Posted on Friday, Dec 14th 2018
The ride-sharing industry is going through an overhaul with the rapid emergence of bikes and scooters to address the demand for “micro-mobility”. According to CB Insights, more than 60% of US trips are made within the 0-5 mile distance. There is a growing demand for bike and cycle sharing services to solve the first and last-mile problem of providing rides from and to the transport hubs. It is this growing demand that has shot players like Lime into the Billion Dollar Unicorn club.
San Mateo-based Lime was founded in 2017 by Adam Zhang, Brad Bao, Charlie Gao, and Toby Sun who wanted to come up with a sustainable solution to this first and last-mile transportation problem. They wanted to build an eco-friendly and affordable service to help people move around their cities. Lime offers a fleet of electric scooters, electric bikes, and pedal bikes to its users. Users just need to download their app, find the nearest available ride, scan the QR code to unlock the ride and when done, lock the ride. Unlike the various city bike services, Lime does not require docking stations for users to store their ride. Instead, they can park it in a safe spot and the bike will be available for use to the next user.
Lime charges its riders a rental fee. It typically costs $1 for 30 minutes for non-students or 50 cents for 30 minutes for students with a .edu email address. It also offers a monthly subscription of $29.95 for general users and $14.95 for students that allows them to get up to 100 rides. Lime’s service has been well appreciated by users. It recorded 6 million riders within a year of operations and within the next 6 months, this September, had nearly doubled to 11.5 million riders. The service is already available in more than 100 cities in the country. It is also looking at international markets and this year launched in Paris, Berlin, and Zurich.
Lime is privately held and does not disclose its financials. However, analysts estimate its revenues at $34 million for the year. Its profitability figures are not known.
Lime has raised $455 million in funding from investors including Fidelity Management and Research Company, Triton Funds LLC, Atomico, Green Bay Ventures, Frankline Templeton Investments, GV, and Uber. Its last round of funding was held in July this year when it raised $335 million in a round led by Google Ventures and Uber that valued it at $1.1 billion.
The bike-sharing industry is witnessing growing interest from big players. Earlier this year, Uber announced plans to acquire bike-sharing company JUMP. In July this year, Lyft also acquired bike sharing company Motivate. Other competitors in the market include Bird and Spin.
Like other ride-sharing services, bike-sharing services also have their own legal issues to deal with. Last year, Bird was sued by Santa Monica city for operating without the proper licenses and permits. The company agreed on a settlement of over $300,000 in fines. Cities are also complaining about parking problems on sidewalks and rising accidents caused by scooter rides. In June this year, San Francisco city banned bike-sharing services while the companies applied for permits. Other cities like Denver and Nashville have banned these services as the city officials decide on the rules to govern the business.
I would like to know if you have used bike-sharing services. Do you think they are a nuisance, as some cities believe, or are they necessary to solve the problem of the first and last-mile connectivity?
More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns.
This segment is a part in the series : Billion Dollar Unicorns
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