What Does Lime Really Want?

Are cities, people, and Lime itself really ready for what the e-scooter behemoth wants to do to the world?Near San Francisco’s bustling Fisherman’s Wharf in the middle of the afternoon two weeks ago, a 69-year-old woman took what was likely the last e-scooter ride of her life. It’s not clear who struck who at Embarcadero…

What Does Lime Really Want?

Are cities, people, and Lime itself really ready for what the e-scooter behemoth wants to do to the world?Near San Francisco’s bustling Fisherman’s Wharf in the middle of the afternoon two weeks ago, a 69-year-old woman took what was likely the last e-scooter ride of her life. It’s not clear who struck who at Embarcadero and Bay, but the point is moot. The scooter collided with a massive cement truck, the sort of cataclysmic transportation asymmetry now endangering lives and disrupting communities all over the world. The city bears some blame. It had been tragically slow to deal with the upsurge in e-scooters and e-bikes. Ironically, SF transportation bureaucrats were scheduled to meet just days later to discuss safety improvements — too little, too late for the elderly woman, who suffered life threatening injuries.These days, eyes in the back of your head come in handy on the streets of San Francisco. Walking to a meeting recently, I dodged an e-skateboarder slaloming through the crowd, then pivoted again just in time to avoid being flattened by an oncoming scooter, followed closely by a near collision with a glowing red hoverboard and e-bike — just some of the tech-enabled vehicles competing for control of the sidewalk.This is a fight with dramatic consequences for our cities.Augmented pedestrians balancing on all manner of powered personal crafts rule the concrete footpaths to success in the world’s startup capital. My destination that day was the headquarters of Lime, a double unicorn that’s chasing global scale while upending the landscape of our cities one pedestrian walkway at a time.As with any paradigm shift, there are skeptics on one side and true believers on the other. This is a fight with dramatic consequences for our cities. When and how micromobility ultimately morphs into a stable marketplace in the near future is an open question.Is this a passing phase of urban millennial infatuation subsidized by venture capital billions, or are we witnessing a green revolution in transportation?Lime started in bikes. A scant two years ago, they saw the spike in the adjacent e-scooter industry and jumped on board so fast and effectively that today they are far and away the world’s biggest e-scooter player in the U.S. and worldwide.Bird, of Santa Monica, was first to market and got the early business press, but is now a distant second. Lime, in contrast, hit 50 million rides in April, doubling that figure to eclipse the vaunted 100-million mark in September, a benchmark achieved twice as fast as Uber.But rapid growth has costs. This January 9, CEO and co-founder Brad Bao announced in a post that Lime was abandoning 12 markets, including giant cities like Sao Paulo, Rio De Janeiro, Buenos Aires, and Bogota in order to shift “our primary focus to profitability.” As Axios noted: “After two years of explosive growth, scooter companies have entered a new phase — survival of the fittest in a capital-intensive, money-losing industry.” Lime also laid off approximately 100 employees, or roughly 14% percent of its workforce, a fact I couldn’t help but notice. My email requesting final comments for this article from the nice communications manager who had worked for four years for Lyft before hopping onto the Lime train bounced. She, too, had gotten the axe.Toby Sun is tall and athletic. Dressed in a colorful, sporty outfit, he looks and sounds like a confident tech co-founder. Sun was Lime’s original CEO, and swapped roles with Brad Bao this past May to focus on culture and future research. “I’m a big fan of people and culture… with those we’re going to make everything happen. Going through iterations of product, moving from bikes to e-bikes to scooters and now testing many things.”While competitors talk about customers and users, Sun gushes that “we use community a lot as a term internally, because we know as the micromobility provider serving people, it’s not just the riders, it’s also the nonriders, the cities, the partners we work with.”I pointed out the headlines the past two years scream a darker narrative. “‘Defective’ Lime Scooter Left Indianapolis Rider With Traumatic Brain Injury… Nashville Is Banning Electric Scooters After a Man Was Killed…Lisbon Battles Scourge of Electric Scooters Abandoned on Streets… An Electric Scooter Scourge Is Stalking Paris. Scooters Set on Fire, Thrown Into Ocean by People Fed Up With Clutter… San Francisco Smacks Down Scooter Startups Bird and Lime.”Mayor London Breed is an unabashed e-scooter fan. “I like scooters,” she told the Examiner.“ You can ride ’em in a dress.”And, of course, that poor woman on Bay Street represents a larger, disturbing trend. Between 2014 and 2018 there have been 39,000 known scooter related injuries nationwide, according to a new study by the University of California, San Francisco. Scooter-related injuries and hospital admissions soared by 222% during that period. Most troubling: one-third of these patients suffered head trauma, twice the rate typically sustained by bicyclists.E-scooter usage has grown in part through convenience and ubiquity. Venture capital millions have made them readily available in many cities with an Uber-like experience: the app unlocks the scooter for a dollar or euro, and then it’s 15 cents a minute for what generally is just a one to two kilometer ride. If you live in a major city, you’ve seen it unfold — a full-on invasion fueled by profit-seeking VCs. Seizing upon a regulatory vacuum, operators tossed thousands of scooters at cities with a libertarian disdain for public safety (shoddy, early Chinese models featured defective brakes, steering failures, and toy-sized tires). Zuckerberg’s famous motto, “Move fast and break things,” comes to mind. Except the “things” breaking happened to be bones and communities.Bird may have been the most brash, but Lime was a