Startup: Uber And Lime Have Partnered Up

Screen Shot 2018-08-27 at 8.02.51 AM.png

Since its founding in 2009 by Travis Galvanik and Garrett Camp, Uber has transformed the transportation industry by incorporating technological innovation from Silicon Valley into its variety of services located in 785 locations worldwide. Local services such as UberBoat in Croatia and Turkey and UberAuto in India and Pakistan are prominent examples of how Uber has made itself as a unique ridesharing company where the passengers can enjoy the same ride service they would get from a regular UberX service.

A similar ridesharing company, Lime, allows people to share LimeBikes that are placed within city boundaries for people to use whenever they feel like, although it also encounters its fair share of criticism just like Uber. Lime was created in 2017 by co-founders Brad Bao and Toby Sun and was supported by $12 million venture funding that was led by Andreessen Horowitz, and since then, it has faced competition from similar companies such as Bluegogo and Social Bicycles.

What is unique about LimeBikes is the option for riders to leave the bikes anywhere within the in a selected city. Riders can find the closest bike or scooter and unlock it by scanning a QR code, paying $1 for every 30 minutes. However, Lime is also aware of how it can be a nuisance for other people to see ridesharing bikes being placed at random sidewalks, especially with rival, Bluegogo, facing legal action from city agencies in San Francisco for placing bikes on public sidewalks without proper planning or permits.

On July 9, it was announced that Uber has teamed up with Lime by investing in it as part of a $335 million financing round that was led by Alphabet Inc.’s venture investment arm, GV. As a result of the deal, Uber users are now given the opportunity to rent out Lime's e-scooters and the deal has allowed Lime to be valued at $1.1 billion.

According to a blog post sent out by Lime’s co-founders, Uber as a partner of Lime will give people a greater variety of transportation modes to get around, especially for people who are living without a car. Experts in the ridesharing industry have noted that the scooters are increasingly used by people since they replace shorter ride-share trips, which would lead to more investment into more scooters being created.

The news had come a week after Uber's most prominent rival, Lyft, had purchased the largest bike-sharing company in the U.S., Motivate, on July 2 for a price of around $250 million. Lyft will be taking over Motivate’s city contracts and will establish more bike offerings in major markets nationwide, including the markets that were already established by Motivate.

Back in June, Uber had went into negotiations with the city of San Francisco in order to get permits so that the company could be able to place the scooters from recently acquired bike-sharing startup Jump, which Uber acquired in April, all over the city. The negotiations were a result of the San Francisco city government voting for new regulations to remove unlicensed bikes of the street by June 4 and to apply permits for the e-scooters by June 6.

Uber’s aforementioned acquisition of Jump cost over $200 million and just like Lime, Jump’s bikes can also be picked up and left anywhere in the city, just as long as people pay $2 per 30 minutes instead. This acquisition of Jump also shows much effort Uber has put towards investing in the future of ride-sharing via smaller forms of transportation like bicycle and e-scooters.

The joint partnership between Uber and Lime still do not mean that scooters will be mostly left on the streets and potentially be abused by vandals who simply do not want to see any e-scooters at all, especially e-scooters that are placed in San Francisco. The regulations that were placed by San Francisco City Hall can help Uber be more aware of these risks and can influence the company to place selected bikes and scooters in selected areas.

Lime has over 70 operations in the U.S. and Europe and its new partnership with Uber have come at a time where more people are using micro-mobility solutions to help them get to work or anywhere they want without having to get in a car. Using an e-scooter or a bike helps the individual get to their desired destination at a more affordable rate than calling a car or cab. 

Using a micro-mobility form of transportation can also help the individuals save money from driving a car too as owning and operating a car costs an average of $8,469 annually or $769 monthly. More factors can add up to the reliability of the individual’s car such as the amount of gas that they have to pump in the car, the cost to maintain and repair, and also the depreciation of value in a car over the years.

San Francisco’s city data in regards to Lime users have shown that for the 7,000 people who have used the service, 53 percent chose the Lime scooter over their car and 39 percent said they use Lime to get to or from public transportation. The reliability of the Lime bikes and scooters, especially after its partnership with Uber, is exceptional in a city like San Francisco where it is generally difficult to find free parking and that parking lots can cost between $20 and $60 per day.

Just like what Uber did less than a decade ago when it revolutionized the ride-sharing industry, its new partnership with Lime can be beneficial to the income of the riders, saving them money from driving or even getting to a car driven by a contracted Uber driver. Another good reason can be that using the bikes and mini-scooters can help decrease traffic congestion and air pollution.