Lime is facing tough times due to Covid-19 pandemic
Due to the coronavirus crisis, the electric kick scooter rental company Lime has largely ceased operations, and sales have therefore shrunk sharply. According to a media report, this could even call the future of the company into question.
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Bloomberg reports that Lime could be bankrupt in twelve weeks. The agency specialising in financial news substantiates this assertion with figures: On 14 March, Lime had recorded 147,000 trips with its electric kick scooters worldwide, three days later the value had dropped to 52,000 trips due to restrictions on public life in many countries. In Paris alone, the largest single market at that time, the number of rides fell by 98 per cent in three days.
According to Lime’s internal documents, to which Bloomberg refers, daily turnover had thus also fallen from a good 600,000 to less than 200,000 dollars. Since the costs of operation exceed this $200,000, the money reserves (allegedly $50 million in January) are shrinking daily – and at the current rate would probably only suffice for the twelve weeks mentioned. Since 17 March, however, several US states, including the crucial markets of California and New York, have decided to impose further restrictions – which should make the situation at Lime even tenser.
Lime is, therefore, planning to cut 50 to 70 jobs at its headquarters in San Francisco. According to the Bloomberg source, this measure has not yet been decided. The electric kick scooter rental company had already thinned its offer in response to the coronavirus crisis, but the running costs are high. In Germany and other European countries and the UK, Lime has already discontinued operations – as well as in Israel, Canada and some US states.
In January it was already announced that Lime was withdrawing from twelve cities due to lack of profitability. In the USA these were Atlanta, Phoenix, San Diego and San Antonio, in Latin America Bogotá, Buenos Aires, Montevideo, Lima, Puerto Vallarta, Rio de Janeiro and São Paulo, and in Europe the Austrian city of Linz.
Update 01 April 2020: Bird’s business in Europe is also going on pause according to Handelsblatt. The company also made 30 per cent of its workforce redundant at short notice. According to information from Techcrunch, 406 of 1,387 employees had to leave – these are expected to be mainly from the operational area. “The unprecedented Covid 19 crisis has forced our management team and the board of directors to make many extremely difficult and painful decisions with regard to some colleagues,” revealed Techcrunch from a letter to all employees from Bird CEO Travis van Zanden. Unlike Lime, however, Bird’s capital is expected to last “well into 2021”, partly because of the redundancies.
After Voi closed down their service in Berlin, the Swedish company decided at the end of last week to extend this measure to the whole of Germany. On their website, Voi has published an update according to which operations have stopped in “most of our cities” but “with the exception of our Nordic capitals and Gothenburg”. According to the company, it still has “a solid financial base until 2021”, but will lay off some of its employees.
bloomberg.com, techcrunch.com (Bird), handelsblatt.com (Bird and Voi in German), voiscooters.com
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