In search of profitability, Lime is laying off 14% of its employees and leaving 12 cities

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Lime wants to ensure his financial health. To do this, the start-up of electric scooters is laying off 14% of its employees (around 100 people) and is withdrawing from several cities, according to an article ofAxios published on January 9, 2020. In all, 12 cities are concerned: four in the United States (Atlanta, Phoenix, San Diego, San Antonio), seven in Latin America (Bogota, Buenos Aires, Montevideo, Lima, Puerto Vallarta, Rio com Janeiro and Sao Paulo) and one in Europe (Linz).

Lime would have lost more than $ 300 million (270 million euros) in 2019, according to The Information. But the San Francisco-based start-up isn't worried. "We really trust that in 2020 Lime will be the first mobility company of the future to be profitable", assured Joe Krauss, president of Lime. To achieve this, he intends to reduce the maintenance costs of his fleet of electric scooters and extend their life expectancy.

Work on the lifespan of equipment

In fact, in the United States, the use of shared scooters is far below the break-even point for operators. according to a McKinsey study, the breakeven point is 114 days of use at the rate of five trips per day. However, today, the lifespan of a shared scooter is 28 days. The firm uses public data from the city of Louisville, Kentucky to reach this conclusion. To deal with this problem, in 2019, Lime deployed the third generation of its product, a much more resistant model.

Lime is not the first player in micromobility to have to cut its workforce. In recent months, Skip, Scoot and Lyft have taken the same path. The reason is simple: with the multiplication of offers, the market is saturated and is not yet mature. To ensure their survival, start-ups will have no other choice than to settle certain fundamental problems such as the safety, regulatory aspect and the robustness of their products … which they have often relegated to the background.

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