Weekly Brief: Lime Shows the Way for Micromobility Post Pandemic

E-scooter start-up Lime generated positive free cash flow and a quarterly profit in the third quarter of 2020, both firsts for the company.

CEO Wayne Ting said last week that Lime became profitable by retreating from markets where it was struggling owing to the pandemic and streamlining its operations in markets where it continued to have a presence. The company just launched its fourth-generation scooter in Paris, where Ting hinted that his company is set to unveil a new mode of transportation beyond e-bikes and e-scooters in 2021. The so-called “third mode” will probably be geared toward covering longer distances for daily commuters to travel to and from work.

All of these are promising signs from a beleaguered company and a battered industry. Before the pandemic came along, micro-mobility was the hottest new trend in transportation. Start-ups like Lime and Jump deployed fleets of e-scooters, mopeds and bicycles to cities around the world. Investors sent their valuations rocketing past a billion dollars. Analysts like McKinsey projected micromobility to become between a $300Bn and $500Bn market by 2030 – and then the world shut down.

Nothing better captures the ensuing destruction than a scrapyard in North Carolina, where thousands of red Jump e-scooters met their demise. Pictures of the event went viral, with shiny bikes dangling helplessly from the claws of an excavator. Bike enthusiasts cringed at the waste, while investors penned post mortems. Lime’s valuation plummeted 79% in May, from $2.4Bn to $510M just days before Uber pulled the plug on Jump and sold it off to Lime for pennies on the dollar.

Fast forward six months, the industry has lost myriad start-ups that will never come back and the pandemic has forced cut backs and consolidation. However, those companies that are still standing may have weathered the worst of it, as Lime’s announcements last week suggest. Furthermore, they look primed for impressive growth once the pandemic wanes.

Consider the fact that many cities around the world, in the midst of COVID-19, have pledged to shut down car lanes and permanently convert them to pedestrian, scooter and bike lanes. Paris has committed to convert 31 miles of lanes inside the city with a $325M investment. Montreal is creating 198 miles of new bike paths. Brussels, 24 miles. Seattle, 18 miles. Milan, 21 miles. The list goes on.

Micromobility companies will have to figure out solutions for disinfection, as consumers will likely continue to care about potential exposure to germs far into the future. Last week Frost and Sullivan published an impact assessment and post-COVID analysis of the two-wheeler industry, including scooters and motorcycles, and found that demand for personal and cost-effective mobility solutions is skyrocketing. Micromobility companies should be able to tap into that demand, so long as they can assure customers that they’re being safe and proactive.

That’s a far more attractive option than going extinct, so my bet is that micromobility companies will find a way to overcome consumer concern. Just look at Ford, which last week launched a £100,000 Micromobility Research Fund through its e-scooter company Spin. Our Paul Myles has the full details but no surprise the fund will focus on how to make e-scooter usage as safe, clean and copasetic as possible. COVID-19 will leave a scar but micromobility is here to stay.

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