Skip to main content

Are shared electric scooters going extinct? Lime’s valuation reportedly tanks

At this time two years ago, shared electric scooters that riders could rent by the minute were the hottest new thing in the world of personal electric transportation. Companies like Lime and Bird saw their valuations balloon north of $1 billion.

But the picture isn’t nearly as rosy anymore, with smaller electric scooter sharing companies shutting down, and larger companies facing significant devaluation.

Electric scooter companies were already struggling before the COVID-19 pandemic, largely due to the higher-than-anticipated cost of replacing short-lived electric scooters and the low rental prices needed to keep riders on their vehicles.

But with electric scooter sharing companies pausing operations for much of the last two months, the cash-starved companies are now being pushed to the brink.

The latest bad news for shared electric scooter companies comes in the form of a purported Uber investment deal in Lime.

Uber and Lime are in the process of negotiating a $170 million investment deal that would see Uber increase its stake in Lime, according to the Information.

While Lime is certainly interested in the cash infusion, it comes at a significant cost: a valuation of just $510 million. That’s down 79% from Lime’s $2.4 billion valuation in February of last year.

As part of the deal, Uber would likely shift its Jump electric scooter and e-bike operations over to Lime, who is better equipped to handle the micromobility operations, and Uber would have the right to acquire Lime at a fixed price sometime between 2022 to 2024.

Thus, Uber gets to hand off its Jump operations that are struggling to find profit, Lime gets a cash infusion and extra hardware, plus more prominent featuring in Uber’s ride-sharing app, while previous Lime investors see their positions considerably shrink in value.

But Lime isn’t the only scooter sharing company feeling the squeeze. Bird, the company’s main competitor, is also facing down a bleak reality that has seen hundreds of layoffs in recent weeks.

Both companies still account for the bulk of electric scooter sharing, but whether or not they’ll be able to survive this pandemic and come out the other side unscathed remains to be seen.

Electrek’s Take

While I didn’t foresee a global pandemic contributing to the equation, I pretty much called this scenario two years ago.

And sure, electric scooter sharing companies may be on their knees right now, but the bell hasn’t sounded yet. Things could still turn around.

Now more than ever, commuters are avoiding public transportation and turning to personal electric vehicles like electric scooters and e-bikes.

The only problem for the scooter sharing companies is that most of these riders are now buying their own e-scooters and e-bikes, opting to avoid sharing the same devices as others in public.

But as the current pandemic helps reshape our cities and change the way we think about transportation, these types of personal electric vehicles will become increasingly important.

If Lime and Bird can find a path to profitability and maintain their relevance in a world where budget electric scooters are getting cheaper by the month, they might just stand a chance.

FTC: We use income earning auto affiliate links. More.

Stay up to date with the latest content by subscribing to Electrek on Google News. You’re reading Electrek— experts who break news about Tesla, electric vehicles, and green energy, day after day. Be sure to check out our homepage for all the latest news, and follow Electrek on Twitter, Facebook, and LinkedIn to stay in the loop. Don’t know where to start? Check out our YouTube channel for the latest reviews.

Comments

Author

Avatar for Micah Toll Micah Toll

Micah Toll is a personal electric vehicle enthusiast, battery nerd, and author of the Amazon #1 bestselling books DIY Lithium Batteries, DIY Solar Power, The Ultimate DIY Ebike Guide and The Electric Bike Manifesto.

The e-bikes that make up Micah’s current daily drivers are the $999 Lectric XP 2.0, the $1,095 Ride1Up Roadster V2, the $1,199 Rad Power Bikes RadMission, and the $3,299 Priority Current. But it’s a pretty evolving list these days.

You can send Micah tips at Micah@electrek.co, or find him on Twitter, Instagram, or TikTok.