The Lime Boom

One of the biggest stories in technology this year is the exploding popularity of Lime, Bird, Skip, and Spin. They are all electric scooter rental services and they can be found all over on the city streets and sidewalks. These startups allow riders to locate, rent and unlock scooters with a mobile app and, it only costs around ten cents per minute of riding. Although there are a lot of electric scooter brands, Lime has rapidly become the most popular first and last mile solution for riders. This advanced transportation is reshaping our society.

First, let us look at how Lime changed society’s investment trend. Lime announced that they surpassed 6 million rides since its inaugural launch in North Carolina. They also have $355 million in new funding at a $1.1 billion valuation (2018. 07). In addition, Lime closed $310 million in a Series D financing, valuing Lime at $2.4 billion. A group of returning backers and new investors, Bain Capital Ventures and IVP, led the round. Existing investors such as Alphabet have continued their support and joined the round along with several new investors. This new investment demonstrates the fundamental strength of Lime’s business.

According to Lime’s official website, they have more than 10 million sign-ups and over 34 million trips have been taken on a Lime vehicle – a 5.5x increase in trips in the last seven months alone. Lime now has operations in over a hundred of cities, towns, company, campuses, universities throughout 15 countries across five continents. In addition, many people resort to Lime because of their affordability. 34% of the users report an annual income of less than $50,000. Moreover, Uber has teamed up with Lime to add electric scooters to its app since July 2018. According to Bloomberg, the ride-hail giant is investing in Lime in a new $355 million round of financing.

Micro-mobility is a rapidly growing market. Across the United States and Europe, many cities have achieved their goals of advancing transportation equity by building safer and more sustainable communities. Lime is leading the way in not only establishing a smart mobility movement, but also in understanding and communicating its effects. This ridership grew faster in the first 18 months than the ride-hall industry did in its first two years.

Cities have achieved their goal of cutting car reliance and transitioning to micro-mobility adoption. Recent survey shows that Lime’s fleet of shared bikes and scooters attracts a new audience of people who ride bicycles infrequently. Bringing new riders into the fold of micro-mobility does more than just simply help to reduce car reliance. 30% of Lime riders replaced a trip by automobile during their most recent trip. Lime also partners with ‘Native Energy’, a nonprofit organization dedicated to providing sustainability solutions for companies like eBay and Ben & Jerry’s. Lime will fund carbon-reduction projects through ‘Native Energy’ to offset the emissions from its management vehicles. It also plans to purchase renewable energy credits. Although Lime is already uses electric-powered scooters, the company is putting in extra effort to ensure that electricity comes from renewable sources. According to a Lime press release, the company is planning to invest in a solar project in Iowa to “green its fleet” in Minneapolis. It will also be purchasing energy from Texas’s Capricorn Ridge Wind Farm to power its vehicle in Austin, Dallas, and San Antonio.

In addition to the electric scooters, the Lime boom also created a new job called “Lime Juicers.” Lime Juicers are people who bring the Lime scooters to their homes, charge them and make money. The two requirements of a Lime Juicer are that they need to own a vehicle large enough to pick up scooters and, they need to have enough electrical outlets at home to charge the scooters. Since every Lime scooter is instilled with a system that monitors its battery life and reports it to the app, at the end of the day, juicers can use the app to locate the scooters in need of charging. Payment is based on the dollar amount displayed in the Lime app in harvest mode. Lime has dynamic surge pricing, so the price of harvesting a scooter is based on the proximity to other scooters, as well as the difficulty of retrieving it.

Based on these analyses, I believe the dockless scooter and bike industry will continue to grow as Lime grows from 5 to 10 times in their current valuations. Lime benefits from a business model with strong unit economics, growth prospects, and competitive moats. Beyond this existing business, there is a potential significant additional upside: LimePods. LimePods is a car share program where users can find and unlock cars using the Lime app. This competes much more directly with Uber, Lyft and the massive car ownership market in general. Moreover, because the largest current cost for car ridesharing is the driver fee, car share services such as LimePods can significantly lower prices. It is just the beginning for LimePods, but services like this can ultimately lead to a market capitalization for Lime. Lime is worth $10 billion each or 5 to 10 times more than their last valuations.

Edited by Jenna Yun.

Source:

https://www.li.me/about-us

https://www.theverge.com/2018/7/9/17548848/uber-investment-lime-scooter-alphabet

https://cityformillennials.com/electric-scooter-share-lime-s/

https://www.cnbc.com/2018/06/14/scooter-start-ups-like-lime-and-bird-why-investors-love.html

https://electrek.co/2018/12/11/future-electric-scooter-sharing/

http://fortune.com/2018/10/09/lime-green-scooters-bikes/