The electric scooter survived the pandemic and is stronger than ever. They went from being a fun novelty to a commuting necessity for some. Chances are you are an avid user. They are everywhere.
Today I wanted to dive into the business model. What justified the fast growth of these companies and how do they achieve success?
Where did it all start?
The year was 2017, the month September and the location Santa Monica. Enter Bird, the first electric scooter company to launch. In just one year, Bird announced it hit 10 million rides across over 100 cities and is currently valued upwards of $2 billion.
Lime, officially Neutron Holdings Inc., came up as the third entrant after Spin, which also got its beginnings as a bike-share company. In February 2018, Lime unveiled its take on electric scooters. Since then, Lime has spread both its bike and electric scooter business to over 100 cities in the U.S. and 40 international cities. That is an expansion to 20 countries outside the United States.
Lime has also partnered with Uber to offer Lime scooters within the Uber app.
Recently, Lime has been meeting with investors about a new round of funding that would value the company at 3.3billion$ as advanced by Bloomberg.
This is an astonishing valuation for a then 2 year old company, until you take a look at their business model.
The Business Model
As of today, the Californian company offers riders 4 options the lime-s, the lime-e, the limebike and the limepod. That is, respectively, an electric scooter, electric bikes and regular bikes and a car sharing platform, all in the same place.
Focusing on electric scooters, the following exercise will be a mix of Bird and Lime’s numbers as none of the brands disclose their entire business model.
For the most part you install an app, scan a QR code and start riding at 1$ + 15cents per min, then, you can leave it close to anywhere and move on with your life.
Lime does not disclose the cost of their scooters as they are proprietary and not built in America, as such, we will look at Bird’s models. They use a Xiaomi M365 Electric…