations, and either fixed or scrambled for spare parts.

Scooters that are unused will be relocated to locations that have 100% usage with the intention of filling in a growing locational demand.

Bottom Line

Uber is investing in a capex opex company, unlike the Uber rideshare business, Lime is cost intensive and demands constant physical control and oversight. On the other hand, it is a growing demand service and with global expansion, fits nicely into Uber's global presence.

As for Alphabet, all is fair in business and war, and that is the situation with these two companies, one day they are at each other's throats the next day they are bosom buddies, just like any standard human relationship.