It might be early, but the dockless scooter and bike industries are rocking! Urban centers are scurrying to understand how best to regulate these burgeoning businesses. Meanwhile, consumers are quickly learning how these short-trip ride-sharing options work to their advantage. Two bold scooter startups are taking the industry by storm and redefining the last mile of transportation. In just 14 months, Lime and Bird scooters have skyrocketed in value. Lime and Bird scooters and bikes combined are worth more than $10 Billion in valuations. The two scooter startups have provided more than 10 million rides each. Lime and Bird scooters are leaving the rest of the industry in its wake. But can they sustain this exponential growth and continue their top-notch position? That all depends.
Leaving Other Scooter Startups Behind
When the dockless scooter and bike industry began, the market looked to be much more competitive. Jump, which has since been acquired by Uber, had a respectable market share. Likewise, Motivate, acquired by Lyft, made a positive impression as well. But Lime and Bird scooters have outperformed all other scooter startups by tremendous margins.
In just over a year, both Lime and Bird scooters have increased their sales by nearly 100-fold. In fact, the sale of Lime and Bird scooters have doubled in the last six months alone. Motivate’s and Jump’s sales plateaued during this same timeframe, that’s why this is even more impressive.
The success of Lime and Bird scooters have not gone unnoticed. The two scooter startups have received more than $400 million in capital funding to date. Likewise, those backing Lime and Bird scooters represent a pretty strong list of who’s who in the venture capital arena. For Lime—Alphabet, Uber, and Andreessen Horowitz are noteworthy backers. For Bird—Sequoia and Accel are some of the high-power capital funding sources. This level of support strongly suggests Lime and Bird scooters are the real deal.
Bird and Lime Scooters —Advantages of Ridesharing Expertise
Why are Lime and Bird scooters blowing other scooter startups out of the water? Ridesharing expertise is a big reason. Both scooter startups are led by innovative entrepreneurs. For Lime, Toby Sun and Brad Bao are at the helm. For Bird, Travis VanderZanden runs and manages the firm. But both Lime and Bird scooters also have executive teams with extensive ride-sharing experience. And ride-sharing industry insights is likely a major reason for both Lime and Bird scooters’ incredible growth.
For Lime, David Richter is Chief Business Officer who was previously the head of business and corporate development for Uber. At Bird, Chief Operations Officer Stephen Schnell was previously in charge of North America operations for Uber. The fact these ride-sharing experts chose to join Lime and Bird scooters speaks volumes about their potential. It’s no wonder both Lime and Bird scooters valuations have grown more than five-fold over the last year.
Leveraging Success Against Threats—The Future for Lime and Bird Scooters
The incredible growth both Lime and Bird scooters are experiencing provides both advantages and challenges. As top dogs, the competition has targeted these scooter startups. Chinese bicycle sharing competitors like Ofo and Mobike pose potential threats as do other U.S. bike-share companies like SmartBike, Citi Bike, and Capital Bikeshare. Then there are the U.S. ridesharing companies like Uber and Lyft. However, Lime and Bird scooters have created barriers to competition through their rapid growth and success and focus on the last mile of transportation. Both scooter startups have complex networks for charging, repair and maintenance services. Likewise, both Lime and Bird scooters own proprietary hardware making it tough for the competition.
Lime and Bird scooters also enjoy expanding economies of scale from their tremendous growth. Opportunities for vertical integration of some services are now feasible, which could reduce dependency on suppliers even more.
Likewise, either of these scooter startups could start offering customer subscriptions for their dockless scooters and bikes. This would in essence “lock-in” consumers into using their short-trip ridesharing services. All of this shows the strength that Lime and Bird scooters now enjoy because of their early success and rapid growth.
And the Winner Is?
Without question, short-trip ride-sharing is booming, which highlights the need for these innovative urban technologies in transportation services. Lime and Bird scooters are clearly dominating the market with exponential growth without end in sight.
Current valuations of these two companies are indeed impressive. Lime is now valuated at $1.1 billion while Bird received a $2 billion valuation. But these estimates may well be conservative given the market potential.
Notably, the growth of both Lime and Bird scooters are on the same trajectory as Uber and Lyft during their startup phase. In fact, Bird was the fastest ever to unicorn status. But a major shake-up could happen any day. Uber has reportedly been negotiating multi-billion-dollar acquisitions with both Lime and Bird scooters and there is speculation that Bird turned them down because of the lower than desired offer price. There is also growing speculation that Bird and possibly Lime will be conducting another funding round for a much larger valuation. Should Uber decide to make the acquisition, it could catapult to the top of this market and leave other scooter startups struggling to keep up.
Can two rapidly growing businesses remain equally dominant among the scooter startups in the industry? Based on the experience with Uber and Lyft in car ride-sharing, the answer would appear to be “Yes!” However, all of this depends on how the market landscape of scooter startups and acquisitions shake out. For now, the future for Lime and Bird scooters looks incredibly bright.
