Uber banks on two-wheeled future with $170m stake in Lime scooter rental firm
Uber led a $170m bet on Thursday that as the coronavirus pandemic upends its business, two wheels may be better than four.
The ride-sharing business has partnered with Alphabet, Google’s parent, and Bain Capital Ventures to invest the money in Lime, an electric scooter and bike rental company.
Under the deal Uber will transfer Jump, its own electric bike and scooter division, to Lime and the companies will integrate their apps.
The news comes as Uber has been hard hit by the coronavirus pandemic. On Wednesday the company announced it was axing 3,700 staff and that its chief executive, Dara Khosrowshahi, would forgo his base salary for the rest of the year.
Uber’s gross bookings have fallen 80% since the pandemic triggered a wave of quarantine measures around the world, according to a report from the tech website the Information.
It is the latest “sharing economy” company to be hit hard. AirBnB also announced plans to make 1,900 staff redundant this week, about a quarter of its global workforce, after customers cancelled travel plans during the pandemic.
Three-year-old Lime now operates in 120 cities across more than 30 countries. It too has been hit by Covid 19. The company laid off 80 employees, or 13% of its staff, in April due to the pandemic’s impact on the business.
“Almost overnight, our company went from being on the eve of accomplishing an unprecedented milestone, the first next-generation micromobility company to reach profitability, to one where we had to pause operations in 99% of our markets worldwide to support cities’ efforts at social distancing,” wrote Lime’s chief executive, Brad Bao.
Bao will become chairman of Lime. Lime’s new chief executive, Wayne Ting, predicted that bike and scooter rentals would become integral to city transportation as the world recovers from the pandemic.
“Micromobility will be vital to the new world affected by Covid-19 and we are already seeing this as cities begin to move again. With our new financing and expanded offerings, we are strongly positioned to meet the needs of riders in a safe and reliable way,” he said.