- Uber Technologies is a decade into upending transportation models with its ride-sharing solutions operating in 67 countries, but has suffered the common difficulties stemming from this year’s global spread of the COVID-19 pandemic
- The company announced recently that it will transfer its electric bike and scooter division to Lime, a similar e-bike company in which Uber has held a minority interest
- The Lime transfer arrangement makes Uber the leading partner in a new $170 million financing drive by Lime, and opens the door to the possibility of Uber buying Lime in the near future at a specified price
- The agreement recognizes the growing importance of e-bikes to people affected by the pandemic and the resultant quarantine-like efforts to stop the virus’ spread through social distancing measures
Ride share pioneer Uber Technologies Inc. (NYSE: UBER) is among the multitude of transportation industry corporations battered by distancing protocols designed to arrest the spread of the highly infectious virus at the root of the current global pandemic. A recent financing announcement by the company shows Uber remains optimistic about the coming years, however, as it turns its attention to the rising popularity of electric bikes.
Uber is playing a leading role in an investment round for electric scooter and bike rental company Lime, merging the Uber electric bike and scooter division branded as Jump with Lime. Bain Capital Ventures, Alphabet and Alphabet’s venture capital arm GV are also involved in the financing round valued at $170 million, according to the May 7 announcement (http://ibn.fm/wzsos).
Talks surrounding the investment included the possibility of giving Uber the option to buy Lime between 2022 and 2024 at a specific price.
Even as the COVID-19 pandemic was beginning to make its presence knowns outside the borders of China, where it was first reported last winter, Fortune Business Insights analysts predicted the global electric bike market would reach revenues of $46 billion by the end of 2026, enjoying a CAGR of 24.5 percent during the interim (http://ibn.fm/32O5r).
The relentless, deadly advance of the novel coronavirus and scientific uncertainty over how to combat it beyond quarantine-type measures combined with sustained respiratory assistance for the ill has since brought sobering news to economies around the world. As the northern hemisphere ushers in warmer months, tourism and mass transportation industries including ride share solutions remain in decline because of the potential for virus transmission from one person to a vehicle surface or ambient environment, then to another person.
But electric bike sales have exploded amid the pandemic’s advance. E-bike companies are reporting record sales in the United States and Europe as people under lockdown orders look for ways to remain active and enjoy outdoor environments while keeping their distance from others (http://ibn.fm/lrUmq).
Uber, which has demonstrated its commitment to acting as a responsible citizen during the pandemic by providing free rides and food delivery to health care professionals and other workers on the front lines of the battle against the novel coronavirus (http://ibn.fm/R576X), has been led to lay off a significant portion of its workforce because of the pandemic and Lime has also seen a huge loss in its valuation.
Under the deal transferring Jump to Lime, Uber would feature Lime bikes and scooters more prominently in the Uber app to draw attention to the alternative means of transportation and take advantage of growing preference for e-bikes (http://ibn.fm/OViGZ).
“We are looking at many scenarios and at each and every cost, both variable and fixed, across the company,” Uber CEO Dara Khosrowshahi told employees in a memo at the beginning of the month. “We want to be smart, to move fast, to retain as many of our great people as we can, and treat everyone with dignity, support and respect.”
For more information, visit the company’s website at www.Uber.com
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