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Uber, Lime Partner to Add Electric Scooters to Transportation Lineup

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【Summary】Dockless electric scooters are becoming more popular in large cities and Uber is looking to capitalize on the new type of transportation by expanding its application to the two-wheelers.

Original Vineeth Joel Patel    Jul 15, 2018 6:00 PM PT
Uber, Lime Partner to Add Electric Scooters to Transportation Lineup

Uber has become one of the more popular ways to get around for individuals looking to get past traditional automobile ownership. If you live in an urban area, using Uber to get around could be cheaper than making car payments, shelling out money for insurance, and paying to find some place to park the vehicle. Ride-hailing companies like Uber and Lyft make things easier. 


While Uber is a force to be reckoned with when it comes to being a ride-hailing company, Uber is looking for other avenues to explore. CEO Dara Khosroshahi claimed that Uber was looking into expanding its lineup of transportation methods to flying cars and bicycles. At the time, Khosroshahi didn't say anything about scooters, but it looks like Uber is spreading to allow users to rent electric scooters through its app. 


Lime Electric Scooter.jpg


Uber To Bring Scooters To Users


According to a report by Bloomberg, Lime, an electric scooter rental company, has announced a partnership with Uber to allow the ride-hailing company's users to get around on two wheels. As the outlet states, the ride-hailing giant invested $335 million as part of a funding round, which was led by Alphabet's venture capital arm GV. Apparently, the new funds increase Lime's valuation to $1.1 billion. 


Details on the collaboration are scarce, but we know that Lime's electric scooters will be available through Uber's smartphone application. Uber's logo will also sit side-by-side with Lime's on the scooters, executives from both companies stated. Neither company said how many cities or which ones the partnership would be available in. Since Lime is based out of San Mateo, Calif., we expect the state to be the first one to give Uber's users access to the electric scooters. The company is available in 70 cities in the U.S. and Europe. 


"Our investment and partnership in Lime is another step towards our vision of becoming a one stop shop for all of your transportation needs," said Rachel Holt, former head of Uber's North America ride-hailing business. "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." 


Lime Electric Scooter 2.jpg


A One Stop Shop For Everyone


The recent partnership reveals that Uber isn't to keen on sitting still and sticking with cars. The new deal with Lime also marks the second time Uber has spread out to something other than cars. Earlier this August, Uber purchased e-bike sharing startup Jump for roughly $200 million. Jump is a dockless electric bike service that allows Uber's users to unlock and rent a bicycle through the ride-hailing company's app.


Uber's funding, according to Lime, will go towards buying more scooters – tens of thousands of units. The company currently allows users to rent scooters in 70 cities and leave them on the sidewalk for the next individual to use them. 


The scooters, as Bloomberg states, are built in China to Lime's exact specifications. Brad Bao, one of Lime's co-founders, is proud of the way Lime invests in custom vehicles, instead of purchasing ones that are already premade. The threat of increased prices, though, is looming because of potential tariffs on China's end. Lime doesn't believe that a trade war will have a drastic impact on its business. "We choose the harder path," said Bao. "We're a capital-heavy business." 


Uber's new partnership with Lime raises a lot of questions. Apparently, the outlet states that Uber recently filed an application in San Francisco to come out with a scooter service of its own. Where and how Lime fits into that equation is still a bit of a mystery. Then, there's the problem with a new service cutting into Uber's pre-existing ones. If more users decide to use Uber's and Lyft's scooters, how will that play into the larger picture for its other services? 


Lime Electric Scooter 4.jpg


How Does Lime Fit Into Lyft's Equation?


"As a company we've leaned into self-cannibalization throughout our history," said Holt. "We are going to continue to double down on the Jump acquisition that we've made, and we've got a very expansive roll-out strategy there that we're excited about." 


There were a few electric scooter companies to choose from, but Uber went with Lime because of the company's availability. "We feel like their footprint is obviously quite expansive at this point, and we're really excited to see where it can go," said Holt. The deal, though, as Holt told the outlet, doesn't stop Uber from coming out with a service of its own. 


Uber clearly has practice with bringing different types of transportation methods to its users and is set to heat things up with the growing scooter war. As Bloomberg points out, Lime, which has been in operation for approximately 18 months, has raised $467 million in that time. But there's another California-based electric scooter company called Bird Rides that Lime is competing with. 


Bird Rides, though, is shrouded in a little bit of controversy. The outlet claims that Travis VanderZanden, a former executive at Uber, founded Bird Rides. VanderZanden is somewhat of a controversial person, though. Back in 2014, Lyft's COO VanderZanden was taken to court by the company for breaching his confidentiality agreement. Lyft stated that he downloaded company documents before joining Uber. 


Despite the controversy surrounding VanderZanden, Bird Rides is valued at a whopping $2 billion after being open for just a year. 


Uber isn't the only ride-hailing company that's looking to expand its service with an electric scooter offering for users. Lyft recently showed some interest in having a scooter service for its users. The company, though, hasn't announced any partnerships or collaborations. It hired Caroline Samponaro who previously worked at Ofo, the Chinese bike-share firm that has plans to announce a scooter service of its own. 


With major players like Uber and Lyft working towards having electric scooter services for users, urbanites will have another way to get around that doesn't involve a car or a bicycle. 

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