Yesterday, we learned that 18-month-old, Bay Area-based electric scooter rental company Lime is joining forces with the ride-hailing giant Uber, which is both investing in the company as part of a $335 million round and planning to promote Lime in its mobile app.
According to Bloomberg, Uber also plans to plaster its logo on Limes scooters.Lime isnt being acquired outright, in short, but it looks like it will be.
At least, Uber struck a similar arrangement with the electric bike company JUMP bikes before spending $200 million to acquire the company in spring.There are as many questions raised by this kind of tie-up as answered, but the biggest may be what the impact means for Limes fiercest rival in the e-scooter wars, 15-month-old L.A.-based Bird,which several sources tell us also discussed a potential partnership with Uber.Despite recently raising $300 million in fresh capital at a somewhat stunning$2 billion valuation, could its goose be, ahem, cookedAt first glance, it would appear so.
Ubers travel app is the most downloaded in the United States by a wide margin, despite gains made last year by its closest United States competitor, Lyft, as Uber battled one scandal after another.
Its easy to imagine that Limes integration with Uber will give it the kind of immediate brand reach that most founders can only dream about.A related issue for Bird is its relationship with Lyft, which ..
isnt great.
Birds founder and CEO, Travis VanderZanden, burned that bridge when, not so long after Lyft acqui-hired VanderZanden from a small startup hed launched and made him its COO, he left to join rival Uber.Lyft, whichsuedVanderZandenfor allegedly breaking a confidentiality agreement when he joined Uber,later settledwith him for undisclosed terms.
But given their history, its hard to imagine Lyft which also has a much smaller checkbook than Uber paying top dollar to acquire his company.Where that leaves Bird is an open question, but people familiar with both Bird and Lime suggest the e-scooter war is far from over.For example, though Uber sees its partnership with Lime as another step towards our vision of becoming a one-stop shop for all your transportation needs,two sources familiar with Birds thinking are quick to underscore its plans to expand internationally quickly and not merely fight a turf war in the United States (It already has one office in China.)That Sequoia Capital led Birds most recent round of funding helps on this front, given Sequoia Capital Chinas growing dominancein the country and the relationships that go with it.
Then again, Sequoia is also an investor in Uber, having acquired a stake in the company earlier this year.
And alliances are generally temperamental in this brave new world of transportation.
In just the latest unexpected twist, Limes newest round included not only Uber but also GV, the venture arm of Alphabet, which only recently resolved a lawsuit with Uber.Another wrinkle to consider is the exposure that Lime receives from Uber, which could prove double-edged, given the companys ups and downs.
Ubers new CEO, Dara Khosrowshahi, appears determined to steer the company to a smooth and decidedly undramatic public offering in another year or so.
But for a company of Ubers scale and scope, thats a challenge, to say the least.
(Its newest hire, Scott Schools a former top attorney at the United States Justice Department and now Ubers chief compliance officer will undoubtedly be tasked with minimizing the odds of things going astray.)Limes arrangement with Uber could potentially create other opportunities for Bird.
First, by agreeing to allow Uber to apply its branding to its scooters, Lime will be diluting its own brand.
Even if Uber never acquires the company, riders may well associate Lime with Uber and think, for better or worse, that its a subsidiary.Further, Uber does not appear to have made any promises to Lime in terms of how prominently its app is featured within its own mobile app, which already crams in quite a lot, from offering free ride coupons to featuring local offers to promoting its Uber Eats business.Consider that inJanuary 2017, Google added to both the Android and iOS versions of its Google Maps service the ability to book an Uber ride.
Uber might have thought that a coup, too, at the time.
But last summer, Google quietly removed the feature from its iOS app, and it removed the service from Android just last month.
If there wasnt much outrage over the decision, likely its because so few users of Google Maps noticed the feature in the first place.Limes arrangement could prove more advantageous than that.
Only time will tell.
But everything considered, whether or not Bird flies away with this competition will likely owe less to Limes new arrangement with Uber than with its own ability to execute.
That includes making its own mobile app the kind of go-to destination that Ubers has become.Certainly, thats what Birds flock would argue will happen.
Yesterday afternoon, Roelof Botha, a partner at Sequoia and a Bird board member, declined to discuss the Lime deal, instead emailing one short observation seemingly designed to say it all: Travis [VanderZanden] is far more customer obsessed than competitor obsessed.
That is a quality we look for in great founders.A Bird spokesperson offered an equally sanguine quote, saying thatBird is happy to see our friends in the ride-sharing industry coalesce on the pressing need to offer a sustainable and affordable alternative to car trips.