Lime pulls out of 12 markets, cuts workforce
Scooter-sharing company Lime has announced its pullout from 12 markets internationally and layoffs of 14% of its full-time personnel.
Matt McFarland reported the news for CNN:
Lime, the world’s largest scooter sharing company, is pulling out of 12 markets and laying off staff as it struggles to become profitable.
In the US, Lime will exit Atlanta, Phoenix, San Diego and San Antonio. Overseas, it’s pulling out of cities including Bogota, Lima and Rio de Janeiro.
Lime is eliminating 14% of its full-time employees worldwide, which will impact about 100 people, according to the company. Lime declined to say how many part-timers will be affected.
The company said it was struggling to turn a profit amid low ridership, and that it is facing regulatory challenges in some of these markets, including bans on nighttime riding and high fees to operate.
“We have shifted our primary focus to profitability,” CEO Brad Bao said in a blog post. “While the vast majority of our 120+ markets have adopted micromobility transportation solutions quickly and are profitable, there are select communities throughout the world where micromobility has evolved more slowly.”
Lime launched as a bikeshare company in 2017, but switched its focus to electric scooters the next year following the success of Bird, the Santa Monica startup that pioneered scooter sharing. Uber and Lyft have also since launched scooter operations.
The Verge’s Andrew J. Hopkins wrote:
Lime CEO Brad Bao said the company has decided to leave cities where “micromobility has evolved more slowly.” The cities where Lime will be shutting down operations include Atlanta, Phoenix, San Diego, and San Antonio in the US; Linz, Austria in Europe; and Bogotá, Buenos Aires, Montevideo, Lima, Puerto Vallarta, Rio de Janeiro, and São Paulo in Latin America.
The company will also lay off 14 percent of its workforce, or around 100 employees, according to Axios. In his statement, Bao acknowledged that some employees would be leaving the company.
“Financial independence is our goal for 2020, and we are confident that Lime will be the first next-generation mobility company to reach profitability,” Bao said. “We are immensely grateful for our team members, riders, Juicers and cities who supported us, and we hope to reintroduce Lime back into these communities when the time is right.”
Kia Kokalitcheva from Axios noted:
The big picture: Lime is not the first or only scooter company to make cuts.
- Bird, Scoot, Lyft, and Skip have all held layoffs or retreated from certain markets over the past year.
- Lime too has made small cuts, as when it suspended operations and laid off workers in St. Louis in late 2018, though it emphasizes to Axios that it will continue to expand to new markets this year.
- The companies have generated headlines for huge losses as they attempt to manage vehicle attrition, labor costs, and regulatory battles.
What they’re saying: “We’re very confident that in 2020, Lime will be the first next-generation mobility company to be profitable,” Lime president Joe Kraus tells Axios.
- He said that projection is based in part on improvements to Lime scooters’ longevity, which in 2019 went from from six months to about 14 months.
In between the lines: Kraus also refuted rumors that Lime is actively raising a new round of funding despite months of ongoing rumors that the company was running out of cash and looking for a fresh infusion. (Meanwhile, rival Bird announced in October $275 million in new funds.)
- Kraus added that the company is not looking to sell but could be interested in being on the other side of the M&A table.
- “We always look opportunistically in being a buyer,” he said.