close second. When the company dumped scooters in San Francisco in June of 2018, they were almost immediately hit with a cease-and-desist order for operating without a permit. Lime sued, but not before losing out on the city’s year-long pilot program, launched with two smaller providers. After Lime’s appeal, San Francisco’s Municipal Transportation Agency put forth a competitive bid process for scooter operators, with criteria ranging from safety to sustainability to hiring and community engagement.All seems forgiven today. This October, Lime, Bird, Scoot, and Spin won permits to operate 1,000 units each in San Francisco, with a potential expansion to 2,500 per company if they play nice. Mayor London Breed is an unabashed e-scooter fan. “I like scooters,” she told the Examiner. “You can ride ’em in a dress.”What about those horrendous headlines chronicling the bellicose behavior of so many e-scooter startups assaulting cities? That was pre-pivot. Lime has changed. “We always take a collaborative approach,” Sun asserts, and points to signs that Lime’s new stance is delivering key results: permits to operate. “At the beginning, when we talked with 10 cities, maybe only two were saying an immediate yes.Now, probably seven to eight have immediate, strong interest or are working on some regulations. New York, Tokyo, and London “might take a little more time,” Sun calmly adds. “But if you look at the number of markets we’re in now, over 30 countries, over a hundred markets. That’s a huge number.” It’s also a number that appears to have declined as Lime has retreated from at least four countries — Brazil, Argentina, Peru, and Colombia. Bao explained why to Marker: “While our focus on growth gave us the necessary scale and cemented our position as the market leader in micromobility, we have shifted our focus over the last few months from growth and expansion to profitability and building a durable, long-term business.”It’s all riding on dataData gained from tracking usage patterns to predict when and where to place scooters may be one of Lime’s competitive advantages. “We take data seriously in terms of how to enable the city to build trust and to help them do better urban planning. Everything that we share is anonymous so that they can use aggregated data to know, ‘Hey, which street is getting more ridership?’ to potentially build more bike lanes, scooter lanes, or parking.” Lime is leveraging its analysis of riding patterns with the Austin to help determine where to locate new mobility lanes. Similarly, it has helped Santa Monica decide where to place more than a hundred parking corrals. Lime has also joined the Remix standardized data platform to “help cities manage shared bike and scooter vehicles and understand demand, trip patterns, and utilization.”Raising funding for micromobility firms is getting far harder (with lowered valuations) in a business where multiple players hold contracts.Lime claims another advantage — it bakes its own bread, unlike many competitors who have relied on cheap Chinese scooters plagued with safety and reliability issues. “From day one, we’ve been manufacturing the bike, the scooter, and e-bike with our OEM partners,” he says. “Because we own the quality of our vehicles, we own the experience of the product.”Sun has clearly laid out some of the operational rationales underlying why Lime may one day prosper… but then again even before this January’s layoffs his company was projected to lose $300 million in 2019 on just $420 million in gross revenue.Given that harsh reality, it’s only natural that Lime would focus more on profitable markets and “achieving financial independence.” Raising funding for micromobility firms is getting far harder (with lowered valuations) in a business where multiple players hold contracts. Both Bird and Lyft laid off staff dedicated to micromobility last year. This past December, e-scooter startup Unicorn shut down without issuing refunds for what turned out to be a phantom scooter. CEO Nick Evans blamed pricey Facebook ads — and the weather. “Unfortunately… the ads were just too expensive to build a sustainable business,” he wrote in a final email. “And as the weather continued to get colder throughout the U.S. and more scooters from other companies came on the market, it became harder and harder to sell Unicorns…”It’s worth pausing a beat and taking in what a sea change this has been. During the giddy e-scooter boom of 2018, Silicon Valley VCs couldn’t throw millions at the sector fast enough. That was the year Lime raised over $400 million in its series B and C rounds, including major contributions by Andreessen Horowitz (a backer since seed stage), Google Ventures, Uber, and others. Then competitor Bird shocked investors by reporting a loss of $100 million in the first quarter of 2019. Lime was lucky to raise another $310 million this February, bringing its valuation to $2.5 billion. Just in time. Last spring, the IPO belly flops of Uber and Lyft spilled more doubt onto other ride-sharing models.In June, TechCrunch’s Kate Clark wrote in Startups Weekly: “The scooter cash desert” that “investors are more aware of the steep costs of building and scaling these hardware-heavy businesses.” Sarah Smith of Bain Capital, a Lime investor, told FreightWaves that sharing economy trends and a “near vertical demand curve” led it to invest. “But it’s certainly a risk,” she acknowledged. “You have a physical fleet on the street; are cities going to invest in this? There are a lot of questions.” Nor should it be eye-opening that e-scootering is far from a 365-day-a-year business, and that many cities are inhospitable to the highly exposed transport mode during the winter months.Joe Kraus, Lime’s COO, is my next interview and there’s a break, so I tour Lime’s bright, clean offices and can’t help but notice… how few people seem to be working here. Downstairs my friendly PR handler shows me several Lime scooters available for staff to take out. She offers me a gift — a cool collapsible helmet, one of the 250,000 Lime says it’s giving out free to promote safety. I remember a friend who collects trivia and artifacts from overvalued
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